Welcome to the Second Quarter, 2016 Newsletter. In this edition we look at Mexico’s economic relationship with the U.S.A. and we check out Canada’s new immigration law. In addition to the VISA regulation, covered in the article below, Canada is seeking an increase of Mexican students for scholarships and an increase in temporary agricultural workers. We also describe The Settlement Company®’s rental property tax program and the obligation of paying taxes on rental property in Mexico.
Mexico –U.S.A. Balance of Trade
| Source: Forbes Magazine | ||||||||
Mexico Trade Gap Narrows in May
Mexico trade deficit narrowed by 52.6 percent year-on-year to USD 527 million in May of 2016 from a USD 1113.3 million gap a year earlier as exports rose, while imports fell. Considering the first five months of the year, exports decreased by 5 percent while imports dropped 2.9 percent.
Year-on-year, exports increased 0.3 percent to USD 31.3 billion as non-oil shipments rose 2.6 percent mainly due to manufacturing (+2.4 percent) and agricultural goods (+8.5 percent) while mining goods fell (-10 percent). Imports went down by 1.6 percent to USD 31.9 billion due to lower purchases of intermediate goods (-0.8 percent), consumer goods (-4 percent) and capital goods (-4 percent).
On a monthly basis trade gap narrowed from a USD 2080 million deficit in April.
Mexico’s main exports are manufactured products (83 percent of total shipments) and oil and oil products (13 percent). Main imports are: metallic products, machinery and equipment (50 percent of total imports), mining products (13 percent) and chemical products (6.3 percent). Mexico´s main trading partner is the United States (80 percent of total exports and 51 percent of imports). Others include: Canada, China and Japan.
Canada to lift Mexican visa requirements
From the Office of Prime Minister Justin Trudeau
Ottawa, Ontario
28 June 2016
The Government of Canada has made it a top priority to re-establish and strengthen our relationship with one of our most important partners, Mexico.
Today, the Prime Minister, Justin Trudeau, announced Canada’s intention to lift the visa requirement for Mexican visitors beginning December 1, 2016. The announcement came during a productive two-day State visit to Canada by Mexican President Enrique Peña Nieto.
Lifting the visa requirement will deepen the ties between Canada and Mexico and will increase the flow of travelers, ideas, and business between both countries.
Canada and Mexico both understand the importance of having a productive and respective relationship – one that allows for greater trade, stronger growth, and more clean job creation.
Quote
“Canada is pleased to deliver on the government’s commitment to lift the visa requirement for Mexican nationals. We look forward to the social and economic benefits that lifting the visa requirement will bring to both countries, especially to the middle class here in Canada.”
—The Rt. Hon. Justin Trudeau, Prime Minister of Canada
Quick Facts
- Canadian officials are currently working with their Mexican counterparts on final details to ensure a successful visa lift. This includes expanding existing collaboration and cooperation on migration issues––with the goal of ensuring that the benefits of the visa lift are fully maximized by both countries.
- Until November 30, 2016, the visa requirement is still in place for Mexico. Additional information will be provided to Mexican citizens in advance of the visa lift, so that they can experience a seamless transition to visa-free travel.
Embassy predicts flood of tourists
Mexican visitor numbers to Canada expected to increase by 25,000
Mexico News Daily | Saturday, July 2, 2016
Some Canadian immigration officials have warned that removing the requirement for Mexicans to obtain a visa before visiting Canada could trigger a flood of refugee applications.
The Canadian embassy in Mexico is also predicting a flood of Mexicans heading north, but as tourists rather than refugees.
Ambassador Pierre Alarie says preliminary estimates suggest that an additional 25,000 Mexican citizens will visit Canada next year once the visa is fully eliminated December 1.
Those travelers will still need documentation, however, in the form of an electronic travel authorization, or eTA.
The number of Mexicans heading north as tourists is expected to continue growing: in three years’ time the increase is expected to total 50,000.
About 200,000 Mexicans visited Canada last year.
The visa was a thorn in Mexico-Canada relations since it was implemented in 2009 in the face of large numbers of refugee claims. While its elimination had been announced earlier by the Canadian government it wasn’t until earlier this week, during a visit by Mexico President Enrique Peña Nieto, that Canada announced the date for its elimination.
Source: Reforma (sp)
THE SETTLEMENT COMPANY® RENTAL TAX PAYMENT SERVICE
Under Mexican law, any income generated from properties located within Mexican territory are subject to taxation, even if the owners are foreigners and even if all funds are collected in accounts located outside Mexico. For many years it has been a major issue for both Mexican tax authorities and individuals attempting to comply. For years a Federal Taxpayer ID was required to file and pay the tax. In order to obtain this tax ID one needed to be a resident of Mexico. This was lose-lose for both the authorities and the foreigners who were willing to pay but baffled by the issues involved to “get legitimate”.
After more than five years of Settlement Company® dialogue with Mexican tax officials, a resolution was made in which the foreign property owner could appoint a Mexican company to pay his or her taxes and dispense with all other formalities. This has become reality! Mexican authorities are now looking seriously to collect this long-neglected source of tax revenue and foreigners not only are lining up to pay but also to receive the receipts for payment of the taxes which can then be credited against taxes paid in their native country under the terms of the NAFTA treaty. Remember, no double taxation is permitted under the terms of the treaty!
If you have a rental property in Mexico, contact us for details. info@settlement-co.com
News from AREA
Associated Realty of the Americas (AREA) is a small group of prominent and successful real estate practitioners. They are spread across North America.
The group was initially formed to carry out networking. Since its inception two other activities have become important. These are conviviality (Cocktail receptions are hosted at the National Association of Realtors® mid-year meeting and at the annual Conference and Expo) and educational sessions are held at the annual two day Conference. Membership in AREA is by invitation only.
There are two representatives of Mexico in AREA. They are Linda Neil (La Paz) and Jay West (Los Cabos.) Linda has been appointed to the 2016 Advisory Board. Others on the Board include; Jo Kenney (Atlanta) Past President of The Women’s Council of Realtors, Ron Phipps (Greenwich, R.I.) Past President of the National Association of Realtors® and Leslie Rouda Smith (Dallas) President of the Texas Association of Realtors. She has been elected Vice Chair and will be the Chair for 2017-2018. Leslie and her daughter Kristin participated on a panel at the Annual Conference in May. The theme was Generational Marketing and Selling. (With emphasis on the Millennium generation.) Kristin is a rising real estate star in Dallas.
The AREA Board recently made two important decisions. First it has been decided to “cap” membership at 140. (It is currently at 120) Second is to hold the Annual Conference in Santa Barbara, CA. in June of 2017.
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