BajaNomad - Business in baja

Business in baja

Paladin - 7-29-2006 at 05:19 PM

I've been thinking (dangerous) about opening a business in Baja Sur...

Id appreciate any thoughts the experts have out there

My intial thoughts are that..............................

#1 Form a Mexican Corp

#2 partner up with a Mexican citizen

#3 The business would involve a number of vehicles, probably pick ups

#4 Is there any particular problem in bring in a lot of autos???

#5 Would it be better to have a local car dealer bring them in and then sell to my business?

#6 Is there an age limit on how old the vehicles can be??

Thanks

Bruce R Leech - 7-29-2006 at 05:45 PM

#1 is not necessary until you are making over 2,000,000.00 pesos a year.

#2 forget it

#3 for your business they should be Mexican plated cars.

#4 no but you should import them for use in your business.

#5 yes or just buy them in T.J.

#6 yes they cant be to new or to old.

this is my opinion only

comitan - 7-29-2006 at 06:35 PM

Good opinion Bruce

The vehicles would have to be more than 5yrs old to import. If you wanted to buy newer you could always buy them from a Mexican dealer.

comitan - 7-29-2006 at 06:55 PM

102

Bruce has 1 or more businesses in Mexico I think he is qualified to give an opinion, and I have imported 3 vehicles into Mexico and know something of the importation rules.

Al G - 7-29-2006 at 06:57 PM

Quote:

Originally posted by freaking102
This message board is 99% gringos. Suggest you look for advice from Mexicans.

I think your are way wrong, not to mention mexicans (non official) will not know anyway. They do not deal with this issue.

Bruce R Leech - 7-29-2006 at 07:03 PM

it is so deferent for a foreigner to start a business here in Mexico that I doubt that they can give you much advice on the subjects you listed that would do you much good. but I always listen to all advice you learn something from everyone you meet if you are a good listener and ask a few questions.

Dave - 7-29-2006 at 08:54 PM

Quote:

Originally posted by Paladin
I've been thinking (dangerous) about opening a business in Baja Sur...

The fact that you would consider it dangerous tells me that you wouldn't feel comfortable in losing your investment. Is this something you need to do? If so, Mexico ain't the place.

My advice would be to find a mentor, preferably someone near you, pick his/her brain, study every angle leaving no stone unturned and then, after careful deliberation, if you still decide to proceed...DON'T.

Mexico does not offer foreigners a level playing field.

Bruce R Leech - 7-29-2006 at 09:01 PM

very good advice Dave I agree 100 %. if you are thinking about having a business here because you think it will be easier or less problems than the Us or Canada then you better do a whole lot more checking. Dave has a very good Business and I know it wasn't easy for him.

???????

fdt - 7-29-2006 at 09:30 PM

Quote:

Originally posted by Al G
[I think your are way wrong, not to mention mexicans (non official) will not know anyway. They do not deal with this issue.

So mexicans know nothing about business? :lol:

I sure hope paladin does'nt listen to your advise. You mi amigo, IMHMO, are of very low intelect!

fdt - 7-29-2006 at 09:32 PM

Quote:

Originally posted by Dave

Quote:

Originally posted by Paladin
I've been thinking (dangerous) about opening a business in Baja Sur...

I think he was joking about the thinking part only.

Debra - 7-29-2006 at 09:35 PM

Dave, I think he what he meant by "dangerous" was him "thinking" I could be wrong, but, sounds like something I would say. Just the way he put it, I took it that way. :lol:

I think he was making a joke.

fdt - 7-29-2006 at 09:37 PM

Quote:

Originally posted by Paladin
I've been thinking (dangerous) about opening a business in Baja Sur...

Id appreciate any thoughts the experts have out there

My intial thoughts are that..............................

#1 Form a Mexican Corp

#2 partner up with a Mexican citizen

#3 The business would involve a number of vehicles, probably pick ups

#4 Is there any particular problem in bring in a lot of autos???

#5 Would it be better to have a local car dealer bring them in and then sell to my business?

#6 Is there an age limit on how old the vehicles can be??

Thanks

You can u2u me or email fernadetijuana@hotmail.com , with a few more details I could probably help you or be able to guide you.

Bruce R Leech - 7-29-2006 at 09:39 PM

Quote:

Originally posted by Debra
Dave, I think he what he meant by "dangerous" was him "thinking" I could be wrong, but, sounds like something I would say. Just the way he put it, I took it that way. :lol:

I think he was making a joke.

maybe he was joking but he is on the right track anyway it is very touchy but doable.

David K - 7-29-2006 at 09:43 PM

Ferna, I think he meant that an average Mexican would not know how to instruct a gringo on starting a business in Mexico because the rules for foreignors are not the same as for Mexican nationals...

Getting input from foreignors like Dave and Bruce will provide more information because they have 'been there'.

Ferna, you are an excellent source for help because you are a bi-lingual Mexican and have run businesses in Baja and understand Americans, having one for a wife! You very well may know what an American needs to do, but I would bet that you are unique among fellow Mexican business owners!

By the way, how is your weekend schedule looking? A Baja mountain trip is being planned... :light:

fdt - 7-29-2006 at 09:46 PM

I can schedule it if we have enough advance

Oh...Well then THAT'S different!

Dave - 7-29-2006 at 09:55 PM

Quote:

Originally posted by fdt
I think he was joking about the thinking part only.

Not thinking and having a sense of humor about it. In Mexico, the gringo's key to success. Paladin, disregard what I said before. You'll do well.

Paladin - 7-30-2006 at 09:24 AM

First all I'm shocked with all the replys...thanks a million. I knew Bruce would reply which i appreciate. Yes I have a wierd sense of humor and it doesnt always come accross well in writing. I like to make fun of myself...that was the crack about me thinking.

I also think that when someone tells me it's tough for an American to do business in Mexico, he is telling me the truth but it also means more opportunity for someone willing to do it the right way. I look at objections as opportunities. Yes I'm in sales.

As far as having a Mexican corp, I really like that idea especially since I am in the risk management business and recommend to all my clients, large and small, do not do business as an individual.

I dont necessarily understand the recommendation against teaming up with a Mexican national. I have found Mexicans to be as honorable as Americans if not more so than some "groups" of Americans. Heck, I'm married to one.

If I understood some of the comments it looks like if I wanted to bring in 20 pickups I could but I read somewhere and Bruce aluded to it, that they would have to be 10 years and not older than 15 years old.

This is an important question affecting my plan.

Lastly for now I would have no problem hiring good professionals in La Paz, attorny etc. I do not want any surprises or problems.

Again, thanks for all the comments, you guys are even better than I thought.

I'm not worried about losing my investment, I like taking risks. The investment would be max of $75,000 before I find out if I was stupid and had to bail out.

There seems to be a lot of Americans on this board that are successful business people in Baja..I think Baja will have a run of opportunities for years to come because of the Baby Boomers like me (DOB 1947) Yes Bruce Im 2 years older than you.

bajajudy - 7-30-2006 at 09:30 AM

My only advise would be to be absolutely sure about your accountant. To me, they are the most important part of doing business here. I have tried and failed miserably to understand the taxes here. I have figured out that if you are successful they sure take a large junk of it.
Suerte!

Bruce R Leech - 7-30-2006 at 09:47 AM

Quote:

Originally posted by Paladin
First all I'm shocked with all the replys...thanks a million. I knew Bruce would reply which i appreciate. Yes I have a wierd sense of humor and it doesnt always come accross well in writing. I like to make fun of myself...that was the crack about me thinking.

I also think that when someone tells me it's tough for an American to do business in Mexico, he is telling me the truth but it also means more opportunity for someone willing to do it the right way. I look at objections as opportunities. Yes I'm in sales.

As far as having a Mexican corp, I really like that idea especially since I am in the risk management business and recommend to all my clients, large and small, do not do business as an individual.

I dont necessarily understand the recommendation against teaming up with a Mexican national. I have found Mexicans to be as honorable as Americans if not more so than some "groups" of Americans. Heck, I'm married to one.

If I understood some of the comments it looks like if I wanted to bring in 20 pickups I could but I read somewhere and Bruce aluded to it, that they would have to be 10 years and not older than 15 years old.

This is an important question affecting my plan.

Lastly for now I would have no problem hiring good professionals in La Paz, attorny etc. I do not want any surprises or problems.

Again, thanks for all the comments, you guys are even better than I thought.

I'm not worried about losing my investment, I like taking risks. The investment would be max of $75,000 before I find out if I was stupid and had to bail out.

There seems to be a lot of Americans on this board that are successful business people in Baja..I think Baja will have a run of opportunities for years to come because of the Baby Boomers like me (DOB 1947) Yes Bruce Im 2 years older than you.

it sounds like you are on the right track. just do your home work and you will do ok.

Baja Judy

Baja Bernie - 7-30-2006 at 10:52 AM

Your comments on accountants is spot on....Everytime I have seen an Gringo business person in trouble here it is because of his/her accountant.

I even have a short story on the problems with accountants in my new book. Chapter is titled "Doin' Business"--Book Title--THINK you know BAJA

Paladin - 7-30-2006 at 11:08 AM

Thanks again...I'll take the recommendation about the accountant to heart.

I'm already in trouble with the IRS so I'll be extra careful in Mexico.

Bruce R Leech - 7-30-2006 at 11:29 AM

just ask lots of questions and listen close to the answers. you can ask me anything and I will give it my best go. the rules always are changing here in Mexico.

vandenberg - 7-30-2006 at 01:19 PM

My wife does ceramics and has her product in several shops in town and the Inn at Loreto Bay. Small operation and ,according to the bookkeeper, Pays 2% of her gross sales to Hacienda. Too small to give facturas and collect the 10% IVA for them.

bajajudy - 7-30-2006 at 01:31 PM

Larry
That is another reason you need a good accountant. They know the rules so you can wind up making a little money.
And the rules have gotten stricter since we started our business. Por ejemplo: Now if we write a check for more than 2000 pesos, we have a carbon receipt that must be signed as acceptance of the check. We have to stamp these checks with "for deposit only" (that is in Spanish but I cant remember the exact words).
All of our bills must have our RFC number on them(phone, elect etc)
Lotsa rules, all in Spanish....tough to abide by something that you dont even understand
Hacienda has a worse rep than the IRS with the Mexican public. And you do not want to have to answer any questions from them. So we play by the rules. If I were a Mexican citizen, I might get a little sloppy with them but I am not and I do not want to HAVE to leave.
If your accountant is a good one, he keeps you up to date on all of these rules changes so your deductions are allowed.

bajajudy - 7-30-2006 at 01:34 PM

Larry I was typing when you were asking:

I have never heard of this 2% rule but I cannot imagine Hacienda not collecting their 10% IVA on items sold. If you charge IVA, you damned well better give it to Hacienda or they will come looking for it.

Bruce R Leech - 7-30-2006 at 03:55 PM

Quote:

Originally posted by bajajudy
Larry
That is another reason you need a good accountant. They know the rules so you can wind up making a little money.
And the rules have gotten stricter since we started our business. Por ejemplo: Now if we write a check for more than 2000 pesos, we have a carbon receipt that must be signed as acceptance of the check. We have to stamp these checks with "for deposit only" (that is in Spanish but I cant remember the exact words).
All of our bills must have our RFC number on them(phone, elect etc)
Lotsa rules, all in Spanish....tough to abide by something that you dont even understand
Hacienda has a worse rep than the IRS with the Mexican public. And you do not want to have to answer any questions from them. So we play by the rules. If I were a Mexican citizen, I might get a little sloppy with them but I am not and I do not want to HAVE to leave.
If your accountant is a good one, he keeps you up to date on all of these rules changes so your deductions are allowed.

this is why I was saying that if your earnings are less than 2,000,000.oo pesos and that is a lot of money, it is better if you don't have a Mexican Corp. if you have your accountant register your business with the Hacienda as pecineuo you will pay less than 2% this is a relatively new thing that they came up with a while back to try to get some of the small business to start paying taxes.

If your accountant has not told you about this get a new accountant. :bounce:

bajajudy - 7-30-2006 at 04:02 PM

We dont qualify for that program, Bruce

I didnt know the exact figures(ie 2%) but we did discuss it with our accountant.

[Edited on 7-30-2006 by bajajudy]

Bruce R Leech - 7-30-2006 at 04:10 PM

can anyone corect my spelling of pecineuo?

comitan - 7-30-2006 at 05:41 PM

Pequeno?

My BEST advice

Dave - 7-30-2006 at 05:46 PM

Quote:

Originally posted by Paladin
I'm not worried about losing my investment, I like taking risks. The investment would be max of $75,000 before I find out if I was stupid and had to bail out.

Take your 75k and invest in Baja dirt.

Bruce R Leech - 7-30-2006 at 07:49 PM

Quote:

Originally posted by lencho

Quote:

Originally posted by comitan
Pequeno?

Too obvious to be that far misspelled, didn't even consider it. Bet you're right. :biggrin:

--Larry

I think comitan is right as usual :lol:

JZ - 7-30-2006 at 08:32 PM

Quote:

Originally posted by Dave

Quote:

Originally posted by Paladin
I'm not worried about losing my investment, I like taking risks. The investment would be max of $75,000 before I find out if I was stupid and had to bail out.

Take your 75k and invest in Baja dirt.

Donde.

Al G - 7-30-2006 at 09:38 PM

Quote:

Originally posted by fdt

Quote:

Originally posted by Al G
[I think your are way wrong, not to mention mexicans (non official) will not know anyway. They do not deal with this issue.

So mexicans know nothing about business? :lol:

I sure hope paladin does'nt listen to your advise. You mi amigo, IMHMO, are of very low intelect!

I will not make as nasty of a comment, I will not judge your intelligence. It seems most people on here understood what I said. I said nothing disrespectful.

Bruce R Leech - 7-31-2006 at 08:14 AM

Quote:

Originally posted by Al G

Quote:

Originally posted by fdt

Quote:

Originally posted by Al G
[I think your are way wrong, not to mention mexicans (non official) will not know anyway. They do not deal with this issue.

So mexicans know nothing about business? :lol:

I sure hope paladin does'nt listen to your advise. You mi amigo, IMHMO, are of very low intelect!

I will not make as nasty of a comment, I will not judge your intelligence. It seems most people on here understood what I said. I said nothing disrespectful.

Al I think he just needs to go back and read your post again , he obviously did not understand what you were saying. you wrote it well even I understood. :lol:

Al G - 7-31-2006 at 09:29 AM

I too, on first reads do not understand and if it provokes strong emotion, I try always to reread. This form of communication is difficult at best.
I will try to be more complete, but I try hard now. :biggrin:

Invest in dirt where?

DanO - 7-31-2006 at 10:24 AM

Colonet!

Sorry, I couldn't resist.

:smug:

JZ - 7-31-2006 at 10:26 AM

Yeah, where is that crazy woman??

villadelfin - 7-31-2006 at 02:57 PM

pecunia means cash. Pecunario is "financial" Isn't there some kind of small business you can set up that's rather informal? Is that what vandenberg's wife has going?
[Edited on 7-31-2006 by villadelfin]

[Edited on 7-31-2006 by villadelfin]

Bruce R Leech - 7-31-2006 at 03:25 PM

Quote:

Originally posted by villadelfin
pecunia means cash. Pecunario is "financial" Isn't there some kind of small business you can set up that's rather informal? Is that what vandenberg's wife has going?
[Edited on 7-31-2006 by villadelfin]

[Edited on 7-31-2006 by villadelfin]

yes and it is Pequeno we just got notice last week that all the rules have changed effective 1st of August. so every one check with there accountant. the changes are much better for us we wont need an accountant any longer.

[Edited on 8-3-2006 by Bruce R Leech]

I know where

Dave - 7-31-2006 at 06:09 PM

Quote:

Originally posted by DanO
Invest in dirt where?

When I'm ready to sell, you'll be the first to know.

Baja Bernie - 7-31-2006 at 08:13 PM

And for a price he will t ell you where.

Dave,
Hope to see you this Thursday for a while.

Paladin - 8-2-2006 at 07:31 PM

Thanks again for all the info...I did e-mail fernando in TJ and he did reply with good info...I haven't e-mailes him back because my e-mail is broke for some reason. I hope he sees this..Thanks Fernando, I'll be in touch.

Based on what I've heard so far it seems I should do lots of homework..I'd like to know more details from the two Daves who both seemed to think buying dirt was a better idea..its always good to know both sides and not just look for someone to agree with me.

I've changed my mind a little about how I "think" I'd like to get into business in Baja Sur...I was thinking about me starting up a business....it seems I should think about buying an existing business so I don't have to go through as much BS. I can't imagine any more hassel in doing business in california.

Anyway do you folks see a little advantage in just buying an existing busiess????

Thanks

Bruce R Leech - 8-2-2006 at 07:37 PM

Quote:

Originally posted by Paladin
I can't imagine any more hassel in doing business in california.

Anyway do you folks see a little advantage in just buying an existing busiess????

Thanks

It probably isn't more hassle it is just deferent

flyfishinPam - 8-3-2006 at 06:42 PM

Vanderbergs wife is immigrado. Only immigrado or a Mex national can register like a pequeno contribuyente (small tax contributor). If you ever plan to transfer the business (sell it off) you shuld consider incorporating. Our tax rate for our S.A. de C.V. os 30% on the profits. If i could have set up my SA de CV without a Mex partner I would have but since I operate in federal waters I needed a 51% Mex ownership. For any new business that can be foreign owned my advice would be to set up an S de RL de CV (foreign owned corporation) kind of like the equavalent of an LLC.

[Edited on 8-4-2006 by flyfishinPam]

Paladin - 8-3-2006 at 06:57 PM

Thanks for info Pam..I was hoping you would add something...I see lots of growth in Baja and I also see a bunch of Americans involved in the growth....the hassels must be manageable.

flyfishinPam - 8-3-2006 at 07:00 PM

Its growing so fast here you can see it and feel it. I've been busy in the middle of my high season. We've seen lots of growth over the past two years and its happening faster and faster now, trying to keep up. Good luck.