Previously, a work permit has always been a horror story for foreigners living in Mexico: you cannot work without a permit, and acquiring income without a permit can result in a fine or even deportation. Now these statements are more true for those who are staying in Mexico as travelers and working illegally. After residents of Mexico were required to register and receive an RFC tax number with the Tax Administration Service (SAT) from January 1, 2023, purchasing a work permit from the migration service in fact comes down to only a formal notification that you are already receiving income.
Not all residence permits in Mexico automatically include a work permit. Only those who have received temporary residence following an invitation to work (through a work visa), or permanent residents, have such permission immediately. Temporary residence permits obtained on other grounds (based on economic solvency, marriage and family ties, settlement program, etc.) are not covered by a work permit. That is, if you do not have a work permit, you do not have the right to work and earn income in Mexico. And in this regard, many residents believe that without a work permit they will not be hired and they are not able to earn income as self-employed. Completely false! More precisely, it’s the other way around: find an employer or register with SAT as self-employed, and immediately receive a work permit.
The migration service issues a work permit in two cases.
1. The Mexican employer provides you with a letter of invitation to hire you. For him to give you such an invitation, he does not need you to have a work permit. It is enough for him that you are a resident of Mexico and meet his standards for the vacancy. Of course, the employer himself is obliged to comply with certain standards, the main one of which — have the right to hire foreigners. Based on this invitation letter, the migration service will issue you a work permit, and at the same time approve the employer’s request to hire you. A work permit is issued until the end of the validity period of the current resident card.
2. You registered with the Tax Administration Service as self-employed and then requested a work permit from the Migration Service. Previously, you might have needed to convince the tax authorities that your business intentions were serious, for example by providing a business plan. Now everything is much simpler. The obligation for residents to register with the tax authorities was introduced at the beginning of 2022. At first, many SAT offices refused to register residents unless they had a work permit. However, the new edition of the tax code does not divide residents into those who have a work permit and those who do not have such a permit, obliging all residents to issue a tax number. Consequently, today SAT registers as taxpayers all residents who apply there. After which it is quite simple to change the tax regime to the one that suits you as a self-employed person. In many cases, you don't even need to get any SAT approval, just make the changes in your account on their website and then prepare a document called a «tax treatment confirmation» (Constancia de Situación Fiscal), take this document to the migration service, accompanied by a letter on your behalf (escrito para trabajar de manera independiente) describing your activities and indicating the address where you will carry them out, and you will immediately receive a work permit! Of course, it is advisable to declare that you will be doing business when you first visit SAT in order to obtain an RFC tax number. Then they will immediately scan your retina and give you electronic keys on a flash drive.
If you received an RFC on your first visit to SAT, but did not receive electronic keys, that is, on the SAT portal you are not able to independently change the tax regime from general to self-employed, then you indicated the wrong reason for visiting when receiving a sieve (registration for a visit) on the SAT website. You have the opportunity to re-register and go to SAT and explain that you need an electronic key. But you should actively influence the process, explaining to the SAT staff that you need not just RFCs, but electronic keys.
Now SAT, when applying for an RFC, automatically gives the tax regime Personas físicas sin obligaciones fiscales (without income) or Régimen de Sueldos y Salarios (Asalariado). The latter does not mean “employee” so much as the basic tax regime, in other words, on a scale from 1.92% to 35% depending on the amount of annual income. As long as there is no income, there is no tax base, there is no need to pay taxes and there is no need to submit reports either. Either you find an employer or start registering income and remain in the basic tax regime, or choose one of the tax regimes for the self-employed. By choosing one of the two options above (1 or 2), you are directed to the migration service to purchase a work permit.
Formally, you must first register with SAT as a self-employed person, then you have the right to start commercial activities, but at the same time you must acquire a work permit from the migration service before the end of the first reporting period in accordance with the selected reporting regime. If you have chosen the tax regime in SAT, but have not started receiving income, you do not have to request a work permit from the migration service. We know a lot of cases when this procedure was not followed: a work permit was requested much later than the first income was received, and the migration service did not apply any sanctions. We think that the migration service does not have access to SAT information or does not monitor the work activities of residents — this is probably not its function at all. Foreigners working illegally without the right to work are most often identified by chance through on-site migration checks, in particular in clubs, travel companies or service industry enterprises.
So, simply having a permit to work in Mexico does not give you any advantage over those residents who do not have such a permit. Once you have an offer from a Mexican employer or start a self-employed business, you have the prospect of obtaining a work permit. In fact, at the moment, a work permit looks like a formal response from the migration service to the fact that you have already begun to register income on Mexican territory. We believe that issuing a work permit in its current form — useless migration process. Those foreigners who want to legally acquire income in Mexico are already controlled by the Tax Administration Service and Mexican banks. And those who do not want to show their income do not need any work permit.
Please note: If you are a freelancer, do not earn income in Mexico, or do not deposit income earned abroad into Mexican banks, you do not need a permit to work in Mexico. Because you don't work in Mexico.