Mexico Does Not Restrict Capital Outflows
The first important point: Mexico has no exchange controls or capital outflow restrictions. Unlike some Latin American countries, foreigners can freely transfer their profits abroad through legal banking channels. The only condition is fulfilling Mexican tax obligations before or at the time of transfer.
Case 1: Repatriating Vacation Rental Income
For non-tax residents, rental income in Mexico is subject to income tax. The general rate is 25% on gross income or 35% on net income (income less permitted deductions). From a Mexican bank account, you can transfer abroad via SWIFT with no amount limit, provided the fund source is documented.
Case 2: Repatriating Property Sale Proceeds
When selling a Mexican property, the notary withholds income tax directly from the sale price. For non-residents: 25% of gross sale price withholding. For tax residents: notary calculates income tax on net gain with deductions. Once Mexican income tax is paid, the net proceeds are yours to freely transfer abroad.
The International Transfer Process
- Sale closes, notary withholds income tax
- Net funds arrive in your Mexican bank account
- Initiate SWIFT transfer to your foreign account
- Bank may request source documentation (deed, income tax payment certificate)
- Transfer processes in 1–3 business days
- Declare the gain in your country of tax residence (per that country's rules)
Implications in Your Home Country
The U.S.-Mexico tax treaty prevents double taxation: income tax paid in Mexico is credited against U.S. tax owed. Canada has a similar treaty. Always consult an international tax advisor to optimize your specific situation.
At L'Agence MX we can connect you with international tax advisors specialized in foreign investors in Mexico. Email bonjour@lagencemx.com or WhatsApp +52 56 3370 9470.