Mexico RESICO: Low-Tax Regime for Residents

RESICO (Régimen Simplificado de Confianza) is Mexico’s simplified tax regime offering some of the lowest income tax rates in the country — as low as 1% on annual income. If you have Mexico residency and earn income, understanding RESICO could dramatically reduce your tax bill.

This guide covers everything you need to know: who qualifies, how RESICO compares to the general tax regime, what your monthly obligations look like, how foreign income is treated, and when RESICO may not be the right fit.

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Tax Rates Under RESICO

• Up to $300,000 MXN/year: 1%
• Up to $600,000 MXN/year: 1.1%
• Up to $1,000,000 MXN/year: 1.5%
• Up to $2,500,000 MXN/year: 2%
• Up to $3,500,000 MXN/year: 2.5%

Compared to Mexico’s standard general regime where rates reach 35%, RESICO is significantly advantageous for qualifying individuals.

Who RESICO Is For

RESICO was designed for independent earners — and it maps almost perfectly onto the profile of most expats and digital nomads who choose to base themselves in Mexico.

RESICO is the right regime if you are:

• A digital nomad with foreign-source income — you work for clients or companies outside Mexico, receive payment via Stripe, PayPal, wire transfer, or similar, and live in Mexico on a temporary or permanent residency card.
• A freelancer or independent contractor — you sell services (consulting, design, writing, development, coaching, legal, marketing) on a self-employed basis.
• An online business owner — you run an e-commerce store, SaaS product, agency, or content business, and your annual revenue stays under 3.5 million MXN (approximately $205,000 USD at current exchange rates).
• A remote worker paid by a foreign employer — you receive a salary or contractor payment from a company registered outside Mexico.
• A retiree or investor with passive income — provided the income type qualifies under RESICO (rental income from Mexican property, professional services fees).

RESICO is not the right regime if you are:

• An employee of a Mexican-registered company (you would be under the employment regime, with your employer handling withholding).
• Earning more than 3.5 million MXN per year from professional or business activities.
• Running a business with significant payroll — RESICO does not allow you to deduct wages paid to employees.
• In a profession excluded by SAT regulation (certain financial activities, for example).
• A Mexican citizen who already has an established business under the general regime and needs full deductibility of costs.

RESICO vs. General Tax Regime — The Numbers

The difference between RESICO and Mexico’s general income tax (ISR) regime is not marginal — it is transformative. Here is a direct comparison for a self-employed individual earning $5,000 USD per month (~85,000 MXN at 17 MXN/USD):

The math is stark: at $5,000 USD/month in revenue, RESICO means roughly $125/month in income tax. The general regime at the same income level — assuming 30% deductible expenses and applying progressive ISR rates — results in $700–$900/month in tax. RESICO saves most qualifying expats 80–90% on their Mexican income tax bill.

The trade-off is that RESICO does not allow you to deduct business expenses. If you have very high costs (renting an office, purchasing equipment, paying subcontractors), and those deductions would push your taxable profit low enough to offset the rate difference, the general regime might produce a lower tax bill. Run the numbers with an accountant before assuming RESICO is always better.

The RFC Requirement

You cannot register for RESICO without first having an RFC (Registro Federal de Contribuyentes) — Mexico’s federal tax identification number. The RFC is the foundation of the entire Mexican tax system. Every invoice you issue, every tax return you file, and every SAT interaction requires it.

For foreigners, obtaining an RFC requires:

• A valid Mexico residency card (temporary or permanent)
• A CURP number (Clave Única de Registro de Población) — issued automatically with your residency
• Proof of address in Mexico
• Passport
• An in-person appointment at a SAT office

The path is: Mexico residency → CURP → RFC → RESICO registration. Each step depends on the one before it. This is why we work with clients on RFC registration as a standalone service — it is the gateway to everything else on the Mexican tax side.

If you do not yet have your RFC, see our dedicated guide: Mexico RFC Tax ID: Registration & Requirements. We handle the full RFC process, including the SAT appointment logistics.

How to Register for RESICO

Once you have your RFC, registering for RESICO is done through SAT — either online via the SAT portal (sat.gob.mx) or in person at a SAT office. Here is what the process looks like:

What You Need

• RFC (already registered with SAT)
• e.firma (also called FIEL) — your digital signature certificate. This is different from your RFC; it is a USB token or software certificate used to sign documents and access SAT systems. Getting your e.firma also requires a SAT appointment.
• Proof of address in Mexico (utility bill, bank statement, rental contract — no older than 3 months)
• Mexican residency card (temporary or permanent)
• Passport

The Process

1. Log in to the SAT portal using your RFC and e.firma (or Contraseña/CIEC password).
2. Navigate to “Cambio de Régimen” (Change of Regime) under the “Servicios” section.
3. Select RESICO (Régimen Simplificado de Confianza).
4. Confirm your economic activities match qualifying RESICO activities.
5. Submit. SAT will update your tax profile, typically within 24–48 hours.

If you are registering as a taxpayer for the first time (no prior regime), you will select RESICO at the time of your initial RFC registration appointment.

In-person at a SAT office, the process is largely the same — a SAT agent walks you through the system and confirms your regime selection. In-person is often preferable for first-time registrants who have not yet set up their e.firma, since both can be handled in the same appointment.

Our team handles the SAT coordination, document preparation, and process navigation as part of our Mexico tax services. If you want us to manage this end-to-end, use the link below.

Monthly Tax Obligations Under RESICO

RESICO is simpler than the general regime, but it still requires ongoing compliance. Missing filings results in penalties and interest charges from SAT — and in some cases, forced removal from the regime.

Monthly Requirements

• Monthly provisional ISR payment: You calculate and pay your estimated income tax each month via the SAT portal. The calculation is straightforward — apply the RESICO rate to your gross revenue for the month.
• DIOT (Declaración Informativa de Operaciones con Terceros): Monthly report of your VAT-related transactions. If you issue CFDI invoices (Mexican tax invoices), you report the corresponding IVA figures.
• IVA payment: If your services are subject to 16% IVA, you collect it from clients, report it monthly, and remit it to SAT after offsetting any creditable IVA you paid to suppliers.

Annual Requirement

• Annual income tax declaration: Filed in April of the following year via the SAT portal. Your annual tax is calculated, monthly prepayments are credited, and any balance due (or refund) is settled.

CFDI Invoicing

Every time you receive payment for a professional service in Mexico, you are required to issue a CFDI (Comprobante Fiscal Digital por Internet) — Mexico’s electronic invoice. CFDIs are generated through SAT-authorized billing software (timbrado). Popular options include Factur.com, SAT’s free Factura Electrónica portal, and various accounting platforms.

Penalties for Non-Filing

Failure to file monthly payments triggers automatic SAT penalties. Accumulated non-filings can result in SAT reclassifying you out of RESICO into the general regime or the repeaters’ list (lista negra) — both of which create significant complications. If you fall behind, the correction process requires filing back-declarations with surcharges and inflation adjustments.

Working with a Mexican contador (accountant) who specializes in expat taxation is strongly recommended. Monthly compliance costs range from $50–$150 USD depending on transaction volume.

Foreign Income Under RESICO

This is the question we hear most from digital nomads and remote workers: How does Mexico treat income earned from clients or employers outside Mexico?

The answer requires understanding two distinctions: (1) source of income vs. tax residency, and (2) whether you are a Mexican tax resident.

Mexican Tax Residency

Once you spend 183 days or more in Mexico in a calendar year, or once Mexico becomes your primary center of economic interest, you are considered a Mexican tax resident. As a Mexican tax resident, you are taxable in Mexico on your worldwide income — whether it originates from a U.S. client, a European employer, or a Stripe account.

RESICO does not exclude foreign-source income. If you are a Mexican tax resident registered under RESICO, that Stripe payment from your U.S. client counts toward your RESICO revenue and is subject to the applicable RESICO rate.

Invoicing for Foreign Clients

In practice, most digital nomads do not issue Mexican CFDI invoices to their foreign clients — and SAT’s guidance on this has evolved. For foreign-client payments:

• You are not required to issue a Mexican CFDI to a client outside Mexico, but you are required to declare the income in your RESICO returns.
• Payments received via PayPal, Stripe, Wise, or wire transfer are still income — SAT has increasingly sophisticated tools for tracking cross-border flows.
• Consult with a Mexican tax accountant about whether to issue CFDIs to your foreign clients in the “general public” (público en general) format for compliance purposes.

Tax Treaties

Mexico has tax treaties with many countries (including the U.S., Canada, and much of Europe) designed to prevent double taxation. If you were paying income tax in your home country on the same income, you may be able to claim a foreign tax credit in Mexico or invoke treaty provisions. This is highly situation-specific — get advice from someone familiar with both jurisdictions.

When RESICO Does Not Make Sense

RESICO is a powerful tool for the right profile, but it is not the right choice for everyone. Here are the situations where we advise clients to consider the general regime instead:

• Income over 3.5 million MXN/year (~$205,000 USD): You are legally required to exit RESICO and move to the general regime once you breach this threshold. SAT will reclassify you automatically if you exceed it.
• High deductible expenses: RESICO taxes gross revenue. If you have substantial, documented business expenses — office rent, equipment, software subscriptions, professional fees, subcontractors — the general regime may produce a lower net tax burden because you can deduct those costs before applying the progressive rate.
• Employees on payroll: If you hire employees in Mexico, RESICO becomes more complex and in some configurations is not allowed. The general regime is often more appropriate for businesses with payroll obligations.
• Significant investment income: Dividends, capital gains from property sales, and certain passive income types may be taxed differently and may not qualify cleanly for RESICO treatment.
• You need a deductible invoice from a vendor: Under RESICO, your ability to credit supplier invoices against your tax liability is limited compared to the general regime.

The right regime depends on your income level, expense structure, and business activities. Our team can help you model both scenarios before making a decision.

RESICO and the 183-Day Tax Residency Rule

Mexico applies the standard international threshold for tax residency: 183 days in a calendar year. Once you cross that threshold — or once Mexico clearly becomes your principal economic base — you are a Mexican tax resident and subject to Mexican income tax on your worldwide income.

This is the point at which RESICO becomes both relevant and important. Before you hit 183 days, you may be taxed in Mexico only on Mexican-source income (if any), which may be minimal or zero for a digital nomad. After 183 days, Mexico has a claim on all your income regardless of source.

Key Implications

• If you plan to spend significant time in Mexico — say, six months or more per year — you will likely cross into tax residency territory whether or not you have a formal residency visa.
• Having a Mexican temporary or permanent residency card does not automatically make you a tax resident. Tax residency is determined by days of physical presence and center of vital interests, not immigration status. That said, once you register with SAT (which residency card holders often do), SAT treats you as a tax resident for compliance purposes.
• RESICO can significantly reduce your Mexican tax liability once you are in this position. A digital nomad earning $5,000/month who is a Mexican tax resident could pay as little as $100–$125/month in Mexican income tax under RESICO, versus potentially $700+ under the general regime.
• You should also consider your home-country tax obligations. U.S. citizens, for example, are taxed by the IRS on worldwide income regardless of where they live. Mexico’s RESICO does not affect your U.S. tax filing obligation, though the foreign tax credit may apply. Speak to a cross-border tax specialist if you hold U.S., Canadian, or EU citizenship.

What We Help With

• Confirming your eligibility for RESICO
• Registering you under the RESICO regime with SAT
• Ongoing tax compliance and filings

Order Mexico RESICO Assistance →

Have questions? Book a consultation call first →

Frequently Asked Questions

Do I need an RFC to use RESICO?

Yes — you need to be registered with SAT and have an RFC. We can assist with RFC registration. See our Mexico RFC Tax ID page for details.

Can foreigners use RESICO?

Yes, if you are a Mexican tax resident (which comes with temporary or permanent residency) and meet the income thresholds.

What income does RESICO apply to?

Income from professional services, freelance work, and business activities. Once you are a Mexican tax resident, this extends to worldwide income from qualifying activities.

Can I use RESICO if my income is in USD?

Yes. The currency your clients pay you in does not determine your tax regime. What matters is that you are a Mexican tax resident and your activities qualify for RESICO. Your USD, EUR, or GBP income gets converted to MXN for SAT reporting purposes using the official exchange rate. The RESICO rates then apply to that peso equivalent.

Do I need a Mexican accountant for RESICO?

Technically no — RESICO was designed to be simpler, and some people manage their own monthly filings via the SAT portal. In practice, we strongly recommend working with a contador who understands expat situations. The cost is low ($50–$150/month) relative to the risk of errors, missed filings, or an SAT audit. Our team can connect you with vetted accountants.

What is the maximum income allowed under RESICO?

3,500,000 MXN per year from professional services and business activities — approximately $205,000 USD at current exchange rates. If you exceed this in a given year, SAT automatically reclassifies you to the general ISR regime for the following year. Note that this threshold applies to income from activities, not passive investment income.

Can I switch from RESICO to the general regime later?

Yes. You can request a regime change through the SAT portal at any time (effective the following month or tax year depending on the change). If your income grows beyond the RESICO ceiling, SAT will require you to switch. Some taxpayers voluntarily switch to the general regime when their deductible expenses are high enough to make it more advantageous.

Does RESICO affect my residency status?

No — registering for RESICO does not affect your immigration status or residency card. However, registering with SAT as a taxpayer does signal to Mexican authorities that you are present and economically active in Mexico, which may be factored into tax residency determinations. Registering with SAT is often required to open Mexican bank accounts and to formalize certain business activities.

Related Services

• Mexico RFC Tax ID: Registration & Requirements
• Mexico Residency
• Mexico Bank Account Assistance

For the full picture on how Mexico’s tax system works for foreigners, see our Mexico taxes for expats guide.

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