# Canadian Ex-pats residing in Mexico



## HolyMole (Jan 3, 2009)

Once again, we are considering selling our Canadian home and moving full-time to Mexico. Deciphering Canada Revenue Agency information re, for example, residency for tax purposes, etc. is a time-consuming, frustrating exercise....and often doesn't answer our questions, which perhaps could best be answered by someone who has actually done what we envisage, or is in the process of doing so.
We don't want to bore Forum regulars with our questions, and would really appreciate if anyone who can share their relevant experiences would contact us via Personal Message. We could then exchange e-mails. 
To narrow down our situation, if we proceed to sell our home:
---we presume we would meet Mexican income/financial requirements to qualify for 
FM3s, (or whatever they're called these days)
---we would own no property in Canada
---all our immediate family, (children, grandchildren, brothers,sisters, etc) reside in
Canada
---all our income is from Canadian sources, (small bank interest, OAS, CPP & QPP,
my superannuation/pension as a retired Federal public servant)
---we both currently hold RRSPs and TFSAs, (my RRSP to be "converted" in 2016).
---we would not work in Mexico, nor have any Mexican-sourced income, except 
possibly for some bank interest, should we open Mexican bank account(s).
Can you help, or know someone who could? If so, send us a PM.


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## JeriLyn (May 8, 2015)

Now is a good time to start planning, and your planning can be pro-active as opposed to reactionary. Look at the differences in tax liability with the different residencies, what is more beneficial to you .... then look at the criteria, can you meet it? 

I can not answer your specific questions, nor can someone else here, unless they have the same income/amounts and province as you or they are a tax professional..... so save yourself what could be thousands yearly and talk to a profession.

If your interested in learning more, Canada Revenue Agency does have phamplets and guides available ~ you should be able to google this stuff


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## Deendah (Jun 22, 2012)

Hey Don; Just a reminder, that perhaps, you forgot a couple other factors about moving down south year-a round. Rainy season-humidity, not like winter mos.- and life-style-¿who is around during the mos. of April to Oct.? Daryl


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## Hound Dog (Jan 18, 2009)

Deendah said:


> Hey Don; Just a reminder, that perhaps, you forgot a couple other factors about moving down south year-a round. Rainy season-humidity, not like winter mos.- and life-style-¿who is around during the mos. of April to Oct.? Daryl


What are youn really trying ton say Daryl? Rainy season and humidity? Life- style? Please explain yourself if you have any real interest and, if not, please don´t mislead people who have honest questions. Mexico has many climate variations but there is nothing here even approaching the utter misery of anyplace in Canada


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## Isla Verde (Oct 19, 2011)

Deendah said:


> Hey Don; Just a reminder, that perhaps, you forgot a couple other factors about moving down south year-a round. Rainy season-humidity, not like winter mos.- and life-style-¿who is around during the mos. of April to Oct.? Daryl


What part of Mexico are you referring to?


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## sparks (Jun 17, 2007)

Don't worry about interest from a normal bank account ...... very hard to find


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## Isla Verde (Oct 19, 2011)

sparks said:


> Don't worry about interest from a normal bank account ...... very hard to find


Quite true. I'm just glad to have an account with a Mexican bank that doesn't levy a service charge as long as I maintain a minimum monthly balance of $2000.


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## Greenlady (Feb 8, 2013)

Hound Dog said:


> What are youn really trying ton say Daryl? Rainy season and humidity? Life- style? Please explain yourself if you have any real interest and, if not, please don´t mislead people who have honest questions. Mexico has many climate variations but there is nothing here even approaching the utter misery of anyplace in Canada


LOL!!!!!!!!. You've spent time here? We spent some time in Tulum in June with a and I have to say it was brutal on us delicate Canadian creature. Pretty much the 'polar' opposite of a Canadian winter.


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## Longford (May 25, 2012)

Isla Verde said:


> Quite true. I'm just glad to have an account with a Mexican bank that doesn't levy a service charge as long as I maintain a minimum monthly balance of $2000.


I pay no service charge on my bank accounts in the USA, and that's not because I'm carrying large balances. Persons who have direct deposits of income into their account are fee-free at my banks, and some/many banks offer Seniors fee-free accounts. As for interest income ... almost non-existent on checking and savings accounts, and CD accounts pay a pittance these days.


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## Isla Verde (Oct 19, 2011)

Longford said:


> I pay no service charge on my bank accounts in the USA, and that's not because I'm carrying large balances. .../QUOTE]
> 
> Two thousand pesos is not a large balance (right now about $133.00 US) which is what my bank requires at the moment to avoid a service charge.


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## Longford (May 25, 2012)

Isla Verde said:


> Two thousand pesos is not a large balance (right now about $133.00 US) which is what my bank requires at the moment to avoid a service charge.


You're right, that's a pittance of a required no-fee balance.


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## Isla Verde (Oct 19, 2011)

Longford said:


> You're right, that's a pittance of a required no-fee balance.


And until a few months ago, it was just $1000 MN.


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## sparks (Jun 17, 2007)

Banamex was 1000 to open and 1000 to be free. Trouble is I get a statement in the mail every 5-6 months so notices ???


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## Isla Verde (Oct 19, 2011)

sparks said:


> Banamex was 1000 to open and 1000 to be free. Trouble is I get a statement in the mail every 5-6 months so notices ???


Not so good. I get one in the mail every month from Santander.


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## TundraGreen (Jul 15, 2010)

sparks said:


> Banamex was 1000 to open and 1000 to be free. Trouble is I get a statement in the mail every 5-6 months so notices ???


I don't understand your last sentence. "so notices" what?

I get all my bank statements by email once a month.


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## Bobbyb (Mar 9, 2014)

Hound Dog: Sometimes you have a good sense of humor but your remarks about Canada may have been intended to be cute however they are NOT. If you were referring to the weather It is only bad in the winter. Canada ranks way above Mexico or the USA on the lists of the best countries in the world: Education, social services, low crime rates, cost of living, etc. Neither Mexico nor the USA has a social safety net equal to Canada. Winters can be brutal but some people like winter outdoor sports ( think Colorado). Personally I prefer Mexican winters!


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## HolyMole (Jan 3, 2009)

TundraGreen said:


> I don't understand your last sentence. "so notices" what?
> 
> I get all my bank statements by email once a month.


Talk about thread creep! Nine of fourteen responses deal with the minutiae of Mexican bank accounts. No wonder I asked for PM's in response. My aim was to simply describe our sources of income....and the only income we might ever have from a Mexican source might be some small interest from (extremely) modest bank savings accounts. 

Deendah: Your points about the off-season weather, humidity, and "social scene" are certainly valid, but for the purposes of this exercise, assume we're past that. Every time we face the issue of emigrating, it always comes down to anticipated difficulties selling our home, (which we would absolutely have to do), and concerns over the availability, cost and/or quality of healthcare. That, and the fear that, if we had to return home for whatever reason - whether it was after a year or 5 years, or 10 years - we would be frozen out of the housing market. We may come to the conclusion that we are already living the best of both worlds right now: half the year in Zihua and the other half in the Okanagan Valley. 

JeriLyn: Our financial situation is nowhere near complicated enough to justify talking to a "tax professional". And when it comes to emigrating to Mexico, I expect I already know as much as most of the "professionals" up here.

(Here's where the peanut gallery says: "So why are you asking for help on an ex-pat forum?")


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## ojosazules11 (Nov 3, 2013)

You may already be familiar with these websites, but in case you're not ....

Determining your residency status

Income Tax Folio: S5-F1-C1, Determining an Individual's Residence Status


CRA states they decide if a person is a "deemed" or "factual" resident for tax purposes on a case by case basis. Here is a link to a form that can be sent to CRA to have them determine if you would or would not be considered resident in Canada for tax purposes, even if living full-time in Mexico. 

NR73 - Determination of Residency Status (Leaving Canada)

Based on the following paragraph, even if CRA considers you a non-resident, you are still subject to tax on income from sources inside Canada, which according to your post is all your income. 

_"Under the Canadian income tax system, an individual's liability for income tax is based on his or her status as a resident or a non-resident of Canada. An individual who is resident in Canada during a tax year is subject to Canadian income tax on his or her worldwide income from all sources. Generally, a non-resident individual is only subject to Canadian income tax on income from sources inside Canada.

An individual who is resident in Canada can be characterized as ordinarily resident or deemed resident. An individual who is ordinarily resident in Canada will be subject to Canadian tax on his or her worldwide income during the part of the year in which he or she is resident in Canada; during the other part of the year, the individual will be taxed as a non-resident. An individual who is deemed resident in Canada in a particular year will be subject to Canadian income tax on his or her worldwide income throughout that year."_


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## HolyMole (Jan 3, 2009)

Thanks, ojosazules11. Yes, we have all that Canada Revenue Agency info.

One (relatively simple) question we've been unable to have CRA answer is this:

Assume, for the moment, that CRA decides we are "non-residents" for Canadian income tax purposes. Then, under the existing tax treaty between Canada and Mexico, each of our income sources, (all Canadian) would be required to withhold 15% income tax from all payments....OAS, CPP/QPP, my Federal gov't pension....and at least 15% from any future RRIF withdrawals.

Right now, due to our relatively low joint income, and thanks to income splitting, our actual income tax obligation is very low....much closer to 1 or 2%, rather than 15%.

Question: If 15% income tax has been withheld, but our actual tax obligation is substantially lower, do we get refunds when we submit our tax returns?

As "non-residents" for tax purposes, we can't imagine that we would be required to pay more Canadian income tax than a "resident". But who knows?


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## sparks (Jun 17, 2007)

TundraGreen said:


> I don't understand your last sentence. "so notices" what?
> 
> I get all my bank statements by email once a month.


I live in the sticks and I think the "mailman" just doesn't feel like it ..... because it's all the mail I get. I'm sure the statements are issued from a central location and not the local bank .... so maybe they don't get to Melaque.

I'm gonna ask other Gringos here


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## ojosazules11 (Nov 3, 2013)

HolyMole said:


> Thanks, ojosazules11. Yes, we have all that Canada Revenue Agency info.
> 
> One (relatively simple) question we've been unable to have CRA answer is this:
> 
> ...



I'm pretty sure you'd get any refund owing after filing your income tax, regardless of residency status. The 15% withholding for non- residents is likely just to make sure if you don't file a return the gov't still gets money. I also think you're more likely to be considered "residents for tax purposes" as long as you're using Canadian passports and getting all your income from Canadian sources. But of course, CRA has to determine that.

Have you called Rev Canada to ask about the specific question of getting a refund from the withholding tax paid if you are deemed non-residents? I recently had to call CRA with a question, and they were very helpful. I wasn't even on hold very long.


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## Deendah (Jun 22, 2012)

Don; I agree with Ojosazules, talking to CRA is your best bet for tax questions. Diane deals with IRS and CPR frequently and she is always amazed at the differences between the 2. Now, about telephone wait times, ummm.. that would be 'tolerance subjective' I think. Daryl


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## ojosazules11 (Nov 3, 2013)

This might be helpful - it confirms that you can file an income tax return and receive a refund (bolding below is mine). It also indicates there is a form you can complete requesting the withholding tax percentage be reduced. 

"Under section 217 of the Act, a non-resident may elect to file a Canadian income tax return, within six months of the end of the year in which Canadian benefits are received, reporting pension benefits and similar types of income received from Canada. This allows the non-resident to claim non refundable tax credits, and to *pay tax on that income at the same rates as applicable to the residents of Canada*. The non-resident tax withheld from the elective income may be claimed as a tax credit on the return. *If an individual makes an election under section 217, and the tax calculated on the return is less than the tax withheld, the excess will be refunded. *For more information, see T4145 – Electing Under Section 217 of the Act.

Furthermore, a non-resident may apply to reduce the amount of tax withheld on pension and similar types of income received from Canada. The application is made by submitting Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld. The information on Form NR5 allows the CRA to determine if an election under section 217 of the Act is beneficial. If Form NR5 is approved, the CRA will advise the payer to reduce the rate at which tax is withheld. When non-resident tax is reduced based on Form NR5, the non-resident must file a Canadian income tax return within six months of the end of the taxation year in which the income is received. For more information, see relevant sections of the current version of the Information Circular 77-16 Non-Resident Income Tax."


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## HolyMole (Jan 3, 2009)

ojosazules11 said:


> This might be helpful - it confirms that you can file an income tax return and receive a refund (bolding below is mine). It also indicates there is a form you can complete requesting the withholding tax percentage be reduced.
> 
> "Under section 217 of the Act, a non-resident may elect to file a Canadian income tax return, within six months of the end of the year in which Canadian benefits are received, reporting pension benefits and similar types of income received from Canada. This allows the non-resident to claim non refundable tax credits, and to *pay tax on that income at the same rates as applicable to the residents of Canada*. The non-resident tax withheld from the elective income may be claimed as a tax credit on the return. *If an individual makes an election under section 217, and the tax calculated on the return is less than the tax withheld, the excess will be refunded. *For more information, see T4145 – Electing Under Section 217 of the Act.
> 
> Furthermore, a non-resident may apply to reduce the amount of tax withheld on pension and similar types of income received from Canada. The application is made by submitting Form NR5, Application by a Non-Resident of Canada for a Reduction in the Amount of Non-Resident Tax Required to be Withheld. The information on Form NR5 allows the CRA to determine if an election under section 217 of the Act is beneficial. If Form NR5 is approved, the CRA will advise the payer to reduce the rate at which tax is withheld. When non-resident tax is reduced based on Form NR5, the non-resident must file a Canadian income tax return within six months of the end of the taxation year in which the income is received. For more information, see relevant sections of the current version of the Information Circular 77-16 Non-Resident Income Tax."


Muchisimas gracias. And it even makes sense.

By the way, for the first time, we filed our income tax on-line this year, using one of the "free" web services (pay by donation) that CRA supports. It even saved us a few dollars more than the hard-copy calculations I had done.....enough to cover the voluntary donation. I asked if, in future, we could use that same on-line service to file from Mexico and the answer was "yes".


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## PVdreamer (May 25, 2015)

*following*

I am following this as I am trying to figure out how to make a move down there and debating between doing it full time or part time and not sure what makes the most sense for us from a financial perspective.


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## RVGRINGO (May 16, 2007)

Have you stayed in PV over a summer? It is not like it is in the winter; not at all.
Tourist permits are good for up to 180 days; then you must leave Mexico.
Residence visas have financial requirements and must be applied for at a Mexican Consulate where you reside now.....Canada.


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## maesonna (Jun 10, 2008)

HolyMole, you asked, _“if we proceed to sell our home: ---we presume we would meet Mexican income/financial requirements to qualify for FM3s, (or whatever they're called these days)”_

The income/financial requirements are: either sponsorship from a Mexican employer (I think I’m safe in assuming this won’t apply to you) or:
either a) show bank statements proving you have had a big chunk* of money for the previous 12 months,
or b) show bank statements or income statements proving you have had a regular income** over the previous 6 months. In the case of monthly income, this of course has to be an income that will continue when you are living in Mexico, such as a pension or investment income. 

The amounts are different depending on whether you are applying for a temporary or permanent visa (see below). The amounts are higher for permanent than for temporary.

If you go for the temporary visa, it runs for four years, then you have to either convert to a permanent visa or leave. (There would also be the theoretical option of surrendering the visa and applying for a new temporary visa, but with no guarantee that you would get it –- it would be an entirely fresh application starting from scratch, and under the present system you would again have to apply at a consulate outside Mexico.) 

---------------
* **Here is the best information I’ve been able to find about the amounts required:

Temporary resident applicant: prove you have had either at least 1,402,000 pesos in your bank account over the last 12 months, OR that you have received a monthly income of at least 28,040 pesos per month for the last 6 months.

Permanent resident applicant: prove you have had either at least 1,752,500 pesos in your bank account over the last 12 months, OR that you have received a monthly income of at least 35,050 pesos per month for the last 6 months.

It is very easy to find the exchange equivalent – you don’t even have to go to any special website, just type into a Google search the following (for example):* 28040 mxn to cad*

Of course, at the time of your application, the Mexican consulate may use a slightly different exchange rate, but it gives you a general idea.


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## Belizegirl (Oct 21, 2010)

I received this information via email from the Mexican Consulate in Calgary today regarding income requirements:

For Temporary Resident Visa;

a.	Economic solvency:
1.	Original and a photocopy of investment receipts or bank statements showing an average monthly balance of $29,407.00 Canadian dollars during the past twelve months; or

2.	Original and a photocopy of documents showing that the applicant has employment or a pension with a monthly tax-free income of over $1,764.00 Canadian dollars during the past six months.

For Permanent Residency Visa;

a. Retirees or Pensioners:
1.	Original and a photocopy of investment receipts or bank account statements showing an average monthly balance equivalent to $117,628.00 Canadian dollars during the last twelve months, or

2.	Original and a photocopy of proof of tax-free monthly income from pensions in an amount greater than $2,941.00 Canadian dollars during the past six months.


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## HolyMole (Jan 3, 2009)

Thanks to Belizegirl, maesonna, ojosazules et al., for the good info. 
Unlike some, who seem able to just pull-up stakes and "go for it", we're the kind who reasearch things to death, then end up doing nothing. I just turned "three score and ten" and have the feeling that it's time to "sh_t or get off the pot", if I can be so crude.

Other than anticipated problems selling our home here in Canada, the "big three" holding us back from taking the plunge are: (probably in order) 
----oppressive heat and humidity for 5 or 6 months/year in the area we prefer
----health care concerns
----continuing (worsening?) political instability 

Anyway, thanks for the help. No matter WHAT we decide, we'll still be heading south around mid-October for another season in Zihua.


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## HolyMole (Jan 3, 2009)

Belizegirl said:


> I received this information via email from the Mexican Consulate in Calgary today regarding income requirements:
> 
> For Temporary Resident Visa;
> 
> ...


Out of curiosity, are the income requirements for a Resident Visa, whether Temporary or Permanent, now the same for each spouse? As sexist as it may have been, in the past the income requirement was higher for the husband, while his spouse required only about half of his income.

As an aside - and I'm sure I'm not the only one to ask this question - why would the Mexican government make it more difficult for foreigners, especially retirees, to qualify for residency visas? Are they afraid of indigent gringos making demands on the almost non-existent Mexican social safety net?


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## AlanMexicali (Jun 1, 2011)

HolyMole said:


> Out of curiosity, are the income requirements for a Resident Visa, whether Temporary or Permanent, now the same for each spouse? As sexist as it may have been, in the past the income requirement was higher for the husband, while his spouse required only about half of his income.
> 
> As an aside - and I'm sure I'm not the only one to ask this question - why would the Mexican government make it more difficult for foreigners, especially retirees, to qualify for residency visas? Are they afraid of indigent gringos making demands on the almost non-existent Mexican social safety net?


Forget about the old Mexican Immigration law. The new law requires a spouse of any first time applicant or a previous visa holder that broke their visa status to show financial solvency for each applicant at a Mexican Consulate. Same amount as posted above for Canadians. You might be thinking of the old Immigration law where a retiree could apply inside Mexico and show financial support for their spouse to have them getting approved for a visa. This is no longer the case. It is even easier now.

Any first time applicant that is approved at a Mexican Consulate can go to Mexico to their local INM office, complete the process, then once they have their visa in hand the spouse can apply at the same INM office be processed for the same visa as the spouse with only having a FMM tourist card. That includes Residente Permanente and Residente Temporal.

As far as some Gringos making demands on their social systems with free or almost free medical and other social programs that was a bit of a cheap shot. IMO


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## PVdreamer (May 25, 2015)

Belizegirl said:


> I received this information via email from the Mexican Consulate in Calgary today regarding income requirements:
> 
> For Temporary Resident Visa;
> 
> ...


does the monthly balance include RRSPs and investments or just a bank account?


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## RVGRINGO (May 16, 2007)

The requirements are per individual. However, if you came to Mexico with an approved canje for Residente Temporal, then completed the process with INM and got your visa card, I think your tourist wife could then apply for equal status, within Mexico, under vincula familiar rules, and not have to prove any additional financial resources.


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## Longford (May 25, 2012)

HolyMole said:


> As an aside - and I'm sure I'm not the only one to ask this question - why would the Mexican government make it more difficult for foreigners, especially retirees, to qualify for residency visas? Are they afraid of indigent gringos making demands on the almost non-existent Mexican social safety net?


When Mexico tightened/revised it's regulations/laws regarding expats seeking to reside in Mexico I looked at what many other countries were doing at the time and it appeared to me that Mexico was following pretty closely what the countries I looked at where doing as far as income requirements, paperwork, etc. The thresholds are set, I'm recalling (or maybe it's just the fees), as a multiple of the official daily wage in Mexico City for a given year. That base number continues to rise, yearly. If I'm mistaken about the calculation someone will point that out.  The government has been moving, ever so slowly, to get a grip on registering non-Mexicans in the country, for various reasons. The borders have, traditionally, been pretty porous IMO. As for the "social safety net" in Mexico: I doubt anyone's going to seriously claim what's available in Mexico is as expansive or of a higher quality as is available in either the USA or Canada.


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## HolyMole (Jan 3, 2009)

RVGRINGO said:


> The requirements are per individual. However, if you came to Mexico with an approved canje for Residente Temporal, then completed the process with INM and got your visa card, I think your tourist wife could then apply for equal status, within Mexico, under vincula familiar rules, and not have to prove any additional financial resources.


Thanks for this - it clarifies an earlier post that seemed somewhat contradictory. As far as that poster's claim that it is now easier to obtain a Residente Temporal (than it was to obtain the old FM3), I disagree. The current income requirements are significantly higher and, most important - at least for one of the spouses, requires travelling to a Mexican Consulate, instead of both spouses being able to apply from within Mexico. For us, that means a 600 mile roundtrip to Vancouver and probably at least a couple of nights of hotel expenses. 
Per Google, "vincula familiar" means "family ties". If I qualify for a Residente Temporal at the Vancouver Mexican Consulate, then obtain my actual visa at INM in Zihuatanejo, and my spouse applies for a similar visa at INM under the "vincula familiar" provision, are there now no income requirements at all for my spouse?


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## Isla Verde (Oct 19, 2011)

HolyMole said:


> . . .
> Per Google, "vincula familiar" means "family ties". If I qualify for a Residente Temporal at the Vancouver Mexican Consulate, then obtain my actual visa at INM in Zihuatanejo, and my spouse applies for a similar visa at INM under the "vincula familiar" provision, are there now no income requirements at all for my spouse?


That should be "víncul*o* familiar", and yes it does mean "family ties". 

vínculo translation English | Spanish dictionary | Reverso


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## RVGRINGO (May 16, 2007)

Yes, she can apply and there should be no need for her to prove financials as a dependent.


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## Isla Verde (Oct 19, 2011)

I have split off from this thread all the posts dealing with the Mexican social safety net, or the lack thereof. The new thread is called (surprise, surprise!) Social Safety Net in Mexico? .


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