RESICO lets qualifying freelancers in Mexico pay just 1-2.5% on gross income. But if you're American, the low Mexican tax means less Foreign Tax Credit, and you may end up owing the IRS more. Here's the real math.
RESICO (Régimen Simplificado de Confianza) is Mexico's simplified tax regime launched in 2022. It replaces the old RIF regime and offers flat tax rates from 1% to 2.5% on gross monthly income for individuals earning under MXN 3.5 million (~$175,000 USD) annually. No deductions, no complex calculations — just a percentage of gross revenue paid monthly via the SAT portal.
To qualify, you must: be a Mexican tax resident (183+ days), be registered with SAT with an RFC number, earn under MXN 3.5M annually from professional services or business activities, not be a partner in a legal entity, and issue electronic invoices (facturas) for all income. Americans who freelance, consult, or run small businesses in Mexico can qualify if they meet these conditions.
Monthly income up to MXN 25,000: 1.00%. MXN 25,001-50,000: 1.10%. MXN 50,001-83,333: 1.50%. MXN 83,334-208,333: 2.00%. MXN 208,334-291,666: 2.50%. These are applied to gross income — no deductions. Compared to Mexico's standard progressive rates (which reach 35%), RESICO is dramatically lower.
Here's where most guides stop and ours starts. If you pay 1-2% Mexican tax via RESICO, your Foreign Tax Credit on your US return is only 1-2% — leaving you with a large US tax bill. Compare this to paying 25-35% under Mexico's standard regime, where the Foreign Tax Credit would offset most or all of your US tax. The guide runs three side-by-side scenarios: RESICO vs. standard Mexican regime vs. FEIE, showing total tax paid to both countries for typical freelancer income levels.
RESICO works best for Americans who: earn under the FEIE threshold ($130,000) and qualify for the exclusion, plan to use FEIE rather than Foreign Tax Credit, or earn most of their income from US sources (where Mexican tax rate is irrelevant). The guide identifies the specific income profiles where RESICO plus FEIE beats standard Mexican rates plus FTC.
Registration requires: an active RFC with tax address in Mexico, a FIEL/e.firma (electronic signature), and submission through the SAT portal. The guide includes screenshots and step-by-step instructions for the SAT registration process. If your Spanish is limited, the guide identifies which steps can be done online and which may require in-person visits. Full freelancing tax guide →
Yes, but there are rules. You can typically switch at the beginning of a fiscal year by updating your regime in the SAT portal. If your income exceeds MXN 3.5M, you're automatically moved to the standard regime. The guide covers the timing and process for switching, and when it makes sense to leave RESICO for the standard regime. Full tax overview →
Educational content only — not tax or legal advice. This guide is an orientation document. Tax law is complex and individual situations vary. Always consult a qualified US expat CPA and a licensed local attorney before making financial, visa, or property decisions. Figures are verified as of the date shown and subject to change. Full disclaimer →