Mexico introduced the Régimen Simplificado de Confianza—RESICO for short—back in 2022, and it’s still standing in 2026. I’ve watched governments promise “simplification” for years, only to pile on compliance burdens later. But RESICO? It’s actually usable. If you’re a freelancer, consultant, or small operator earning under 3.5 million pesos annually (roughly $175,000 USD at current rates), this regime might be your cleanest path to legal operation in Mexico.
Let me be blunt: most sole proprietorship regimes globally are traps. They promise ease but deliver complexity. RESICO is different. Not perfect—nothing the state touches ever is—but workable.
What Is RESICO, Really?
The English translation is “Simplified Trust Regime,” which sounds like bureaucratic poetry. Ignore the name. Focus on function.
RESICO is a tax regime for individuals earning business or professional income. You don’t incorporate. You register with SAT (Servicio de Administración Tributaria, Mexico’s tax authority) as a natural person. You invoice. You pay taxes monthly. Simple.
No separate legal entity. No double taxation. Just you and your hustle, with the state taking a predictable cut.
Who Can Use It?
Eligibility is straightforward:
- You’re a natural person (not a company)
- Your annual gross income stays below 3.5 million MXN ($175,000 USD)
- You provide services, sell goods, or earn professional fees
That threshold is key. Cross it, and you’re kicked into the general tax regime, where things get messier fast. Stay under, and you enjoy the benefits.
The Tax Structure: What You’ll Actually Pay
This is where RESICO shines. The Income Tax (ISR) rate is applied directly to gross income. No deductions. No receipts to hoard. Just flat percentages.
| Annual Gross Income (MXN) | ISR Rate |
|---|---|
| Up to $300,000 | 1.0% |
| $300,001 to $2,000,000 | 1.5% |
| $2,000,001 to $3,500,000 | 2.5% |
Yes, you read that correctly. If you earn 500,000 pesos ($25,000 USD) annually, your income tax is 1.5%. That’s 7,500 pesos, or about $375 USD per year. Compare that to Europe or North America, where sole proprietors often surrender 30-50% to the state.
But hold on. There’s also VAT.
Value Added Tax (IVA): The 16% Reality
Mexico charges 16% VAT on most goods and services. You collect it from clients, remit it monthly to SAT. It’s not your money—it’s the state’s, passing through your hands.
If you’re selling to other businesses, this is fine. They claim it back. If you’re selling to consumers, factor it into pricing. Don’t absorb it. That’s how you go broke.
Social Security: Optional, But Think Carefully
Here’s something unusual: social security (IMSS) is voluntary for independent workers under RESICO. You can opt into the “Personas Trabajadoras Independientes” scheme if you want access to public healthcare and eventual pension benefits.
Costs vary by age and declared income. A 35-year-old declaring 20,000 pesos monthly might pay around 3,000-4,000 pesos ($150-$200 USD) per month. That’s not trivial. But if you’re living in Mexico long-term, having IMSS coverage can be worth it—private insurance here can be expensive or denial-prone.
I don’t push people toward state systems. But Mexico’s IMSS is better than most. Your call.
Registration: The Actual Process
You register through SAT’s online portal. You’ll need:
- CURP (your Mexican population ID)
- Proof of address
- Email and phone number
If you’re a foreigner with a temporary or permanent residency card, you can still register. You need an RFC (tax ID), which you can obtain from SAT with your residency paperwork.
The whole process takes 1-3 days if you have documents ready. No notary required. No capital deposit. Just data entry and submission.
Monthly Obligations: What You’re Signing Up For
RESICO requires monthly tax filings. Due date: the 17th of the following month.
You report:
- Gross income received
- VAT collected
- ISR due (calculated automatically by SAT’s platform)
No expense tracking. No invoice scanning. Just numbers. If you made zero income that month, you still file—but mark it as zero. Skipping filings triggers penalties.
This is critical: don’t skip filings. Mexico’s tax authority is increasingly digitized and aggressive about non-compliance. Fines start small but compound fast.
The Hidden Traps (Because There Always Are Some)
RESICO is cleaner than most regimes, but it’s not trap-free.
1. The Turnover Cliff
Hit 3,500,001 pesos, and you’re kicked into the general regime. That’s not gradual. It’s instant. And the general regime demands expense deductions, which means you suddenly need to track and justify every peso spent. Many businesses aren’t ready for that.
Solution: Monitor income monthly. If you’re approaching the limit by Q3, consider deferring invoices to January or splitting operations.
2. No Deductions = Higher Effective Rate for High Earners
At 2.5% on gross income, RESICO seems cheap. But if your business has high costs—say, 50% of revenue goes to suppliers—you’re paying tax on money you never kept. In the general regime, you’d deduct those costs and pay tax on net profit.
This makes RESICO ideal for service providers (consultants, designers, writers) with low overhead. Less ideal for resellers or capital-intensive operations.
3. Foreign Clients and Tax Residency
If you’re invoicing clients outside Mexico, you’re still subject to ISR under RESICO. But you may also trigger tax obligations in the client’s country, depending on treaties and your residency status.
Mexico has tax treaties with 60+ countries. If you’re a non-Mexican resident operating under RESICO, verify your tax residency status carefully. The last thing you want is dual taxation because you didn’t notify your home country you’d left.
Why This Matters for Flag Theory
I don’t recommend Mexico as a zero-tax jurisdiction—because it isn’t one. But for digital nomads, location-independent professionals, or those seeking a low-cost base with legal clarity, RESICO is a tool.
Mexico offers:
- Low effective tax rates (1-2.5% ISR for most)
- No wealth tax, no inheritance tax
- Reasonable cost of living in most regions
- Straightforward residency paths (temporary visas are easy to obtain)
Pair RESICO with a non-resident banking setup in a stable jurisdiction, and you have a functional, affordable operating base. Not perfect. Not zero. But workable.
Practical Takeaway
If you’re earning under $175,000 USD annually and can operate from Mexico, RESICO is worth serious consideration. The tax burden is minimal. The compliance is manageable. The state, for once, isn’t actively sabotaging small operators.
Check SAT’s homepage (gob.mx/sat) for the latest updates. They occasionally tweak thresholds or rules, and 2026 is an election cycle year—always a risk period for tax changes.
Don’t sleep on this. Most people discover regimes like this years too late, after they’ve overpaid elsewhere. You’re ahead of the curve. Act accordingly.