Expatriate Forums in Mexico

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sneaker86 — Thu Jul 30, 2009 2:23 am

Author: sneaker86

Posted: Thu Jul 30, 2009 2:23 am

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cheap-sneaker86 — Thu Jul 30, 2009 1:51 am

Author: cheap-sneaker86

Posted: Thu Jul 30, 2009 1:51 am

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Best wishes!
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2. Fast shipping : 4-6 business days
3. Dropshipping available
4. Payment Method : Western Union , moneygram, Bank Transfer
5. Accept the smallest order
6. EMS,DHL,TNT,FEDEX etc

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zgw_popular — Sat Jun 27, 2009 1:48 am

Author: zgw_popular

Posted: Sat Jun 27, 2009 1:48 am

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karwen — Tue Jun 23, 2009 10:05 am

Author: karwen

Posted: Tue Jun 23, 2009 10:05 am

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looking for auditing or finance related jobs

zaabdoel — Wed Apr 01, 2009 11:27 am

Author: zaabdoel

Posted: Wed Apr 01, 2009 11:27 am

My solid background as a financial auditor and officer, financial consultant, partner in the solar panel business, and assistant controller for a multimillion European Program, has allowed me to hone my considerable skills that can be effectively utilized by your organization and makes me feel confident of the skill I can bring to your opening.

In addition of pursuing a financial job with more IT aspects included and for example the alignment between financial and with IT (systems), I completed the IT auditing study in December 2003. Because of the IT auditing study and consultancy work, my background also includes/knowledge of:
 Full spectrum of services, including strategic planning, S.W.O.T. analyses, cost-benefit analyses and financial reporting, Computer skills ( including Oracle Financial), project-, risk-, and performance management, working in teams as well as working solely, managing people, Analytical skills

 continuing pursuit of increased knowledge in finance and IT field

 Comprehensive consultation experience
At last, I traveled a lot to SE Asia (including living in Singapore and Malaysia for a few months), Canada and the US. I just came back from Spain, Alicante, where I worked and lived for about 2 years.

I prefer contract/freelance positions within IT or financial auditing preferably risk-, project- and performance management, but I will also consider other financial positions. Furthermore I prefer to work internationally or a job with international assignments. Available: 16th of March.

Hope to hear from you soon.

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msrank — Wed May 14, 2008 1:49 am

Author: msrank

Posted: Wed May 14, 2008 1:49 am

I am looking for a Mexican parter that owns a broadcast liscense, am or fm in the northshore are of Lake Chapala/Ajijic Small wattage would be great. Have some interesting programing ideas that would sell advertising. Please contact me if you know or are that person.

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Virgolight — Sun Jun 03, 2007 10:02 pm

Author: Virgolight

Posted: Sun Jun 03, 2007 10:02 pm

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We are looking for inspired and motivated city franchisers

annateklinska — Fri Feb 02, 2007 2:11 pm

Author: annateklinska

Posted: Fri Feb 02, 2007 2:11 pm

Visitopia is a commercial community travel website where we give everyone the opportunity to share information with each other. Here’s where you come in!

For the represented cities on our website we need franchisers to manage the writers for that city page. When you live in a city and you know a lot about it, you could make money by managing the writers and information for that city. We are a growing company, so therefore we could always use new city franchisers from all over the world. The franchiser will be responsible for the quality of the continuous information stream, written by the city writers. This could be a good opportunity to develop your managing skills and you will get direct feedback from the site visitors related to the bookings made on your city bookings page.

If you are interested in this job or know someone who might be interested, please feel free to mail Visitopia at annateklinska@visitopia.com or sign up on www.visitopia.com.

Thanks for your interest in Visitopia.com!

EMPLOYMENT IN MEXICO / MEXICO EMPLOYMENT GUIDE

Mexico Info — Fri Dec 01, 2006 11:39 am

Author: Mexico Info

Posted: Fri Dec 01, 2006 11:39 am

EMPLOYMENT IN MEXICO

You are not permitted to travel to Mexico, enter as a tourist and seek gainful employment there. You must have the correct migratory permits to do so before you go.

Permits are gained from the Mexican Government and are issued to people who are sponsored by companies in Mexico (or foreign companies with Mexican operations / subsidiaries), or by people with specific skills required in Mexico. You can enter Mexico to work for a foreign company provided that you do not receive any remuneration directly from a Mexican company or subsidiary.

Permits can also be arranged for investors (i.e. setting up your own company), but you'll need to invest 40,000 times the daily minimum salary in order to qualify. Casual investors (for example, buying stocks on the Mexican Stock Exchange) can also get resident permits, although as with direct investment, you will need to invest the same amount as above.

These mechanisms are in place to ensure that you will not be:
a) taking jobs that Mexican nationals could otherwise have and/or;
b) ensure that if you don't have an immediate income, you have the means to support yourself without relying on the Mexican State in any way.

The kind of work you do will depend on your circumstances. If you are an employee of one of the many large multi-national corporations that have offices or manufacturing facilities in Mexico, you may be assigned to the country for a specified period of time, to report to the local management and carry out duties according to your specialist knowledge. In such circumstances, your company will normally take care of all the necessary legal paperwork and the logistics of the move to Mexico. You show up at the office with a brief and work at what it is you do best.

Some foreigners decide to move to Mexico and set up a small business there: perhaps a bar or a restaurant. Some people sell consulting services, either in business development, and especially in IT and Internet related fields.

Teaching English as a Foreign Language is a popular work placement. You will need to hold the TEFL certificate (as a minimum) and with it, you'll have a chance to work in one of the many private schools and language centres based in Mexico. Learning English is an absolute requirement for Mexicans who want a professional qualification. Most private schools teach at least half of their lessons (including math and sciences) in English.

Those with specialist skills and experience, plus the relevant qualifications are more likely to succeed in finding work than those who just show up in the hope of 'casual' work in Mexico.

Some foreigners go to Mexico to take part in community and social projects. By doing so, they help local people by sharing their knowledge and experience, while gaining unique and authentic access to the local ways of life, culture and language.

DOING BUSINESS IN MEXICO / MEXICO BUSINESS GUIDE

Mexico Info — Fri Dec 01, 2006 11:16 am

Author: Mexico Info

Posted: Fri Dec 01, 2006 11:16 am

DOING BUSINESS IN MEXICO

FORMS OF BUSINESS ORGANISATION

Principal forms of doing business

Mexico has all the usual forms of business organisation, including the stock company (sociedad anónima—SA) and the limited-liability company (sociedad de responsabilidad limitada—SRL). Any of them can be of variable capital (CV).

Requirements of an SA in Mexico
Capital. Minimum Ps50,000, at least 20% of which must be paid in initially. Shares payable in kind must be paid in full immediately and remain on deposit with the corporation for two years; if the assets represented by the shares decline in value by more than 25% during that period, the shareholder must pay in the difference. Firms must place 5% in a legal reserve until the reserve equals 20% of authorised capital.

Shareholders. Minimum two shareholders (one may hold only one share). Board of directors, minimum of two. A minority that holds 25% or more of shares (10% if company shares are traded on Mexico’s stock exchange) has the right to appoint one director. Foreigners may be appointed to the board only in direct proportion to the authorised foreign capital participation in the company. There are no residency requirements for board members.

Management. One individual manager may be appointed. There are no nationality requirements.

Labour. There is no requirement that labour be represented on the board. Firms must distribute 10% of pre-tax profits to employees.

Disclosure. Corporations must be supervised by examiners, who are appointed at a shareholders’ meeting (a 25% minority can name additional examiners). No publication requirements (except for companies listed on the stock exchange).

Taxes and fees on incorporation are minor, but legal fees might be substantial. In accordance with the Mexican Income Tax Law, corporations with gross income exceeding Ps27.4m, assets exceeding Ps54.9m, or more than 300 employees must file a special report prepared by an independent public accountant with the tax authorities.

Types of shares. Only nominative shares are permissible. For purposes of “Mexicanisation”, shares are often classified as “A” or “B”, with “A” shares restricted to Mexican ownership. Foreigners often hold non-voting “N” shares; “T” shares exist for companies that own agricultural land. Special labour shares may be issued. Founders may receive up to 10% of the corporation’s profits every year during the first ten years of existence by means of founder bonds, provided the shareholders have received at least a 5% dividend each year. Shares may be common or preferred. Preferred shares carry limited voting rights (exercisable only during actions to transform, merge, dissolve or make other major changes) and receive a cumulative dividend (usually 5%, sometimes less) before the common shares may participate in the corporation’s profits.

Control. A simple majority of shareholders has control, unless the charter calls for a larger majority (as frequently occurs for major decisions). Annual general meetings are required; representatives of half the corporate capital constitute a quorum. For extraordinary meetings (that is, those undertaking major changes in the corporation), 75% of capital is necessary for a quorum on first call and 50% thereafter. Decision is by a simple majority.

Establishing a branch

Although a few companies have established them, branches are at a disadvantage for several reasons. Mexican authorities do not regard them highly; they may not own real estate; and they may not deduct payments to the parent for royalties, interest, fees or other services. Moreover, establishing a branch takes more time and money than establishing a corporation, and branch charters usually contain more restrictions than corporation charters. Because branch offices are not legally separate from the parent company, parent companies can be held responsible for the liabilities of a branch.

Approval from the Secretariat of Foreign Relations (Secretaría de Relaciones Exteriores) is no longer necessary (since July 1996) for a foreign company to open a branch office in Mexico. Newcomers instead deal exclusively with the Secretariat of the Economy (Secretaría de Economía), thus reducing the time and paperwork involved.

Setting up a company

Mexico has all the usual forms of business organisation, including the stock company (sociedad anónima—SA) and the limited-liability company (sociedad de responsabilidad limitada—SRL). Several other forms of organisation are suitable only for small operations, such as a general partnership (sociedad en nombre colectivo) and a joint-stock company (sociedad en comandita por acciones). Foreign companies are subject to the same laws as local firms. The permit for establishing a company requires inclusion of the Calvo Clause in the byelaws and on share certificates. This clause waives the right to invoke foreign diplomatic intervention and relinquishes any claim to treatment different from that accorded to Mexican nationals.

The SA and the SA de CV are the most frequently used forms of organisation for foreign investors. The SA most closely resembles the public limited company or corporation. Foreign investors with wholly owned subsidiaries that want added flexibility in increasing or decreasing capital have favoured the SA de CV. The only difference between the SA and the SA de CV is the variable portion of an SA de CV’s capital stock, which is usually unlimited.

Organising a local corporation can take two to four weeks or longer, depending on the complexity of the project. A permit must first be secured from the Secretariat of Foreign Affairs. A minimum of two shareholders must then appear before a notary public to sign the deed of incorporation, which must contain the names, nationalities and other particulars of the founders; the name, domicile, purpose and duration of the company; a breakdown of its capital and a statement of the founders’ contributions and their value; a description of the manner of administration; names of directors, managers and supervisors; the manner of liquidation; and all other special agreements that will regulate the operation. Usually, at least 20% of the capital shares must be paid immediately, and the remainder within one year.

BUSINESS TAXATION

Overview

In late 2004 a proposal was introduced to reduce the current applicable tax rates by 3 percentage points, ie 15–12% and 10–7%. Creating a new tax that imposes a 3% levy on the sale of goods and public services would compensate the reductions. This attempt was blocked by the Congress because of the lack of an agreement between the Partido Acción Nacional (PAN) and the Partido Revolucionario Institucional (PRI).

The gradual reduction of the corporate tax rate had already been implemented in 2002, aiming to make Mexico more attractive for foreign investment. It was expected that for 2005 the corporate tax rate would be 32%. However, tax reforms for 2005 made significant changes in domestic tax law. The aforementioned reforms provide for a 30% corporate tax rate applicable in 2005. The gradual reduction of the corporate tax rate—declining by 1 percentage point per year—remains in force from 2005 to 2007, when the corporate tax rate will be 28%. Mexico has made electronic filing mandatory for companies and individuals, except for those conducting business activities with annual revenues of less than Ps1.7m and for individuals with no business activities with annual revenues of less than Ps0.3m. Monthly filing is also mandatory for all taxpayers, except for a special small-taxpayer regimen and a rental-income regimen.

The Finance Secretariat, headed by Francisco Gil Diaz, has vowed to continue the fight to eliminate IVA exemptions, since zero-rate and exempt industries create tax loopholes that hinder revenue collection.

An October 1999 agreement signed by the US and Mexico allows maquiladora owners to avoid being taxed as Mexican companies if they opt for an advance-pricing agreement. This agreement can take the form of a Mexican transfer-pricing or safe-harbour pact, and is described as a miscellaneous (a directive published by the Ministry of Finance that remains in force until the ministry or the government changes it), which allows the maquiladora to remain a non-Mexican establishment for tax purposes. The miscellaneous was extended in 2002 until 2007. However, the maquiladora industry cited tax-status uncertainty as a disincentive for investment in Mexico since the changes are not written into the body of the Income Tax Law (Ley del Impuesto sobre la Renta). As of 2003, the options for maquiladoras to be taxed are included in the Income Tax Law.

Mexico’s tax regime is competitive with those of other North and South American countries; historically, however, Mexico has had low tax compliance and lax enforcement. Between 1921 and 1988 the tax authorities brought charges against only two taxpayers for tax irregularities. The Fox administration has made tax collection one of its highest priorities, following the lead of the Zedillo administration, when there were arrests of high-profile citizens for tax evasion in 1996 and increases in audit levels. Tax revenue is expected to be 11% of GDP in 2005, a figure that tax officials say could increase to 13.7% by 2006 if the IVA is applied to medicines, food and books.

Mexico re-imposed excise tax on new vehicles in 1997. Although the tax was originally to be collected by the states, it was returned to federal jurisdiction after non-compliance by the individual states threatened effectively to eliminate the tax. The vehicles tax may be eliminated in future as a stimulus for the automotive industry. States retain their authority over taxes on real-estate acquisitions, alcoholic beverages and hotel rooms. The increased involvement of the states in revenue collection is part of an effort by the Finance Secretariat to grant increased influence to Mexico’s states and to reduce the historic fiscal primacy of Mexico City.

The government established an appeals office (Ventanilla de Justicia) in February 1996 for businesses and individuals seeking reconsideration of rulings in tax reviews and audits. Those seeking to appeal against a decision must do so within six days of that decision. The office does not adopt formal legal procedures, but it promises a fair review of the Tax Authority’s decisions (Servicio de Administración Tributaria).

Tax-bracket indexation and mandatory independent audits for medium-sized and large firms took effect in January 1991. The audit requirement for 2005 applies to all taxpayers with gross incomes exceeding Ps27.4m, assets exceeding Ps54.9m or having more than 300 employees. This requires that a special report be prepared by an independent public accountant and filed before the Mexican tax authorities. All invoices since mid-1992 have had to be printed by authorised printers, which must maintain records of printed invoices and provide this information to tax authorities. This requirement, designed to crack down on tax evasion, has provoked considerable protest and the tax authorities have indicated that companies using “tamper-proof” computerised invoicing systems may continue to issue their own invoices.

The standard rate for 2005 is 30%. Tax reforms for 2005 include a reduction in the income-tax rate of 1 percentage point per year until it reaches 28% in 2007. Income generated by branches or agencies of foreign firms is subject to the same federal tax as that of corporations. Special reduced rates are available for companies engaged in certain industries: 46.67% in 2005 and 44.83% in 2006 for companies engaged solely in agriculture, livestock, forestry and fishing. The rate for the publishing industry was reduced to 40% for 2002, with the incentive reduced by 10 percentage points per year until it is eliminated in 2006.

Taxable income and rates

Deductions
Mandatory profit-sharing payments used to be non-deductible. Beginning in 2005, 80% of the excess of profit shares over tax-exempt fringe benefits paid to employees may be deducted from taxable profits or increase carryforward losses. Starting in 2006, profit shares paid to employees may be deducted from taxable profits or may increase carryforward losses, without restrictions. Non-deductible items are provisions for employee liability and indemnity reserves. To qualify for a deduction, other expenses must be either essential to the running of the business or constitute a charitable contribution. Deductions require adequate documentation, including the tax registration number of the recipient of payment.

Under the 1997 tax amendments and starting in 1998, companies, individuals and resident foreigners must pay taxes on all earnings from companies or accounts in low-tax jurisdictions. (Under the previous tax code, companies and individuals had to declare and pay taxes only on dividends earned from companies or accounts in these areas.) Failure to report investments in tax havens can result in criminal penalties.

All types of cars may be claimed as deductions in 2005, subject to some value limits (previously, luxury cars were not deductible.) Restaurant expenses were reintroduced as 75% deductible for 2005, if the amount is paid with a credit or debit card.

Dividends are neither deductible by the corporation distributing them nor included in the gross income of the recipient (although they are included in the income base for calculating profit sharing). Company cars must be used solely for business purposes. Deductions are also available for personal retirement and savings accounts and payments for environmental-protection equipment.

Title II of the tax system aims to recognise the “real” reduction in debt that occurs as a result of inflation and the corollary decrease in the return on assets. Under the law, any excess of the inflationary reduction in debt over the amount of interest paid out is taxable as an “inflationary profit”, but any excess of the inflationary increase in the value of assets over the return on assets is tax-deductible. The system treats as interest both foreign-exchange losses and net gains from the sale of financial instruments, such as petro-bonds.

Until 1986, goods could be deducted as of the moment in which they formed part of the cost of sales. As of 1987—and the enactment of the New Basis as a result of inflation—goods could be deducted when purchased; this provision was amended the following year to enable their deduction when acquired. Thus, in terms of the cost of sales, the tax law used to allow immediate deduction of all purchases. According to the government, because inflation was rife in Mexico during these years, in such conditions, the deduction of goods when forming part of the cost of sales would have led to a lower result in real terms. As Mexico currently has single-digit inflation, the deduction of goods acquisitions is no longer justifiable. Therefore, as from January 1st 2005, the cost of goods sold, rather than the cost of acquisition, may be deducted.

Transitional rules have been established for the taxation of the 2004 inventory-ending balance (December 31st 2004), which has already been deducted under the 2004 law. Such rules establish a procedure to determine an average inventory turnover of the taxpayer for the last three fiscal years, and, depending on that, identify whether proportional taxation will need to be made within a range of four to twelve years.

Nonetheless, taxpayers must maintain inventory-control records and must include inventory in the average value of a corporation’s assets for purposes of the 1.8% minimum-asset tax. Small businesses are exempt from the asset tax for 2005. A recent decision of the Mexican Supreme Court declared unconstitutional the practice of denying the deduction of debts incurred with non-resident companies or debts incurred with or through the financial system for purposes of determining the asset taxable base. Congress has now approved an amendment allowing for such deductions.

Capital gains from the sale of real estate, machinery and equipment are included in their entirety in gross income, subject to an adjustment for inflation. Interest income is taxable when earned but is also adjusted for inflation.

Corporate taxpayers may carry losses forward against tax liabilities for ten years. Loss carryback is not available.

Loss relief
Depreciation is calculated on a straight-line basis. The tax system offers the option of a one-time, present-value deduction for newly acquired assets, with the exceptions of investments in cars, lorries, trailers, buses and airplanes. Updated rates were implemented in 2000 for assets used in railway, telecommunications, mining and electricity industries. For the railway industry, rates are stipulated for communications systems (10%), railways (5%), tanks (3%), railway wagons (6%), and other machinery and equipment (7%). Rates for telecommunications are as follows: transmission towers (5%), non-electromechanical call centres (25%), radio systems (8%), transmission equipment (10%), other equipment (10%), ground satellites (10%) and space satellites (8%).

Other rates include assets of telegraph services (16%); mining-industry assets (12%); and electricity generation, conduction, transformation and distribution assets (5%).

The annual rates for machinery and equipment vary by industry; for example, production of metals and natural coal derivatives (6%); pulp and paper manufacturing (7%); manufacture of motor vehicles and parts, metal products, machinery, and professional and scientific instruments and for the processing of beverages and food (8%); production of chemicals, petrochemicals, pharmaceuticals, and rubber and plastic items (9%); electric transport (10%); manufacture of textiles and apparel (11%); airplane construction (12%); air transport companies (16%); in restaurants (20%); and agriculture, livestock raising and fisheries (25%). Rates common to all industries exist for buildings and construction (5%), intangibles (excluding goodwill) and deferred charges (5%), and office equipment (10%).

Special rates apply to some items, such as dies and moulds, pollution-control equipment (100%), computer-manufacturing equipment (50%), equipment used to develop new products and local technology (all 35%), aircraft used for agricultural fumigation (25%), other aircraft (10%), buses (25%), electronic computing equipment (30%) and mechanised equipment for computer systems (30%).

Consolidation
Mexican law allows corporate groups to be taxed on a consolidated basis. The filing of a consolidated return has significant advantages, most notably the fact that the losses of some group companies can be offset against the profits of others. Also, dividends paid among companies of the group are not subject to any tax, notwithstanding that dividends do not originate from the UFIN (net-of-tax profit) account. For tax purposes, a consolidated group consists of the Mexican holding company and the subsidiaries in which it has effective direct or indirect ownership interests in excess of 50% of the voting shares. It is important to note that the consolidation is on a proportional basis, based on the percentage owned directly or indirectly by the controlling company. Only companies residing in Mexico can be treated as holding companies.

Consolidated tax returns must be filed beginning with the year after the authorisation from the Secretaría de Hacienda y Crédito Público (Secretariat of Finance and Public Credit, SHCP) has been granted. Once consolidation for tax purposes has been elected, it must be continued for a period of at least five years.

In order to incorporate a company into the consolidation, the ownership must exceed 50%. In previous years, the “consolidation participation” was equal to 60% of the actual ownership percentage. As from January 1st 2005, the consolidation participation is equal to the actual ownership percentage. Thus earnings or losses must be included in the consolidated tax return to the extent of the average participation held by the holding company in each of the controlled companies. This is one of the most significant changes to the consolidation procedure, as it will increase the competitiveness of the Mexican tax system.

With regard to asset tax in 2005, the holding company will determine the consolidated taxable base considering 100% of the value of the assets owned by controlled companies.

Indirect equity holdings are limited to the percentage maintained through other consolidating group companies.

Changes to consolidated taxable income or tax losses resulting from variations in equity holdings in subsidiaries or from deconsolidation of such subsidiaries, as well as cancellation of tax loss carryforwards of any deconsolidated subsidiaries, must be included using a restatement factor for inflation.

Because of the reforms introduced in 2005, taxpayers must disclose in the tax report issued by an independent public accountant the amount of income tax that has been deferred as a result of electing to file a consolidated tax return. Failure to disclose this information will result in deconsolidation of the group.

Withholding tax on dividends
Dividends paid are non-deductible in computing taxable income, and dividends received are not included in taxable income. According to Mexican legislation, there is no withholding tax on dividends. As from 2005, income tax paid by a non-resident company that distributes dividends to another non-resident company, which, in turn, distributes dividends to a Mexican corporation, may be credited against the Mexican corporation’s income-tax liability provided the following conditions are satisfied:

* The dividend and the income tax are accrued by the Mexican corporation.
* The Mexican corporation owns at least 10% of the first-tier company.
* The first-tier company owns at least 10% of the second-tier company.
* The minimum combined ownership in the second-tier company is 5%.
* The Mexican government has concluded a broad exchange of information agreement with the country where the second-tier company is resident.

Withholding tax on interest
International tax treaties, the Income Tax Law and administrative tax decisions (known as miscellaneous) govern taxes on interest. Miscellaneous are directives published by the Finance Secretariat that remain in effect until the ministry or the government changes them. Taxpayers may choose the most suitable regime but may not interchange them. Under the current Income Tax Law (2005), interest payments to foreign banks resident in tax-treaty countries are taxed at a rate of 4.9%.

Under 1997 tax amendments, interest on loans granted by related parties is considered to be a dividend if (1) the interest is non-deductible because it exceeds market rates; or (2) the interest payment arises from a back-to-back loan. The Income Tax Law defines these as loans of cash, goods or services to an intermediary, who then provides cash, goods or services to a debtor (or alternatively a loan that is secured by cash, goods, services or a deposit made by a related party or the debtor itself).

As from 2005 thin-capitalisation rules have been introduced to prevent companies from using debt as a means to distribute profits to shareholders. Interest paid on loans granted in cash by related parties in excess of three times stockholders’ equity may not be deducted. These rules are, however, not applicable to taxpayers that obtain an advanced pricing agreement from the tax authorities, or to financial institutions.

The restriction on interest deduction applies to interest on debts held by the taxpayer with non-resident independent parties provided the Mexican taxpayer has a related party. Apparently the intention of such rules is to attack back-to-back loans used by Mexican corporations. Nevertheless, it only reflects the fact that the Tax Administration Service has not been able to counteract the use of back-to-back loans with existing rules in the Mexican Income Tax Law. The interest deduction restriction might violate the non-discrimination rules in Mexico’s tax treaties. Under this scenario, the thin-capitalisation rules are not applicable to taxpayers that have obtained an advance pricing agreement that confirms that the taxpayer has obtained an arm’s-length profit, in its dealings with other related parties. The advance pricing agreement must be accompanied by a report issued by a certified public accountant, containing a transfer-pricing methodology as prescribed in the Mexican Income Tax Law.

Under a transition rule, taxpayers that determine that their debt-to-equity ratio exceeds 3:1 in 2005 will have five years from January 1st 2005 to reduce such debts proportionately in equal part in each of the five fiscal years until they reach the 3:1 ratio. If the taxpayer’s debt-to-equity ratio exceeds 3:1 at the end of this period, any interest earned on the debt exceeding the limit as of January 1st 2005 will not be deductible.

As mentioned above, interest paid on negotiable instruments to recipients abroad is subject to withholding tax of 4.9% when the receiver is a resident of a country with which Mexico has signed a tax treaty or 10% if Mexico has no such treaty. Financial leases are taxed at 21%.

Withholding tax on royalties and fees
Payments abroad for technical assistance, know-how, use of models, plans, formulae and similar technology transfer are subject to a 25% withholding tax. Royalties paid to a foreign licenser of patents, trademarks and trade names—without the rendering of technical assistance—are charged a withholding tax of 30%, except where Mexico has a tax treaty with the corresponding country.

Business enterprises that make fee or rental payments to individuals for property must withhold a 25% tax on the interest portion of the lease payments. The tax and a statement including information about the payments made must be filed with tax authorities in February of the following year.

Capital gains taxation

Corporate capital gains or losses arising from the sale of fixed assets are treated as ordinary income or losses, taxable at the normal corporate rates. In calculating the taxable gains arising from the sale of land, buildings, equity shares and other capital interests, companies may apply an official schedule of inflation adjustments to the acquisition cost of the asset. Capital gains from the sale of publicly traded shares by individuals are tax-exempt in certain circumstances.

Foreign income and tax treaties

Derived from changes to the Mexican Income Tax Law for 2005, a new presumption was added to the said Law. This presumption deems income to be Mexican-source income (unless demonstrated otherwise) when a resident in Mexico, or non-resident with a permanent establishment (PE) in Mexico, makes payments to a non-resident related party. Thus the burden of proof is shifted to the payer who is to maintain supporting documentation evidencing that the service was actually rendered outside Mexico.

Moreover, according to said changes, certain income will be deemed to be excluded from the definition of business income. The purpose of this amendment is to tax as Mexican-source income several types of income (eg technical assistance and management fees) that clearly would not be taxed under Mexico’s tax treaties because the income would be categorised as business income subject to taxation only if the non-resident has a permanent establishment in Mexico.

This amendment is part of a series of tax reforms proposed by the Executive Branch and approved by the Mexican Congress to override tax treaties. According to the Mexican constitution, treaties have a higher legal hierarchy than local legislation. In addition, Mexico is part of the Vienna Convention, which requires treaties to be interpreted on a good-faith basis. Therefore a correct interpretation of tax treaties should not result in the withholding of tax for classes of income that cannot be taxed in the source country unless the non-resident has a PE. Nevertheless, it can be expected that the Tax Administration Service will try to impose withholding tax on particular classes of income, such as management fees.

Likewise, the rules governing investments in preferential tax regimes have been amended. Currently, a “black list” of countries is used to determine whether an investment is deemed to be in a low-tax jurisdiction. In addition, if foreign-source income is not subject to tax abroad or, if it is subject to tax, the tax so imposed is less than 75% of the income tax that would result from applying the Mexican tax legislation, the investment will be deemed to be located in a low-tax jurisdiction. It is possible under the new rules that a country not typically classified as a tax haven might fall under the less-than-75% rule.

Passive income (ie dividends, interest, royalties and capital gains) derived directly or indirectly by a Mexican resident through a branch, entity or any other legal entity located in a preferential tax regime, will be subject to taxation in Mexico in the year the income is derived.

Taxpayers earning income from a preferential tax regime must file an informative return in February of each year. Failure to file the return is subject to a penalty that ranges between three months and three years’ imprisonment.

Mexico now has agreements to prevent double taxation with 29 countries and is negotiating treaties with ten others. Four additional treaties have been signed and are awaiting government ratification.

Although the details of the tax treaties differ, all are designed to promote investment by reducing taxes and providing investors with clearer guidelines on how crossborder activities will be taxed.

Transfer pricing

Planning for methods, documentation, penalties and other transfer-pricing issues is a complex undertaking. Legislation passed in December 1998 requiring maquiladoras to be taxed as Mexico-domiciled companies from 2000 was blocked by an agreement in October 1999. The accord, signed by US Treasury officials and Mexico’s finance minister, gives maquiladoras a three-year abstention (2000–02) from permanent-establishment status if companies pick one of two tax options.

The first option, the advance-pricing agreement, is a Mexican form of transfer pricing. Under the scheme, the service provided in Mexico is estimated at fair market value, and the cost of the service less expenses is taxed at the corporate rate of 30% plus an additional 5% if dividends are removed. Under the second, “safe harbour” option, taxable income is the greater of 6.9% of assets or 6.5% of operating costs.

The 1998 tax amendments established a special committee on transfer pricing: the General Office for Technical Issues and International Negotiations. Recent changes in this area were also made to adopt internationally accepted methodologies for showing that operations between subsidiaries and other related companies are conducted at arm’s length—that the price is what independent parties in similar operations would have used. Mexican tax authorities may adjust such prices if they do not reflect market prices. The Secretariat of Finance is also empowered to adjust declared income earned by selling at below-market prices or at cost or less. Damaged, obsolete or similarly affected goods will usually escape transfer-pricing adjustments if the company can show that a lower price is representative of market conditions for that item. Under 1997 amendments, companies must keep documentation of intercompany transactions.

For maquiladoras, the current tax regime includes three options:

* To determine an arm’s-length consideration for the services provided, not including in such calculation the use of assets not owned by the taxpayer, added by 1% of the net value of the assets owned by non-residents;

* The greater taxable income determined by 6.9% of assets or 6.5% of operating costs; or

* The application of the marginal transactional operational margin method to prove that revenues and deductions are arm’s length.

Turnover and other indirect taxes and duties

A value-added tax (impuesto al valor agregado—IVA) applies to both goods and services. The IVA rate was increased to 15% (from 10%) in April 1995 and remains in force. The following are exempt from IVA: land and residential buildings; books and periodicals; share transfers; used chattels; tickets and other evidence permitting participation in lotteries, raffles, games of chance and competitions of every nature, and the respective prizes thereof; national currency, foreign currency and gold and silver pieces; and alienation of goods among non-residents or by a non-resident to a Mexican entity registered in an authorised programme to promote exportation of goods. Food additives and preservatives were made subject to IVA in 2000, on the grounds that they are not used only for medicines and basic foods. Interest on non-business loans and credit-card debt is also subject to IVA.

Exports are exempt from IVA; producers of goods for export and manufacturers of machinery and equipment for agriculture and livestock are eligible for a credit or tax refund in all stages of production. Supplies for maquiladoras are also exempt when special conditions are met. Imports are not subject to IVA, when used in the manufacture of exports. In 2005 value-added tax transferred to the taxpayer and paid on imports is fully creditable if related to expenses incurred in order to acquire goods other than investments, for services or to lease of assets used exclusively to perform taxable activities to which 0% tax rate is applicable. Value-added tax paid by the taxpayer in relation to expenses incurred to acquire goods other than investments, for services or to lease of assets used exclusively to perform non-taxable activities or which are not subject to such tax, are not creditable.

Companies may credit excess IVA payments against income or other tax payments. If the excess cannot be credited in its entirety, the taxpayer may apply for a refund. The Tax Administration Service must grant certificates validating IVA credits.

Companies must settle monthly with the tax authorities, making their IVA payments for the preceding month. IVA payments to the Secretariat of Finance for instalment sales may be made when principal and interest payments are actually received, rather than when the sale is invoiced—provided half the purchase price is paid after six months (35% of the price for final consumer sales). For imports, IVA is based on customs value plus tariffs. All companies should demand that IVA payable on their purchases be separated from deductible expenses.

Sales made to a third party for export are taxed at 0% for the portion that is actually exported; 100% of IVA paid on assets that may be immediately deducted may be credited. IVA is also payable when assets are transferred to financial institutions for paying liabilities or by court order.

Other taxes

A special tax on production and services is charged to manufacturers and wholesalers of certain goods, including soft drinks, alcoholic beverages, tobacco and petrol. The tax varies by product. Changes to the tax code in early 2002 included an increase in the rate for cigarettes and soft drinks (at 20%), and the inclusion of cellular phone, beeper and pay-television service (at 10%).

Mobile homes and certain other types of vehicles are subject to additional sales taxes. The excise tax on new cars (impuesto sobre autos nuevos—ISAN) was applied at its full rate in 1999, resulting in charges of 2–17% depending on the value of the car, and a zero tax rate for low-cost, compact vehicles. Purchases of real estate are taxed at a rate that varies from state to state.

Tax compliance and administration

Corporate taxpayers must make advance income-tax payments on the 17th day of every month. (As a result of the 2002 tax changes, all taxpayers must file on the 17th day of every month. In the past, individuals and small businesses were allowed to file quarterly.) Advance payments are based on the most recent of the five preceding fiscal years in which a profit could be calculated, even if there was a loss in the immediately preceding fiscal period. All corporations must use the calendar year for financial and tax purposes.

Corporations may apply for a reduction in advance payments. Any delay in making advance payments will result in interest charges, with higher charges for unauthorised delays.

Tax returns are filed three months after the end of the tax year. The government may challenge tax returns up to five years and, in certain circumstances, up to ten years after their filing. In practice, however, the tax authorities will generally check returns for the most recent fiscal year and for the subsequent period up to the time of the examination. Additions to the tax law stipulate that authorities may audit a company’s books from the previous ten years in the following circumstances: if errors discovered in any single tax category exceed 5% of the official calculation of tax liability; if there are omissions of profit sharing; if the firm fails to register to pay taxes; or if it provides false information. Taxpayers have ten years to file amended returns when refunds are anticipated. If the refund is not made within four months of filing, it accrues interest.

From January 2005 penalty interest for late payment of taxes is assessed at 0.75% per month if an extension has been granted and at 1.5% on late payments that are not covered by an extension. Penalty rates are adjusted monthly. Penalty interest accrued from January 1st 1992 is deductible for income-tax purposes.

PERSONAL TAXATION

Taxable income and rates

Tax changes for individuals implemented in early 2005 include the lowering of the top income bracket from 33% to 30%. Individuals with income of less than Ps300,000 must pay with a bar-coded taxpayer identification card; individuals with higher incomes must pay electronically via the Internet beginning in August 2002. The tax authority, Servicio de Administración Tributaria, administers the site, www.sat.gob.mx.

Foreign business personnel who do not reside in Mexico but visit more than 183 days a year have a special tax schedule. Otherwise, Mexico offers no special concessions to foreign business personnel. Some states and the Federal District impose separate taxes on wages and salaries. The employer pays this tax in the Federal District.

Annual income tax rates of the tax burden for 2004 are provided in the table below. The employer withholds provisional tax payments. Taxpayers must file personal income tax returns for the preceding year by the end of April.

Personal income tax (impuesto sobre la renta—ISR) applies to salaried employees with investment and other income. The top rate was lowered from 33% to 30% for 2005. Fixed rates apply to salaries below the lower limit; income between the lower and upper limit is taxed at the applicable (excess) rate.

Determination of taxable income
Taxable income includes the following: remuneration for personal services, including salary, bonuses and special allowances (such as housing); benefits rents received; and interest and corporate dividends paid out of gross rather than net income. Pension benefits are tax-exempt up to nine times the legal minimum salary for the region. Severance-payment benefits are exempt up to 90 times the daily base salary of the region multiplied by the number of years employed.

For 2005 taxpayers engaged in business activities are required to file information on transactions worth more than Ps50,000 or on their 50 largest clients. However, the information must be available in the event the government requires an audit. Accounts of donations granted, payments made to Mexican banks abroad and joint-operating agreements must also be kept on record. Moreover, payments made to parties in low-tax jurisdictions must be considered non-deductible unless it can be demonstrated that they were set at market value.

Otherwise, personal deductions include the following: medical and dental fees and hospital expenses incurred by the taxpayer and by the taxpayer’s spouse or other dependants with income no higher than the annual minimum salary; charitable donations; funeral expenses not exceeding the minimum annual salary; and expenses incurred in the use of mandatory school-bus transport of the taxpayer’s dependants. Beginning in January 2003 taxpayers may also deduct health-insurance premiums. Mortgage interest payments and personal pension-account (similar to the US individual retirement arrangement, except that interest earned on the Mexican accounts is taxable at the normal rate) contributions up to Ps152,000 are also deductible through 2003.

Taxpayers whose income consists of professional fees may deduct normal, documented expenses similar to those deductible by a business. A simplified tax system for individual taxpayers that engage in business activities is available when annual income is Ps1.75m or less for 2004. Small companies must file monthly, as is the case for larger companies. The ministry has issued these reforms, known as miscellaneous, which will remain in place until overwritten.

In calculating capital gains for tax purposes, individuals increase the historical cost by a factor to adjust for inflation and reduce the cost by accumulated depreciation at a rate varying with the type of asset. The difference between the result and the selling price constitutes the net gain. Based on the number of years the asset was held, a certain proportion of the net gain is added to other taxable income to determine the top tax rate payable.

The immediately deductible proportion of a capital loss also depends on the number of years the asset was held. This proportion may be deducted from any kind of income declared for the year or from capital gains arising in the following three years. The non-deductible balance of the loss gives rise to a credit against the tax on capital gains earned that year or in the next three years. Capital gains resulting from an individual’s sale of publicly traded shares are tax-exempt in certain circumstances.

Residency

Mexican citizens and resident aliens must pay taxes on all income, regardless of its source (although this is seldom enforced for resident aliens earning foreign income). Foreign nationals residing full time in Mexico enjoy the same rights as citizens (except that they may not vote) and they incur the same responsibilities. Resident (inmigrado) status may be obtained after residing in Mexico for five years. Non-residents (foreigners with the qualified resident status of inmigrante) pay taxes only on their Mexican-source income.

Beginning in June 2001 non-resident foreigners on temporary assignment working for firms or subsidiaries based in Mexico are exempt from income tax on the first Ps125,900 of annual income; they are taxed at 15% for income of Ps125,901–1m. All income exceeding Ps1m is taxed at 30%, with no deductions allowed. Non-residents on temporary assignment paid by non-resident foreign firms are exempt from income tax. Tax rates differ under tax treaties.

Dual citizenship for Mexicans has been possible since March 1996. In principle, this obliges them to file income taxes for both countries of which they are citizens. In practice, however, this is rarely done.

Capital taxes

There are no capital taxes.

Sino-Mexican Trade

Handa — Sun Jul 16, 2006 9:58 am

Author: Handa

Posted: Sun Jul 16, 2006 9:58 am

Hi All,

We are a Sino-German sourcing company specializing in the procurement of competitive goods from China. Our services cover the whole process of sourcing, negotiations, offer settlement, quality control and shipment, thus giving you reliable access to the Chinese market

Building mutual trust is essential when it comes to global sourcing. Therefore we offer our sourcing experience free of charge, provided typical order quantity is met, and would only ask for a small fee after successful order placement with a Chinese manufacturer.

We are seeking reliable trading partners in Mexico who want to take advantage of the diversity of Chinese products.

Best regards,

Stefan Rohlfing
(stefan.rohlfing@gmail.com)

FX Currency Trading / Forex FX Trading Online - Know More

admin — Thu Feb 09, 2006 1:46 pm

Author: admin

Posted: Thu Feb 09, 2006 1:46 pm

Forex Trading – FX Trading

FX Currency Trading / Forex FX Trading Online - Know More

Foreign Exchange
This short introduction explains the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading Forex online. There are also two scenarios describing the implications of trading in a bear as well as bull market to better acquaint you with some of the risks and opportunities in the largest and most liquid market in the world.

As an additional aid for those who are new to Forex, there is also a glossary at the bottom of this text which explains some of the terms used in connection with currency trading.

Overview
Foreign exchange , forex or just Forex are all terms used to describe the trading of the world's many currencies. The forex market is the largest market in the world, with trades amounting to more than $1.5 trillion every day. This is more than one hundred times the daily trading on the NYSE (New York Stock Exchange) . Most forex trading is speculative , with only a few percent of market activity representing governments' and companies' fundamental currency conversion needs.

Unlike trading on the stock market, the forex market is not carried out by a central exchange, but on the "interbank" market , which is thought of as an OTC (over the counter ) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the forex market is a 24-hour market.

Trading Forex
A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the Euro/US Dollar, or the GB Pound/Japanese Yen.). The most commonly traded currencies are the so-called "majors" - EURUSD, USDJPY, USDCHF and GBPUSD.

The most important forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled "immediately" or on the spot. In practice this means within two banking days.

Trading on Margin
Trading on margin means that you can buy and sell assets that represent more value than the capital in your account. Forex trading is usually done with relatively little margin since currency exchange rate fluctuations tend to be less than one or two percent on any given day. To take an example, a margin of 2.0% means you can trade up to $500,000 even though you only have $10,000 in your account. In terms of leverage this corresponds to 50:1, because 50 times $10,000 is $500,000, or put another way, $10,000 is 2.0% of $500.000. Using this much leverage gives you the possibility to make profits very quickly, but there is also a greater risk of incurring large losses and even being completely wiped out. Therefore, it is inadvisable to maximise your leveraging as the risks can be very high. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.

Why trade Forex?

24 hour trading
One of the major advantages of trading forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). This gives you a unique opportunity to react instantly to breaking news that is affecting the markets.
Superior liquidity
The forex market is so liquid that there are always buyers and sellers to trade with. The liquidity of this market, especially that of the major currencies, helps ensure price stability and low spreads . The liquidity comes mainly from large and smaller banks that provide liquidity to investors, companies, institutions and other currency market players.
No commissions
The fact that forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis. Trading the "majors" is also cheaper than trading other crosss because of the high level of liquidity. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.
50:1 Leverage
With a minimum account of USD 10,000, for example, you can trade up to USD 500,000. The USD 10,000 is posted on margin as a guarantee for the future performance of your position.
Profit potential in falling markets
Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. If the EURUSD declines, for example, it is because the U.S. dollar gets stronger against the Euro and vice versa. So, if you think the EURUSD will decline (that is, that the Euro will weaken versus the dollar), you would sell EUR now and then later you buy Euro back at a lower price and take your profits. The opposite trading scenario would occur if the EURUSD appreciates .

Important Forex Trading Terms

Spread
The spread is the difference between the price that you can sell currency at ( Bid ) and the price you can buy currency at ( Ask ). The spread on majors is usually 5 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.
Pips
A pip is the smallest unit by which a cross price quote changes. When trading forex you will often hear that there is a 5-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9880. The difference is USD 0.0005, which is equal to 5 "pips". On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is the cancel-out the four zeros on the amount you trade and you will have one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.

Trading Scenario - Trading Rising Prices
If you believe that the Euro will strengthen against the dollar you'll want to buy Euro now and sell it back later at a higher price.

You buy Euro	We quote EURUSD at Bid 0.9875 and Ask 0.9880, which means that you can sell 1 Euro for 0.9875 USD or buy 1 Euro for 0.9880 USD. In this example you buy Euro 100,000, at the quote price of 0.9880 (ask price) per Euro.
The market turns	Later the market turns in favour of the Euro and the EURUSD is now quoted at Bid 0.9894 and Ask 0.9899.
Now you want to sell your Euro and get the profit	You sell Euro at a Bid price of 0.9894.
The profit is calculated as follows:	Sell price-buy price x size of trade (0.9894 minus 0.9880) multiplied by 100.000 = $140 Profit (Note that the profit or loss is always expressed in the secondary currency )

Trading Scenario - Trading Falling Prices
If, on the other hand, you believe that the Euro will weaken against the dollar, you'll want to sell EURUSD.

You sell Euro	We quote EURUSD at a Bid price of 0.9875 and Ask price of 0.9880 and you decide to sellEuro 100,000 at a Bid price of 0.9875.
The market moves in your favour	The Euro weakens against the dollar and the EURUSD is now quoted at bid 0.9744 and ask 0.9749.
Now you buy back your Euro	You buy EUR at an ask price of 0.9749.
Your Profit/loss is then	Sell price-buy price x size of trade (0.9875 minus 0.9749) multiplied by 100.000 = $ 1260 Profit

Remember that trading EUR 100,000 as we have done in our examples, does not mean that you have to put up Euro 100,000 yourself. It means that you have to deposit 2.0% of Euro 100,000, which is Euro 2,000 on margin as a guarantee for the future performance of your position.

Further Reading
To see how you can trade the forex market and benefit from our toolbox of information and live quotes, please proceed to our Forex Quick Start found under the Trading menu on the toolbar, under Forex.

Glossary

Appreciation	Anincrease in the value of a currency.
Ask	Theprice at which you can buy. Traders also speak of an ask price,the price requested. This usually indicates the lowest price aseller will accept.
Basecurrency	Thecurrency that the investor buys or sells (i.e. EUR in EURUSD).
Bear	Someonewho believes prices are heading down. A bear market is one inwhich there is a sustained fall in prices and which does not looklike it will recover quickly.
Bid	Theprice at which you can sell. Traders also speak of a bid price,the price offered. This usually indicates the top price apurchaser will pay.
Bid/Ask	TheBid rate is the rate at which you sell. The Ask (or offer) rate isthe rate at which you can buy.
Bull	Someonewho is optimistic about the market. A bull market is characterisedby enthusiastic and sustained buying.
cross	Whentrading currencies, the investor buys one currency againstanother. These two currencies form the cross: for example, EURUSD.
Crossrate	Anexchange rate that is calculated from two other exchange rates.
Depreciation/decline	Afall in the value of a currency.
Exchangerate	Whatone currency is worth in terms of another, for example the $Amight be worth 58 US cents or 70 yen. Currencies traded freely onforeign-exchange markets have a spot rate (applying to tradessettled 'spot', ie, two working days hence) and a forward rate.Countries can determine their exchange rates in a variety of ways:a floating exchange rate system where the currency finds its ownlevel in the market; a crawling or flexible peg system which is acombination of an officially fixed rate and frequent smalladjustments which in theory work against a build-up of speculationabout a revaluation or devaluation; a fixed exchange-rate systemwhere the value of the currency is set by the government and/orthe central bank.
EURUSD	Meansthat you trade EUR against dollars. If you buy Euro you pay indollars and if you sell Euro you receive dollars.
FX,Forex, Foreign Exchange	Allnames for the transaction of one currency for another, e.g. youbuy £100.00 with $150.25 or sell $150.25 for £100.00.
Interbank	Short-term(often overnight) borrowing and lending between banks, as distinctfrom banks' business with their corporate clients or otherfinancial institutions.
Interestrate differential	Theyield spread between two otherwise comparable debt instrumentsdenominated in different currencies.
Leverage(gearing)	Inthis case leverage means that the investor only funds part of theamount traded.
Long	Tobuy.
Longposition	Aposition that increases its value if market prices increase.
Liquid(-ity)	Thecapacity to be converted easily and with minimum loss into cash.Ultra-short-dated treasury notes are an example of a liquidinvestment. A liquid market is one in which there is enoughactivity to satisfy both buyers and sellers.
Margin	Theinitial amount or deposit required when entering into a position.Margin is a guarantee for future performance.
NYSE	Acomputerised system providing brokers with the prices of sharesand securities traded on the New York stock exchange and over thecounter. The quotes are published in real-time.
Openposition	Aposition in a currency that has not yet been offset. For example,if you have bought 100,000 USDJPY, you have an open position inUSDJPY until you offset it by selling 100,000 USDJPY.
"Overthe counter"	Whentrading takes place directly between two parties, rather than onan exchange.
Pips	Apip is the smallest unit by which a cross price quote changes. Soif EURUSD bid is now quoted at 0.9767 and it moves up 2 pips, itwill now be quoted at 0.9769.
Position	Money-market,futures, foreign-exchange and sharemarket traders talk of 'takinga position' which simply means buying or selling one currencycross. 'Position' can also refer to a trader'scash/securities/currencies balance, whether he or she is short ofcash, has money to lend, is overbought or oversold in a currency,etc.
Risk	Tryingto control outcomes to a known or predictable range of gains orlosses. Risk management involves a set of steps which begin with asound understanding of one's business and the exposures or risksthat have to be covered to protect the value of that business.Then an assessment should be made of the types of variables thatcan affect the business and how best to protect against unwelcomeoutcomes. Consideration must also be given to the preferred riskprofile - whether one is risk- averse or fairly aggressive inapproach. This also involves deciding which instruments to use tomanage risk, and whether a natural hedge exists that can be used.Once undertaken, a risk-management strategy should be continuallyassessed for effectiveness and cost.
Secondarycurrency (variable currency or counter currency)	Thecurrency that the investor trades the base currency against (i.e.USD in EURUSD).
Shortposition	Aposition that benefits from a decline in market prices.
Short	Tosell.
Speculative	Buyingand selling in the hope of making a profit, rather than doing sofor some fundamental business-related need.
Spot	ASpot rate is the current market price of an asset.
Spotmarket	Thepart of the market calling for spot settlement of transactions.The precise meaning of 'spot' will depend on local custom for acommodity, security or currency. In the UK, US and Australianforeign-exchange markets, 'spot' means delivery two working dayshence.
Spread	Thedifference between the bid and the ask rate.

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Financial Services, Planners, Offshore Banking - Know More

admin — Thu Feb 09, 2006 1:35 pm

Author: admin

Posted: Thu Feb 09, 2006 1:35 pm

Financial Services, Planners, Offshore Banking - Know More

Dear members & guests

Due to the continuous marketing approach of our expatriate community by mutiple financial planners services company, Allo' Expat has decided to provided you with some usefull imformation on the Expat Offshore Banking issue. Hope you'll invest wisely..... in the future

Financial Advisors - who are they?

Q1 - How do I get the best offshore financial advice?

The best offshore financial advice is probably given by Independent Financial Advisors. Independent financial advisors (or IFA's, as they are sometimes called) advise their clients on savings, investments and pensions. They may also provide Savings Plans for offshore investing to their clients.

When counselling a client, the best offshore financial advisors should complete the following steps:

* Step 1 - collect detailed information about a client's financial circumstances and requirements � be they for retirement planning, retirement income, expat investment, or another purpose.

* Step 2 - check all the offshore tax havens for the best offshore plans.

* Step 3 - provide impartial advice as to which plan(s) best meet their client's needs (in the form of a written report).

* Step 4 - arrange for a client to buy the chosen offshore plan(s) on the best terms available.

You may want to complete your own research to ensure you know the right questions to ask your advisor.

When all these stages are completed, you can be confident you have received the best offshore financial advice.

Q2 - What is a Certified Financial Advisor?

Financial advisors may need a license to practice, issued by the Financial Services Regulator in their Country. Only these advisors may be called 'Certified Financial Advisors'.

It may be a condition that prospective certified financial advisors show their Regulator that they are:

* competent to advise

* impartial in their advice

* independent of Providers

* covered by professional indemnity insurance.

So it is important to check that your financial advisor is listed under:

* Certified Financial Advisors, licensed to advise in the Country where you live and

* Independent Financial Advisors - advising on a wide range of offshore plans from a full list of providers.

Now you should feel confident you are receiving the best offshore financial advice.

Q3 - How are offshore financial advisors paid?

Independent financial advisors (IFA's) earn their living from commissions they receive from plan providers. This is their income for the offshore financial advice they give.

The commission that advisors (IFAs) receive from offshore financial advice cases may range from hundreds to thousands of dollars.

Good offshore financial advisors should not be influenced by the amount of commission they receive.

Some clients prefer to pay fees to their financial advisors for advice to ensure impartiality. When this occurs offshore financial advisors refund commission received from a plan provider either in cash or as an increased allocation of contributions invested.

Q4 -How do I find a list of Independent Financial Advisors (IFAs)?

Search the web! Try searching using the search words independent financial advisors or certified financial advisors PLUS the name of the Country in which you live.

Personal recommendations are always helpful - ask your friends if they would recommend their offshore financial advisors. Always check that a recommended advisor is both certified and independent.

Offshore Investing - What do that mean

Q1 - What is Offshore Investing or Offshore Investment?

When we talk about Offshore investing plan opportunities it is like the savings plans available in many countries, except these plans:

* Are registered in tax havens and are regulated by their Financial Services Authorities.

* Can be used for investing by non-residents of the tax havens.

* Are sometimes more tax efficient than or have other advantages over domestic savings plans.

Q2 - Why would expatriates choose offshore investing?

Expatriate investment in the savings plans catalogued here and offering offshore investing opprotunities might be appropriate when:

* No local or Home Country tax free regular savings plans are available.

* No local or Home Country tax free lump sum investment plans are available.

* An expatriate is planning to retire to a third country.

If you fit any of these categories of expatriates you should investigate the offshore plans researched by Offshore Boffin and consult your Financial Advisor.

Q3 - Are there other people who might benefit from Offshore Invesment?

Yes. People who are not living abroad might find offshore investment attractive in the following circumstances:

* They have more cash available for savings than can be invested tax free in their resident countries' investment plans (perhaps because the amount they can invest each year is capped).

* They may live in countries which do not have domestic tax free savings plans.

* They live in countries which are not suitable long-term investment environments for political or economic reasons.

* They wish to limit the effects of inheritance tac on their estates.

Q4 - Is there safe offshore investing?

The answer is that All investors should remember that the value of ALL their investments can go down as well as up!

Safe offshore investing is more likely by choosing plans:

* From politically stable tax havens - the quality of tax havens varies.

* From well-regulated tax havens - the tax havens whose savings plans are catalogued here all regulate their financial services companies to avoid 'fly-by-night' companies.

* From reputable investment management and life assurance companies - whilst past performance is not always a guide to the future, the companies whose savings plans are listed here are all well-known names.

* Investing in 'mutual' or 'collective' funds. these funds are based on a simple idea. If a large number of investors pool their savings in - for example - an equity fund, the larger fund can be invested in shares in many companies, spreading each individual's risk.

For expat investment - and others - to be successful the best offshore investment opportunities must be found. For that you'll need a good Financial Advisors.