Investing in Mexico Corporation

Foreign Investment in Mexico

Is it "Let's get the gringo" time?

The above is sometimes true. Understandably, in a nation whose millions of poor people see gringos as having enormous wealth as compared to their meager existence. The result is often a two tier pricing policy, one for gringos and one for Mexicanos. Savy U.S. residents in Mexico will often have a trusted house servant or employee do the bulk of the shopping to avoid discriminatory pricing. Price comparing for major purchases can eliminate the gringo gouge, the ripping off of gringos is not the national pastime (soccer is) and so getting bids can prevent overpricing. I certainly don't wish to infer that most Mexicanos overcharge gringos - that is not the case, but the practice is prevalent enough for the anglo buyer to be aware.

If you are ripped off there is a consumer protection agency called PROFECO, The Federal Consumer Protection Agency, with offices in all major cities. In the cases I have seen, the agency is fair and disregards nationality when rendering decisions. The Mexicanos who do the most ripping off, in my experience, are: lawyers, contractors and mechanics, in that order. Not much different than stateside consumer abuser lists. The important attribute about PROFECO is that they have the power to order the service or product provider to return moneys, or complete what was promised.

Many instances of "gringos getting screwed" doing business in Mexico results not from a purposeful intent to do so but because of a difference in cultural perceptions. Talk to any long time ex patriate in Mexico and they will agree that trying to "make sense" out of Mexico or Mexicanos is a fruitless task. The country and her people are full of paradoxes. If you approach understanding this country using rational thought processes Mexico will only confuse you. Let me illustrate with a real life example:

My clients, a married couple, spent $50,000 to buy a lot and then another 150 thousand to build a home in a hillside subdivision in which all of the lots have gorgeous ocean views. Those ocean views are "protected" by convenants, conditions and restrictions (C.C. & R'S) that each lot owner agrees to when purchasing property at the subdivision. Prior to building, each lot owner is obligated to submit construction plans to the DESIGN COMMITTEE of the homeowner's association for approval - One of the major responsibilities of that committee is to protect those expensive ocean views from neighbor's building a home that blocks the vista.

My clients were concerned that construction on the adjoining property could hamper their ocean view but were assured this would not happen by the President of the DESIGN COMMITTEE; that the only construction plan acceptable would require the owners to locate the structure on the lower grade level of this sloping hillside property. My clients had just gotten comfortable in their new home when their neighbors went before the DESIGN COMMITTEE with a building plan that obliterated their primary view of the ocean; allowing only two telescopic views on either side of the structure. The DESIGN COMMITTEE properly rejected the building plan, however, the neighbor's Architect, requested a building permit from the city and received it.

I assured my client -NOT TO WORRY. When the subdivision was approved by the city planning department the C.C. and R.'s were published and legally approved by the city agreeing to the non issuance of building permits without the subdivision's DESIGN COMMITTEE approval. The planning department, under several different department heads over the years, had always respected the DESIGN COMMITTEE'S rights of prior approval before granting a building permit.

Representing my client I asked for a meeting with the Planning Department Director and was told to present my case in writing. I did so and was told by the Planning Department Director that nothing could be done about it and that the matter was closed; he would not rescind the building permit. I then proceeded to the City Attorney's office. When presented with copies of the official publication of the C.C. & R.'s and the subdivision agreement with the city he agreed that the city erred in issuing the permit and that he would personally discuss the matter with the planning department director.

After repeated unanswered phone calls to the City Attorney I went to his office and waited until he agreed to see me. He explained that he could not convince the Planning Department Director to change his decision and suggested we file a law suit against the city and that surely the outcome of that suit would be in our favor.
In my best Oakland Spanish I said to the City Attorney "Say What?"
"Now let me get this straight. You the city attorney is recommending we sue the city and you know you will be losing the case?" His answer was in the affirmative.

Now by U.S. standards this solution to the problem would not be acceptable but in Mexico it is. His good relationship with the planning department head, the city attorney explained to me, was important to him and defending a law suit for the city that he would lose was preferable to battling with the planning director.

This story above has an unfortunate bottom line - my clients are going to pay a minimum of $8,000.00 in legal fees to obtain their rights from a system that acknowledges their rights but wont protect them.

If you try, when doing business in Mexico or investing here, to apply gringo logic to everything you will go crazy or broke or both. If you approach understanding this country using a rational (scientific method) thought process Mexico will only confuse you more. To understand and assimilate into the culture you must give up logic as we know it in the States. In order to understand Mexico and Mexicanos you have to stop trying to understand - the enigmas and contradictions are too great. Only a holistic, experiential, non analytical approach to Mexico and Mexicanos will work but the rewards are fantastic.

My clients have good reason to be pissed at Mexico but they will tell you in a heartbeat they would not live anywhere else - Gringos becoming Mexicanos? Could be.