If you’re living in Mexico, chances are you’ve already mastered where to get the best tacos, how to survive the traffic, and maybe even how to roll your R’s. But there’s one thing most expats never learn about — Mexico’s hidden tax advantages for investors.
The Mexican tax system actually rewards people who save and invest long-term. The catch is, almost no one explains how it works in plain English. Beneath the bureaucratic layers of the Ley del Impuesto Sobre la Renta (ISR, Mexico’s income tax law), there are three articles — 93, 151 and 185 — that can help you legally keep more of your money.
Think of them as three different “investment codes.” Depending on your goals and tax status, one may suit you better than the others. Let’s unpack what they mean, how they compare, and why expats should pay attention.
Understanding Mexico’s Hidden Tax Opportunities
Most foreigners living in Mexico invest the hard way: they keep money in the U.S., pay taxes twice, or just let it sit in a bank account losing value to inflation. What they don’t realize is that Mexico offers structured plans — usually through insurance companies like Allianz — that qualify for special tax treatment under these three articles.
Here’s the big picture:
- Article 93 rewards long-term investments by making them tax-free when you withdraw.
- Article 151 gives you an annual deduction today for saving for retirement (age 65+).
- Article 185 lets you defer taxes on short- or mid-term savings.
Each one is legal, regulated, and can be used by residents or expats with proper guidance.
Article 93 — Tax-Free Growth, Like a Roth IRA
If you’re from the U.S., think of Article 93 as Mexico’s version of a Roth IRA — your investment grows tax-free and withdrawals can be completely exempt later on.
During the investment period, your returns are tax-deferred — meaning you don’t pay ISR as your money grows so it compounds faster. And when you meet the conditions below, your gains are fully exempt.
Under Article 93, your investment earnings are exempt from income tax (ISR) if you meet two simple conditions:
- You keep the investment for at least five years, and
- You’re at least 60 years old when you withdraw.
That’s it. No hidden clauses, no impossible requirements.
Imagine investing USD 50,000 in plans like OptiMaxx from Allianz, letting it grow for 15 years, and withdrawing at 60 without paying a single peso of income tax in Mexico. That’s exactly how Article 93 works.
This structure is ideal for expats who:
- Spend most of their time (and money) in Mexico but still earn abroad,
- Don’t file taxes here as residents, and
- Want their investments to grow quietly without complex filings.
In short: you’re not deducting anything today, but you’re earning tax-free for tomorrow — a perfect fit for long-term, tax-efficient planning.
Article 151 — The Mexican 401(k)
Now, if you do work in Mexico, file taxes, or have an RFC, then Article 151 might be your best ally.
This article allows you to deduct your contributions to a Plan Personal de Retiro (PPR) from your taxable income each year. It’s the closest equivalent to a 401(k).
You can deduct up to 10 % of your annual income or 5 UMAs (whichever is lower) — around MXN $206,000 in 2025.
So, if you earn MXN $2 million per year, you can deduct roughly MXN $200,000 in contributions. Depending on your tax bracket, that could mean saving more than MXN $60,000 in taxes every year — while your investment continues to grow.
Like Article 93, these funds are tax-free when you withdraw — as long as you wait until age 65.
If you withdraw earlier, the earnings become subject to ISR (income tax).
The logic is simple: reduce your taxable income now, and withdraw tax-free after 65.
If you’re a working resident or have a Mexican business, this is the go-to strategy to build retirement wealth with government support.
Article 185 — The Traditional IRA of Mexico
Finally, Article 185 creates what’s called a Cuenta Especial para el Ahorro (CEA) — a Special Savings Account. Think of it as Mexico’s version of a Traditional IRA: you can deduct your contributions now, defer taxes, and pay them when you withdraw.
You can contribute up to MXN $152,000 per year, and those contributions are fully deductible from your taxable income. The key difference is that, unlike Article 93, withdrawals will always be taxed later.
This article is great for:
- High-income earners who already hit their Article 151 limit,
- People who want short- or mid-term tax deferral (not necessarily retirement),
- Those who prefer flexibility over long-term lock-ins.
In other words, the government “loans” you part of your taxes today, letting you invest that money for growth. When you eventually take it out, you pay back what’s due — but by then, your capital has already worked for you.
Comparing Articles 93, 151, and 185
Here’s how they stack up side by side:
| Feature | Article 93 | Article 151 | Article 185 |
|---|---|---|---|
| Type | Deferred + Tax-exempt | Deductible + Tax-exempt | Deferred-tax investment |
| U.S. Equivalent | Roth IRA | 401(k) | Traditional IRA |
| Annual Limit | None | 10 % of income or 5 UMAs | MXN $152,000 |
| Taxation | Tax-deferred while invested; Tax-exempt on withdrawal if held ≥5 years and age ≥60 | Tax-deductible while invested; Tax-exempt on withdrawal if held after age ≥65 | Deduct and defer now, always taxed upon withdrawal |
| Best for | Long-term expats | Working residents | High-income professionals |
Each one serves a purpose. Many investors even combine them — one for long-term retirement, another for annual deductions, and another for short-term liquidity.
Which Option Fits You Best?
Here’s a quick guide:
- You earn abroad but live and spend in Mexico: Article 93 is your friend. It focuses on tax exemption, not deduction.
- You work or bill clients in Mexico and pay ISR: Article 151 will lower your taxable income right now.
- You’re a high earner who already maxed out 151: Article 185 lets you keep saving with extra tax relief.
The beauty is, all three can coexist. For example, one policy can qualify under Article 151 while another under Article 93, giving you both short-term deductions and long-term tax-free growth.
Example: How a 45-Year-Old Expat Can Grow Tax-Free
Let’s say John, a 45-year-old expat from California, lives full-time in Mexico. He earns in the U.S. but spends here, and he doesn’t have Mexican taxable income. That means Articles 151 and 185 don’t really apply to him — but Article 93 does.
John invests USD 50,000 in a plan compliant with Article 93, diversified across CETES (Mexican government bonds), the S&P 500, Nasdaq, and gold ETFs.
Here’s what happens:
- His investment grows tax-deferred every year — no ISR, no capital-gains tax.
- After 15 years, he turns 60.
- He withdraws his funds.
Result: All gains are 100 % tax-free in Mexico.
If the investment grew at an average of 7 % annually, John could have nearly USD 138,000 — without paying a single peso of income tax locally.
That’s the magic of using the system as it was designed — legally, efficiently, and with patience.
How to Get Started (Even If You’re New to Mexican Tax Law)
You don’t have to become a tax expert to take advantage of these rules. What matters is choosing regulated financial instruments that specifically reference the corresponding ISR article in their policy documents.
Most plans that qualify are offered through established insurers like Allianz, and they’re backed by the National Insurance & Bonding Commission (CNSF).
A good advisor can help you:
- Determine your eligibility under each article,
- Select the right plan for your residency and goals, and
- Handle the paperwork so you stay compliant.
At Donna, we specialize in helping expats make sense of this. We translate legal jargon into practical strategies — so you can enjoy Mexico’s financial advantages without headaches or surprises.
Final Thoughts
Mexico isn’t just a great place to live — it can also be a smart place to grow your wealth. The country’s tax code quietly rewards patience, structure, and long-term thinking.
Whether you’re here for five years or for life, understanding Articles 93, 151, and 185 can turn your savings into something much more powerful: financial independence with legal tax efficiency.
Because at the end of the day, the goal isn’t just to make money — it’s to keep more of it.
Ready to make your money work smarter? Text us on WhatsApp or fill out this form to start your personalized investment strategy today.
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