IGNORING U.S. INCOME TAX RULES ON OWNERSHIP OF MEXICAN PROPERTY THROUGH FIDEICOMISOS OR MEXICAN CORPORATIONS CAN COST THOUSANDS OF DOLLARS IN PENALTIES!

(Your clients prob­a­bly do not know about this rule, but should)

There are three seri­ous poten­tial IRS tax prob­lems which may cause you or your Amer­i­can real estate and busi­ness investors in Mex­ico to pay tens of thou­sands of dol­lars in penal­ties. Each of these prob­lems areas is briefly out­lined below and be imme­di­ately com­mu­ni­cated to your clients or and future buy­ers and sellers..

For­eign Cor­po­ra­tions: Though the rules are com­plex, gen­er­ally if a US per­son (Cit­i­zen or per­ma­nent res­i­dent) owns ten per­cent or more of a Mex­i­can cor­po­ra­tion, they are required to filed Form 5471 with their per­sonal U.S.

tax return each year. Though this form usu­ally has no tax effect, fail­ure to file this form on a timely basis results in a $10,000 penalty for fail­ure this return in time or never fil­ing the return. This penalty may only be abated for rea­son­able cause which is not clearly defined. There is another form which must be filed when assets are trans­ferred to a for­eign cor­po­ra­tion.

It is also impor­tant to chose the proper type of Mex­i­can cor­po­ra­tion to own your real estate of Mex­i­can busi­ness. The type of Mex­i­can cor­po­ra­tion most com­monly used can result in dou­ble tax­a­tion of all income on your US tax return and the inabil­ity to pay the lower US cap­i­tal gains tax and take for­eign tax cred­its for the taxes paid in Mex­ico when the real prop­erty owned by the cor­po­ra­tion is sold. If the cor­rect Mex­i­can entity is uti­lized using the U.S. “check the box” reg­u­la­tions it is pos­si­ble to take advan­tage of the cor­po­ra­tions losses on your U.S. indi­vid­ual tax return, and take for­eign tax cred­its on Mex­i­can taxes paid by the corporation.

Fide­icomisos (For­eign Trust): If you own your Mex­i­can real estate through a fide­icomiso (as required by Mex­i­can law) and are a U.S. cit­i­zen you are required to file Form 3520 and 3520A each year. If you fail to file form 3520 in a timely man­ner there is a late fil­ing penalty of 35% of the value of the assets in the trust. If you fail to file 3520A in a timely man­ner
there is a penalty of 5% of the value of the assets in trust.

Form 3520A is is due on March 15th fol­low­ing the end of each cal­en­dar year.
It can be extended, but the exten­sion request must be filed by the orig­i­nal
due date. Form 3520 is attached to your per­sonal tax return.

For­eign Bank and Finan­cial Accounts: Form TDF 90.22.1 must be filed
sep­a­rately from your tax return with the U.S. Trea­sury for each year you have more than $10,000 in one or more for­eign bank accounts, stock accounts or other finan­cial accounts. On this form you report the name of the finan­cial insti­tu­tion, account num­ber, co-owners, and range of bal­ances held in the account dur­ing the cal­en­dar year. This return is due June 30th, fol­low­ing the end of the cal­en­dar year. It is not filed with your tax return severe civil and crim­i­nal penal­ties can be assessed if you fail to file this form.

By MOLLY GLENTZER
Copy­right 2007 Hous­ton Chronicle

PUNTA MITA, MEXICO — It’s hard to say exactly when Punta Mita charmed me in spite of myself.

Maybe when I took that first sun­rise walk on an empty, pris­tine white beach. I picked up a free sou­venir: a speck­led blue spiny lob­ster shell. I climbed to the top of a huge rock and did a few sun salu­ta­tions. There were rose petals blow­ing around, the remains of a roman­tic din­ner the Four Sea­sons Resort had staged for some of its guests the night before.

Or maybe I was hooked that after­noon on another quiet beach, one with harder-packed, also pris­tine sand that was eas­ier to walk on, when I spied a great blue heron perched on a rock out in the surf.

Or maybe it was the moment Fer­nando handed me a beer in a tall plas­tic cup.

I sat with friends on the prow of a sail­boat for hire. We felt like mod­els in a Nau­tica ad — hair blow­ing, soak­ing up the spray and the sun and let­ting our psy­ches rock with the boat as it crested big waves. And Fer­nando, a tan, thin, good-looking teenager with bleached blond hair, was chat­ting me up in bro­ken Eng­lish. I was think­ing that he prob­a­bly picks up a lot of busi­ness out here for later, after the boat docks.

You may like to play golf, or you may love loung­ing beside a pool in a trop­i­cal envi­ron­ment. But, ulti­mately, it’s the lure of its wild water that makes Punta Mita special.

About 45 min­utes north of Puerto Val­larta in the state of Nayarit, it occu­pies the end of a foot-shaped penin­sula cradling Ban­deras Bay, with its sole (and soul) mas­saged by the Pacific. The 9 miles of shore­line here are nat­u­rally “scal­loped” into coves and inlets, giv­ing the beaches an inti­mate scale.

Scrubbed and designed for U.S. vaca­tion­ers, the 1,500-acre devel­op­ment is a project of Dine, the real estate sub­sidiary of the Mex­i­can con­glom­er­ate DESC. (It’s not to be con­fused with the more acces­si­ble nearby town of Punta de Mita.)

Punta Mita is rel­a­tively undis­cov­ered for a good rea­son: Impos­ing gates mon­i­tor access to each of the dozen or so resort com­mu­ni­ties within the main entry.

The hum of con­struc­tion is con­stant. New vil­las and con­dos — which account for most of the lodg­ing choices — are com­ing on line fast. While this build­ing boom may not please every­one, the devel­op­ers do not plan to line the beaches with hotels.

The still-growing Four Sea­sons Resort Punta Mita is the only viable hotel choice for now. Open about six years, it’s a jewel in the chain, with four gourmet restau­rants, three beau­ti­ful pool com­plexes, a small spa and a Jack Nicklaus-designed golf course.

It’s almost a shame you have to retire to an indoor room at night, given the styl­ish pool­side cabanas that sur­round the adults-only pool area. They’re out­fit­ted with plasma-screen TVs, state-of-the-art sound sys­tems, wire­less Inter­net ser­vice and plush fur­ni­ture. Cham­pagne and caviar are served at the bars out­side early each evening.

You know a place has arrived when the fash­ion world moves in. Punta Mita will get an added shot of glam­our in June when Michelle Smith, the designer behind the upscale Milly line, unveils her Punta Mita Col­lec­tion of chic dresses, swimwear, beach bags and sports­wear at the Four Seasons.

A St. Regis resort with another Nicklaus-designed course is due to open in Decem­ber — although when I vis­ited in Feb­ru­ary, get­ting a beat on the lay­out required some imag­i­na­tion. The site con­sisted of strate­gi­cally piled mounds of dirt, with a cou­ple of concrete-block-construction offices.

I stayed at Las Pal­mas de Punta Mita, in one of 28 just-completed lux­ury vil­las along the Four Sea­sons’ golf course. I enjoyed the indoor-outdoor bath, the sunny entry atrium and the gourmet kitchen but grav­i­tated to the ter­race and its plunge pool. It over­looked the fourth fair­way, with a view of the Pacific and the golf course’s famous “Tail of the Whale” green, which is perched dra­mat­i­cally on a small, rocky island. (Dur­ing high tide, play­ers access it by amphibi­ous vehicle.)

Punta Mita Res­i­den­tial Concierge ser­vices can stock the fridge or send in a per­sonal chef or a masseuse. Cheer­ful maids seemed to hover — each day, they sculpted the plush tow­els into ani­mal shapes and laid them out with fresh bougainvil­lea blossoms.If you’d rather ven­ture out to eat, sev­eral Res­i­dents Beach Clubs on the penin­sula offer excel­lent water­front meals, includ­ing delec­table shrimp que­sadil­las, huge ham­burg­ers and drinks.

You wouldn’t know you were in Mex­ico if the friendly peo­ple didn’t speak Eng­lish with charm­ing accents.

The excep­tion is the small vil­lage where, accord­ing to our guides, Dine gave land to squat­ters who were liv­ing on the government-owned penin­sula when devel­op­ment began. Aside from a few scruffy beach­front bars and restau­rants, there’s not much else for vis­i­tors there.

But nat­ural won­ders aren’t hard to find, and out­door activ­i­ties are plentiful.

Walks along the beach turned up plen­ti­ful birds, the tracks of sand crabs and prints left by some kind of large cat — per­haps an ocelot. We also watched as a washed-up spot­ted box­fish became din­ner for a black vul­ture. One night, a small fox darted across the road.

On the sail­boat ride toward the nearby Mari­etas Islands, a sanc­tu­ary for marine life and birds that draws scuba divers and snorkel­ers, time-warp music blared over the boat’s speak­ers: The Beach Boys’ Good Vibra­tions, Simon and Garfunkel’s Sounds of Silence. We were look­ing for hump­back whales, which visit in the winter.

It might have been the music’s weird influ­ence, but I became giddy when we spot­ted hump­backs breach­ing in the dis­tance — even though from our van­tage point, with­out binoc­u­lars, I could see only water­spouts and poorly out­lined tails.

Surfers have sev­eral good spots to catch the waves around Punta Mita. Sea kayak­ing, swim­ming with the dol­phins, jeep safaris and canopy tours along zip lines in the Sierra Madre also beckon. There are plenty of things to keep vaca­tion­ers busy for a week.

Or not. If relax­ation is your goal, you can lose track of time here, bliss­fully, in a weekend.

By PEGGY GRODINSKY
Copy­right 2007 Hous­ton Chronicle

The Mari­eta Islands, a craggy, wild, grasss­wept national park off Punta Mita on Mexico’s Pacific coast, are home to another of the area’s famous nat­ural res­i­dents: the blue-footed booby (Sula neboxuii).

The seabirds’ shock­ingly bright blue feet are thought to attract the oppo­site sex. “They dive from some­times rather large heights into the water. It’s very cool,” said Dave Mehlman, direc­tor of the Nature Conservancy’s Migra­tory Bird Pro­gram. “They turn into liv­ing feather arrows as they plunge into the water.”

Many boat tours depart for the islands from Punta Mita; the trip takes 30 min­utes or less. Tourists would be hard-pressed to walk through the vil­lage with­out being offered a boat trip.

Spend day in Sayulita for a dif­fer­ent shop­ping experience

By MOLLY GLENTZER
Copy­right 2007 Hous­ton Chronicle

SAYULITA, MEXICO — If you have a shop­ping jones and don’t want to leave Punta Mita, pre­pare to spend big bucks.

There are upscale shops for cloth­ing, gifts, jew­elry and art at the Four Sea­sons Resort. But for some­thing a lit­tle earth­ier, take a day or half-day trip to Sayulita, a small vil­lage about 30 min­utes to the south.

Here, white linen resort wear gives way to the black cot­ton and tat­toos of a global surf crowd and leath­ery ex-pats. Many of these folks migrate to other cli­mates in the sum­mer, when it gets hot and humid. One jew­elry store clerk told me she spends her sum­mers in Thai­land. Tough life.

Among the cool shops to check out: Pan­cha Mama is a beau­ti­fully styled shop for hip clothes, jew­elry and nice stoneware. At Galería la Hamaca and Cólores, indige­nous arts and crafts are the draw, and a por­tion of sales ben­e­fits com­mu­nity projects. Try Rús­tica and Joy­ería Sol for locally designed jewelry.

Col­or­fully garbed Hui­chol Indi­ans set up shop around the small zócalo for the tourist trade, prof­fer­ing pot­tery pieces adorned with intri­cate bead­work. Other locals drive through the streets, sell­ing fresh shrimp and seafood from the backs of pickups.

Along the back streets at the far end of the beach, you’ll find entre­pre­neur­ial arti­sans who make fine jew­elry and other goods.

Surf­boards are lined up along the beach, a hap­pen­ing spot for 20-somethings.

There are casual restau­rants here, too, with tables in the sand. You won’t find a Star­bucks in Sayulita — yet — but you can sat­isfy that frap­puc­cino crav­ing with a seri­ous shake from Choco Banana, beside the zócalo.

By MOLLY GLENTZER
Copy­right 2007 Hous­ton Chronicle

PUERTO VALLARTA, MEXICO — Even from the back seat of a van full of sun­burned travel writ­ers, Puerto Val­larta entices at night.

There’s a car­ni­val­like atmos­phere along the famous Male­con prom­e­nade near the cen­ter of town. Turn inland a few blocks, and the qui­eter, nar­row streets yield bou­tiques, art gal­leries and eater­ies that beg to be explored.

I felt like I was finally in “real” Mex­ico when we passed the ornate Our Lady of Guadalupe Cathe­dral. The doors were wide open, and dim golden light spilled onto the side­walk along with voices from the small con­gre­ga­tion inside, par­tic­i­pat­ing in a Mass.

Then came the best sur­prise of all — well worth an hour’s ride from Punta Mita, indeed worth a trip from Hous­ton: a reli­gious expe­ri­ence of the culi­nary kind at Thierry Blouet’s styl­ish Café des Artistes com­pound, carved out of a century-old home on the hill above the Malecon.

Com­pris­ing sev­eral “con­cepts” that have evolved over 16 years, Café des Artistes is a gas­tro­nomic adven­ture zone. The friendly, French-born Blouet — one of Mexico’s top toques — delights in exotic ingredients.

In the main restau­rant, Café des Artistes Gourmet Bistro, you’re likely to find roasted sea bass con­sort­ing with spinach mousse and an egg­plant mar­malade; giant grilled scal­lops cavort­ing with a melt-in-your-mouth huit­la­coche and potato Par­men­tier. Or Kobe beef with a pasilla chile sauce shar­ing a plate with a potato and bacon ter­rine, fried goat cheese and black beans. The cocoa and spice-spiked roasted piglet with a “hibis­cus con­fit turnip” is another winner.

I could go on, but I’m get­ting hun­gry. Entree prices range from about 160 Mex­i­can pesos ($14.50 U.S.) for a “Grand Veg­etable Sym­phony” to 495 pesos ($45) for a 14-ounce rib-eye steak. A three-course, prix-fixe menu costs about $34, plus about $40 for house wine.

We were served (and served, and served) a tast­ing menu that would take pages to explain, each with its own wine — and I lost track of it all after the mir­rored tray of a dozen or so deserts arrived and Blouet cheer­fully brought out his best liqueur.

Although Blouet’s meticulously-styled dishes clearly mark him as the “artiste” of the house, con­tem­po­rary sculp­ture plays out the theme in sev­eral invit­ing envi­ron­ments. (You’ll have to visit more than once to enjoy them all.) We ate under the stars in the lush, mul­ti­level trop­i­cal gar­den. Another room is all can­dle­light, crys­tals and white walls. The Con­stan­tini Wine Bar, where 350 bot­tles are avail­able by the glass, has a cool mod­ern vibe.

Then there’s Thierry Blouet Cocina de Autor, a stun­ning upstairs room that feels like the inside of a ter­rar­ium. Here, the chef and his army of sous-chefs whip up three-, four– and five-course tast­ing menus nightly that range in price from about $53 to $68 U.S. To fin­ish off the evening, you can choose your own music in an inti­mate new Cigar and Cognac lounge.

By PEGGY GRODINSKY
Copy­right 2007 Hous­ton Chronicle

PUERTO VALLARTA, Mex­ico — You may not have flip­pers or a shell, but if you are among the grow­ing num­ber of tourists and expa­tri­ates cap­ti­vated by the beau­ti­ful Pacific coast­line north of Puerto Val­larta, you do have some­thing in com­mon with sea tur­tles: a taste for pris­tine, unde­vel­oped, remote beaches.

Unfor­tu­nately, your needs and theirs may collide.

Three species of tur­tle — the Olive Rid­ley, Hawks­bill and the crit­i­cally endan­gered Leatherback — lay their eggs on the con­tigu­ous beaches of Litibu, Mali­nal, Punta Negra and Careyeros, a two-mile stretch of rapidly devel­op­ing white beach and rock out­crops in the Mex­i­can state of Nayarit.

Two years ago, expa­tri­ates liv­ing along those beaches began meet­ing over potlucks to talk about how to pro­tect the nat­ural tur­tle nurs­ery. They’ve recently for­mal­ized a part­ner­ship with the non­profit Grupo Eco­logico Manos Unidas por Litibu A.C (Litibu Ecol­ogy Group). With the Mex­i­can government’s okay, exper­tise from biol­o­gists and back­ing from the expa­tri­ates, the group oper­ates a tur­tle cor­ral where the eggs can safely hatch.

“We want to estab­lish the (non­profit) before the hotels are devel­oped, so that we can have some impact,” said Susan Drexler-Price, an orga­nizer of the grass­roots home­own­ers group and for­mer his­tory teacher from Oak­land, Calif. (Now, she runs the Pie in the Sky bak­eries in nearby Buce­rias and Puerto Vallarta.)

Sea tur­tles face a host of threats around the world. They get tan­gled up in com­mer­cial fish­ing lines and nets. Pol­lu­tion makes them sick, lit­er­ally. Some species are killed for meat, oth­ers for their shells.

In Nayarit, poach­ers steal the eggs for their alleged aphro­disiac effects, gulp­ing them raw with lime and chili. Poached eggs can fetch as much as 10 pesos apiece, says Gilberto Galindo Cas­tro, pres­i­dent of the Litibu Ecol­ogy Group and a biol­o­gist. At that price, a sin­gle nest con­tain­ing about 100 eggs nets a poacher 1,000 pesos (about $90 U.S.). Com­pare that, he says, to Mexico’s min­i­mum daily wage of 45 pesos.

The Mex­i­can gov­ern­ment takes poach­ing seri­ously, he con­tin­ued, assess­ing steep fines or jail time — “it’s a worse offense than drugs” — but it lacks the man­power to pre­vent the crime in the first place or pros­e­cute offend­ers in the second.

Rapid devel­op­ment endan­gers the tur­tles, too. Tourists, and locals for that mat­ter, ride ATVs up and down the beach, poten­tially crush­ing the eggs. (Drexler-Price once stopped some rid­ers to try to edu­cate them. “So who are you?” one asked her. “The tur­tle bitch?” She jokes that she’s con­sid­ered mak­ing up T-shirts with the phrase.) Also, lights from mush­room­ing hotels and homes along the beaches con­fuse the new hatch­lings, which make their way to the ocean by fol­low­ing moon­beams reflect­ing off the water. The longer it takes them to reach the ocean, the slim­mer their chances of ever get­ting there.

Dur­ing egg-laying sea­son (June-December), vol­un­teers from the Litibu Ecol­ogy Group, many of them uni­ver­sity stu­dents, care­fully move the eggs to the cor­ral, metic­u­lously record­ing num­bers and nest loca­tions. When the eggs hatch, which hap­pens en masse, the new­borns scurry across the beach to the sea. Vol­un­teer Jamie Perkins says only one in 1,000 will sur­vive to adult­hood. Amaz­ingly, eight to 10 years later, the female tur­tles return to their natal beach to lay their own eggs.

Efforts in Mex­ico to pro­tect sea tur­tles are a patch­work of offi­cial and unof­fi­cial endeav­ors, accord­ing to Sea Tur­tle, Inc., a non­profit based in South Padre Island. In the 1960s, Galindo Cas­tro remem­bers “mucho, mucho” tur­tles on this two-mile stretch. (Careyeros, trans­lates as “tur­tle hunter beach,” indi­cat­ing the tur­tles have come here, and men have killed them, for quite some time).

Then the gov­ern­ment said it was okay to har­vest them, and their num­bers plum­meted. When the gov­ern­ment changed its mind and changed its pol­icy begin­ning in 1990, Galindo Cas­tro says the num­bers went up again. Since that about-face, SEMARNAT (Mexico’s equiv­a­lent of our Envi­ron­men­tal Pro­tec­tion Agency) has oper­ated a cor­ral in Nuevo Val­larta, about 10 miles from Litibu, last year gath­er­ing eggs from some 4,000 tur­tle nests to bet­ter the hatch­lings’ chances for sur­vival. His own group hopes to relo­cate eggs from 200 sea tur­tle nests in the com­ing season.

There are seven sea tur­tle species in the world. All are endan­gered, some, includ­ing the leatherback, crit­i­cally. Why bother to save them?

“Biol­o­gists could tell you we don’t know exactly what could hap­pen … if they become extinct, prob­a­bly some­thing dra­matic,” Jeff George of Sea Tur­tle Inc., said dur­ing a tele­phone inter­view. “We can’t tell you exactly how (things) would fall apart, but we know enough about their diet to theorize.”

He gave a “for instance.” Some sea tur­tle species eat jel­ly­fish like they are going out of style. If the tur­tles weren’t around to eat the jel­ly­fish, the jel­ly­fish pop­u­la­tion would explode. The hun­gry jel­ly­fish hordes, in turn, would gorge on zoo­plank­ton. That’s bad, very bad, as plank­ton is vital for healthy seas. Or sup­pose the sea tur­tle species that George described as the “lawn­mower of the ocean” went extinct. Its dietary habits ensure healthy sea­grasses, where it just so hap­pens fish lay eggs and shrimp spawn. Should those tur­tles dis­ap­pear, it doesn’t look so good for fish or shrimp, either. Or for us.

Sit­ting at a beach­side restau­rant not far from the nest­ing grounds she dreams of pro­tect­ing, nib­bling on chips and sip­ping a cool drink, Drexler-Price, a layper­son, sums up. “Basi­cally,” she said, “it’s our future.“

10:00 PM
PDT on Sat­ur­day, April 14, 2007
By JASON BLEVINS
The Den­ver Post

SAYULITA, MEXICO — Leg­end holds that those who drink the water in this whim­si­cal fishing-village-turned-surf-hideaway will fall prey to the region’s siren song, assur­ing not only sev­eral return trips but a life­time spent snar­ing oth­ers under Sayulita’s salty spell.

Wedged between dense jun­gle and the Pacific Ocean, this once-humble vil­lage has become the sandy metrop­o­lis of Nayarit, the coastal state north of bustling Puerto Vallarta.

That’s not to say that 3,000-resident Sayulita is any­thing like its sprawl­ing, resort-rich neigh­bor to the south. It’s just that Sayulita’s four square blocks of beach­front fun ranks as the largest vil­lage among Nayarit’s bounty of not-quite-remote but lonely ocean­front hamlets.

Villa Amor over­looks the bay at Sayulita, Mex­ico. The village’s hotels are cozy and affordable.

Sayulita’s fish­ing econ­omy slowly began to give way to tourism in the mid-1960s.

In the 1970s the gov­ern­ment, as part of a nation­wide urban­iza­tion effort, erected a town square in Sayulita and flanked it with new build­ings. Still, the vil­lage spent three decades off the beaten path of bare­foot tourists, hap­pily hid­ing in the shad­ows of the big-box hotels emerg­ing in Puerto Vallarta.

The quiet vil­lages of Nayarit have always been pop­u­lar with Mex­i­can vaca­tion­ers from Guadala­jara and Mex­ico City, but among oth­ers, word of the region’s trea­sures rarely trick­led beyond the secre­tive sect of vagabond surfers.

But, as with every hid­den par­adise, word spread. Out­side Mag­a­zine in the late ‘90s whis­pered to its half-million sub­scribers that Sayulita was top-shelf for any­one seek­ing a south­ern trop­i­cal get­away sans doorman.

Bull­doz­ers started forg­ing far­ther up the jun­gled ridges above the surf, clear­ing roads for pala­tial homes for out­siders. Cob­ble­stone avenues in Nayarit’s Sayulita, Punta Mita, San Fran­cisco and even Lo de Mar­cos now host plenty of real estate offices.

Despite its “dis­cov­ery,” Sayulita remains rootsy with deli­cious food, comfy and afford­able hotels, lodges and homes, and a mostly happy-to-see-you local population.

It remains the more rough-hewn, adven­ture­some alter­na­tive to Puerto Val­larta — a per­fect place for the folks more apt to name the scur­ry­ing sand crabs liv­ing in the bath­room and feed the geckos on the porch.

Ex-Chicagoan gives Mex­i­can kids leg up with Eng­lish flu­ency at his non-profit school

By Marla Dick­er­son
Tri­bune News­pa­pers: Los Ange­les Times
Pub­lished April 11, 2007

PUERTO VALLARTA, Mex­ico — A few years after retir­ing to this Pacific resort city, Amer­i­can David Ben­der was bored with golf. His new hobby, he decided, would be tack­ling Mexico’s income inequal­ity. He would do it by teach­ing Eng­lish to Mex­i­can children.

Mex­ico didn’t ask for his help. And the for­mer Chicago adver­tis­ing exec­u­tive knew noth­ing about run­ning a school. But Ben­der saw work­ing fam­i­lies hun­gry for afford­able English-language instruc­tion and upward mobil­ity for their children.

Credit a sea­soned adman for know­ing his market.

In less than 5 years, Cole­gio Mexico-Americano has become the largest school in Puerto Val­larta. The non-profit’s tuition is 70 per­cent less than that of the city’s prici­est bilin­gual acad­emy. Enroll­ment has grown to 1,135 pupils and stu­dents, with dozens on the wait­ing list.

Friends who thought Ben­der had gone off the deep end were cor­rect in one respect; the pri­vate insti­tu­tion boasts Puerto Vallarta’s only Olympic-size swim­ming pool.

Not bad for a project that began in August 2002 with a few preschool­ers learn­ing their ABCs. It is vin­di­ca­tion for Ben­der, 71, a preacher’s son who never lost faith when the cur­rent cam­pus was a weed-choked vacant lot with no fund­ing and plenty of doubters.

“We saw a tremen­dous need,” Ben­der said. “We are try­ing to build a mid­dle class in Mexico.”

Some might chafe at the notion of an Amer­i­can who speaks lit­tle Span­ish pre­sum­ing to remake Mex­i­can soci­ety. But the school’s enthu­si­as­tic recep­tion here speaks of par­ents’ desire for their chil­dren to learn Eng­lish in a town where most of the good jobs require it.

There are few devel­op­ing nations with more to gain by teach­ing its cit­i­zens Eng­lish. About 85 per­cent of Mexico’s exports go to the United States. Amer­i­cans and Cana­di­ans con­sti­tute the major­ity of its inter­na­tional vis­i­tors. More than 400,000 Mex­i­cans migrate ille­gally to the U.S. each year in search of work. The money these expa­tri­ates send home — $23 bil­lion last year — is a pil­lar of Mexico’s economy.

But while His­panic nations such as Costa Rica and Chile have seized on Eng­lish flu­ency as a key to global com­pet­i­tive­ness, Mex­ico has done lit­tle to pre­pare its young­sters. The state requires just three hours a week of Eng­lish instruc­tion for three years dur­ing Mexico’s equiv­a­lent of junior high school, often by teach­ers who don’t speak the lan­guage well.

“Pen­cil. Win­dow. Door. It was use­less,” said Jose de Jesus Alcan­tar Del­gado, a Puerto Val­larta work­man recall­ing his rudi­men­tary lessons. Lack of flu­ency has kept him from higher-paying employ­ment in the city’s air-conditioned resorts.

Experts blame scarce resources, an inflex­i­ble teach­ers union and wide­spread resent­ment of U.S. hege­mony. But Puerto Val­larta mother Kenia Salazar Tor­res isn’t buy­ing it. Eng­lish is stan­dard in elite acad­e­mies where the chil­dren of Mexico’s wealthy matric­u­late. Salazar wants the same chance for her three boys.

Her old­est son, Jose Rodolfo, 9, has a par­tial schol­ar­ship to Cole­gio Mexico-Americano. Salazar earns the rest by ris­ing before dawn to pre­pare refried beans for local mar­kets. Her hus­band, Arturo, is a ticket seller at the bus station.

Such sto­ries keep Ben­der focused on his sec­ond career.

Raised in Pitts­burgh, the grand­son of a Ger­man immi­grant farmer and son of an evan­gel­i­cal min­is­ter, Ben­der par­layed a mag­a­zine writ­ing con­test into a col­lege schol­ar­ship. He got into adver­tis­ing, even­tu­ally start­ing his own agency, Chicago-based Ben­der Brown­ing Dolby & Sander­son. Ben­der pros­pered. He and his wife, Glo­ria, moved into an ocean­front home near Puerto Val­larta in 2000. It was time to slow down, enjoy the good life.

Con­ver­sa­tions with the mostly Mex­i­can con­gre­ga­tion of his local church, the New Dawn Chris­t­ian Cen­ter, led to the idea of launch­ing a sec­u­lar, non-profit, bilin­gual school that working-class fam­i­lies could afford.

The real estate mar­ket in Mex­ico is boom­ing — and it’s about to explode. That’s the mes­sage three Val­ley entre­pre­neurs are send­ing to poten­tial investors in Ari­zona, across the nation and around the world.

“Buy­ing prop­erty in Mex­ico is a won­der­ful oppor­tu­nity,” said Tim Kel­ley, chief oper­at­ing offi­cer of the IMI Group, a Phoenix-based invest­ment and mort­gage com­pany at 2398 E. Camel­back Road with offices in Austin, Texas, New York and busi­ness links in Ger­many and through­out Mex­ico.

“And it’s going to get even bet­ter,” Kel­ley added.

He cited the grow­ing num­ber of baby boomers in the United States who have a com­bined esti­mated spend­ing power of more than $2 tril­lion dol­lars as the future group of investors.

Recent changes in Mexico’s property-ownership laws make it eas­ier — and more secure — for U.S. investors.

Last year, three major money lenders, or finan­cial groups, were offer­ing loans for prop­er­ties in Mex­ico. Today, the num­ber has increased to nine, accord­ing to IMI Group.

The firm esti­mates U.S. cit­i­zens own $30 bil­lion in res­i­den­tial real estate in Mex­ico, and another $5 bil­lion is expected to be devel­oped dur­ing the next two years.

Roy Nel­son, asso­ciate pro­fes­sor of inter­na­tional stud­ies at Thun­der­bird School of Global Man­age­ment in Glen­dale, said Mexico’s econ­omy is grow­ing, help­ing fuel rapid devel­op­ment of real estate.

How­ever, he believes the over­all growth is not as rapid as most inter­na­tional — and Mex­i­can investors — would like it.

“There are a lot of peo­ple, includ­ing Mexico’s Pres­i­dent Felipe Calderón, who would like to see the country’s econ­omy grow­ing a lot faster, but there are polit­i­cal forces that are hold­ing it back some­what,” said Nel­son, who also teaches at sev­eral Mex­i­can universities.

Nel­son echoes IMI Group’s opin­ion about real estate expan­sion, par­tic­u­larly in areas like Mon­ter­rey, Mex­ico, a mag­net for for­eign com­pa­nies and grow­ing real estate.

“Monterrey’s real estate prices are sky­rock­et­ing,” Nel­son said. “A lot of peo­ple from the United States and Canada are buy­ing prop­erty in Mon­ter­rey as well as other areas that attract tourists.”

The IMI Group — Inter­na­tional Mort­gage & Invest­ment Com­pany — was cre­ated two years ago by Kel­ley, a finance, real estate and con­struc­tion expert who lived in Mex­ico for 10 years; Kevin Hardin, chief exec­u­tive offi­cer and vet­eran mort­gage lender; and Tracy Smith, chief mar­ket­ing offi­cer and real estate entre­pre­neur who has been trac­ing Mexico’s eco­nomic expan­sion since he was a child.

“My fam­ily owned a home in Rocky Point, and we reg­u­larly vaca­tioned there,” Smith said. Smith, a Val­ley native, said when IMI Group first started he tried to con­tact as many poten­tial investors as pos­si­ble. He and Hardin teamed up, then asked Kel­ley, who had sold real estate not only in Mex­ico but also in Chile, Por­tu­gal, Spain, Venezuela, Brazil, Colom­bia and Israel, to join them as well. The IMI Group was born.

The prin­ci­pals of IMI Group so far have sold more than $10 bil­lion in mort­gage loans and coor­di­nated more than $200 mil­lion in con­struc­tion projects, mostly com­mer­cial and res­i­den­tial, includ­ing con­dos. The com­pany deals pri­mar­ily with U.S. and Cana­dian investors buy­ing sec­ond homes in Mex­ico and devel­op­ers in Mexico.

The solid secu­rity of putting dol­lars in Mex­i­can prop­erty was not always the case, how­ever, Kel­ley said, but times are changing.

“In most of Mex­ico, Amer­i­cans — or any other for­eigner — can now own land out­right with what’s called fee sim­ple title, the same kind we have in the United States,” Kel­ley explained. He said there is a restricted zone — 31 miles from the ocean and 62 miles from the bor­ders — where for­eign­ers can’t hold fee sim­ple titles.

Titles must be held in a trust that is per­pet­u­ally renew­able in 50-year terms. Kel­ley said this is vir­tu­ally iden­ti­cal to a Deed of Trust, sim­i­lar to what is avail­able in Arizona.

There are also areas in Mex­ico that are set aside by the Mex­i­can gov­ern­ment for home­stead­ers in com­mu­nal prop­er­ties (Eji­dos) which, in the past, have cre­ated legal dis­putes between Mex­i­cans and for­eign investors. “The fact remains that Mex­ico and the United States have fun­da­men­tally dis­tinct legal sys­tems, dif­fer­ent pol­i­tics, dif­fer­ent lan­guages and dif­fer­ent cus­toms,” Kel­ley said.

Banyan Tree to Joint Ven­ture to Build a World Class Resort in Chamela with Golf

Banyan Tree Hold­ings is invest­ing with a Mex­i­can part­ner to develop approx­i­mately 500 acres in Chamela, approx­i­mately 2 hours south of Puerto Val­larta. The inte­grated resort will offer guests spec­tac­u­lar views of the pro­tected islands around Chamela and will fea­ture a world-class golf course and a high-end mix of Banyan Tree branded res­i­dences for sale.

I’ve been to the exact loca­tion and looked at it from a devel­op­ment per­spec­tive. It is a truly spe­cial loca­tion. The only draw back is it acces­si­bil­ity to the world; how­ever, I guess after a few spa treat­ments, you will not care about the jour­ney, only the des­ti­na­tion. Banyan Tree has part­nered with the Mex­ico Owner and has taken minor­ity inter­est of 19.9% in the devel­op­ment and has an option to increase its invest­ment to 30% of the devel­op­ment within a year and a half.
Banyan Tree is invest­ing $200 mil­lion USD in Mex­ico to develop 4 projects. Besides the Chamela project, Banyan Tree also is devel­op­ing Banyan Tree Los Cabos, Banyan Tree Punta Dia­mante in Aca­pulco and Banyan Tree Mayakoba in Rivera Maya. It is a lead­ing devel­oper, designer and oper­a­tor of lux­ury resorts, hotels and spas worldwide.

We have heard dif­fer­ent inter­pre­ta­tions of the Mex­i­can cap­i­tal gains
tax and what we must do to avoid it, what is yours?

We have FM3s (work­ing, not just retir­ing) and have had them and lived here for 11
years not own­ing any other house. Our rental busi­ness is a sole
pro­pri­etor­ship that pays all per­ti­nent local, state and fed­eral pay­roll
taxes, income taxes, etc. I have a per­mit from the city and a tax ID number.

Would the clos­ing (the $ trans­fer) be in the US?

Here is some­thing a local col­league, Wayne Franklin, wrote up to illus­trate the UDI formula:

I’m going to show you two dif­fer­ent sales.

Both have the same sales price for today, but dif­fer­ent pur­chase prices:
one at $5,000,000 pesos (or approx­i­mately $455,000 USD)
and another at $7,000,000 pesos (or approx­i­mately $635,000 USD).

The cal­cu­la­tions are for for­eign­ers, as for Mex­i­cans, they can be dif­fer­ent
based on the Mexican’s tax base rate.

The cal­cu­la­tions assume an 8% bro­ker­age fee.

Note that the Adjusted Pur­chase Price does NOT include any fis­cal adjust­ment
that would also be applied since the pur­chase of the prop­erty, which would
effec­tively reduce the taxes to be paid. As to the real estate com­mis­sion,
IVA is not fac­tored in for this calculation.

$5,000,000 Peso Orig­i­nal Pur­chase Price:

Cur­rent Sales Price $9,000,000 March 2007

UDI Deduc­tion ($5,737,809) (1.5M UDIs x 3.825206)

Amount Exceed­ing Deduc­tion $3,262,191 (36.25% of sales price)

Adjusted Pur­chase Price ($1,812,500) ( 36.25% x $5,000,000)

Adjusted Real Estate Com­mis­sion ($ 261,000) (36.25% x $720,000)

Total Gain $1,188,691

Cap­i­tal Gains Tax Due $ 332,833 (28% x $1,188,691)

—————————————————————————
$7,000,000 Peso Orig­i­nal Pur­chase Price:

Cur­rent Sales Price $9,000,000 March 2007

UDI Deduc­tion ($5,737,809) (1.5M UDIs x 3.825206)

Amount Exceed­ing Deduc­tion $3,262,191 (36.25% of sales price)

Adjusted Pur­chase Price ($2,537,500) ( 36.25% x $7,000,000)

Adjusted Real Estate Com­mis­sion ($ 261,000) (36.25% x $720,000)

Total Gain $ 463,691

Cap­i­tal Gains Tax Due $ 129,833 (28% x $463,691)

In the first sce­nario, your REAL profit is approx­i­mately $3.3 mil­lion pesos
($9M, minus $5M, minus bro­ker­age fees). That means that your REAL tax rate
is just over 10%! ($332,833 divided by $3,280,000) – remem­ber, that’s all
pesos.

If EVERYBODY had a 10% flat tax, I think we’d all be pretty happy about it.
In the sec­ond sce­nario, it’s the same – just over 10%. While there are still
cri­te­ria to meet for this, you don’t have to meet the most dif­fi­cult
cri­te­ria item, which is to reside in the home for 5 years; only 6 or more
months.

All things con­sid­ered, this is not such a bad deal.

As you can see, despite the fact that some think that the 1.5M UDIs is an
«exemp­tion» to that amount and then you pay taxes on all the value that
exceeds that, this is not the case. So despite the fact that you may have
pur­chased a prop­erty exceed­ing the UDI exemp­tion, the cur­rent law does have
ben­e­fits for you too.

These fig­ures are based on the law as of today and can change at any time.
In addi­tion, you MUST con­firm all cal­cu­la­tions in your par­tic­u­lar sit­u­a­tion
with the Notario Pub­lico in your trans­ac­tion as each case is dif­fer­ent and
there may be idio­syn­crasies of your deal that may affect your par­tic­u­lar
sit­u­a­tion. As you can see from these exam­ples, own­ing prop­erty in Mex­ico is
still a very good investment.

Based on what I know, you have had title for 11 years and are very much in the clear.
As for a straight answer to the issue, I’m no lawyer, but as I under­stand it, like any­where, cap­i­tal gains tax codes are con­tin­u­ally mod­i­fied to fit the times and the big change this year is in the “no exemp­tions” code.

Last year you had to own the prop­erty as your pri­mary res­i­dence for 6 months to avoid the tax. This year, they changed it to 5 years residency.

It is cool­ing spec­u­la­tion and the notar­ios have less lat­i­tude and are get­ting more organized/standardized.

————————————————————————

Start­ing Jan­u­ary 2007 there are three lev­els of exemp­tion:
Total exemp­tion, Par­tial exemp­tion and No exemption.

Total exemp­tion
——————————————————
Proof of five year res­i­dency: FM2-3, busi­ness accounting/hacienda doc­u­men­ta­tion, util­ity bills

No Exemp­tion:
——————————————————
25% of the gross sales price or 28% of the net gain
Deduc­tions:
bro­ker­age fees
cap­i­tal improvements

Par­tial Exemp­tion
——————————————————
Proof of six month res­i­dency: FM2-3, busi­ness accounting/hacienda doc­u­men­ta­tion, util­ity bills
The par­tial exemp­tion is cal­cu­lated using the Unidad De Inver­sion (UDI)
http://coinmill.com/MXV_calculator.html

Unidad de Inver­sion (UDI). Loans denom­i­nated in UDIs main­tain their pur­chas­ing power and pro­vide a real rate of return in pesos.

In 1995, dur­ing the deval­u­a­tion, Mex­ico intro­duced a price-level-adjusting unit of account called the Unidad de Inver­sion (UDI), an index unit of funds.

It can be traded in many cur­rency mar­kets because its value changes with respect to cur­ren­cies. Unlike cur­ren­cies, it is designed to retain its pur­chas­ing power and not be sub­ject to inflation.

The Mex­i­can credit sys­tem (espe­cially mort­gages) uses the UDI rather than the peso because of its stability.

The UDI fluc­tu­ates daily and is cur­rently at +/- 3 UDIs to the peso.

The new tax law describes a par­tial exemp­tion of up to 1.5 mil­lion UDIs and can be cal­cu­lated using a rather com­pli­cated for­mula that has vari­able worth gong over per­son­ally with a lawyer.

You will need a lawyer to get the most accu­rate assessment.

That it is dif­fi­cult to get a straight answer is bad for everyone.

I think we both know you are per­fectly exempt, but would like it in stone before mak­ing the big decisions.

The lawyers and Notar­ios we use can help with that.

but you should keep ask­ing the ques­tions Here is a link with good info

http://www.virtualvallarta.com/puertovallarta/realestate/re-articles/useful-information-for-th.shtml

and here are well reputed lawyers you can talk to

David Con­nell
CONNELL & ASSOCIATES
Hermenegildo Galeana #18
Col. Cen­tro, Zihu­atanejo, Gro.
C.P.: 40880 M e x i c o
Phone: 011 52 (755) 555 0400 or 554 1370
Fax: 011 52 (755) 554 2035
http://www2.blogger.com/www.mexicolaw.com.mx
dconnell@mexicolaw.com.mx

María Eliz­a­beth O’Connor
Rob­les, Lazo y Gal­lardo, S.C.
Car­retera a Mis­maloya No. 479, Int.107
Edi­fi­cio Scala
Puerto Val­larta, Jalisco 48380
Tel. 011–52-322–223-3218
Fax 011–52-322–223-2790
moc@rlg.com.mx
http://www2.blogger.com/www.rlg.com.mx

Javier de La Pena
Marina Las Pal­mas 2 Local 25
Acceso por Calle de Ancla.
Marina Val­larta, C.P. 48334.
Puerto Val­larta, Jalisco, Mex­ico.
Tel: 322 2091549
Fax: 322 2090544
Cel: 322 2275815
javierdelapena@yahoo.com

Other inter­est­ing read­ing:
http://www.pwc.com/extweb/service.nsf/docid/6A6886056BC7C8A6802570B3005D6FCF

Nancy Lan­thier, Van­cou­ver Sun
Pub­lished: Sat­ur­day, March 31, 2007

Two local lec­tures in April will shed light on travel oppor­tu­ni­ties — one to explore the little-known South­east Asian coun­try Myan­mar (for­merly Burma), the other to expe­ri­ence a spir­i­tual cer­e­mony in Mexico.

Can­West con­trib­u­tor Andrew Ren­ton describes Myan­mar in a press release as “a mag­i­cal yet con­tentious coun­try.” The well-known writer — who takes impres­sive pho­tographs and shares a good yarn — offers tips on expe­ri­enc­ing the best of this exotic place (bor­dered by China, Laos, Thai­land and India). The talk will take place April 4 at 7 p.m., at Van­cou­ver Pub­lic Library (350 West Geor­gia); tick­ets are $12; for more infor­ma­tion, call 604–732-0054.

- — -

A talk on par­tic­i­pat­ing in the Mex­i­can “Cer­e­mony of Fire” — said to be a life-changing expe­ri­ence — is pre­sented by Wirrarika Conex­ion, April 18 at 6 p.m. and April 21 at 4:30 and 6:30 p.m. at the Van­cou­ver Pub­lic Library (350 Geor­gia St.).

Oper­ated by Juan Car­los Quin­tero and his part­ner, Wirrarika says in a press release that it guides trav­ellers deep into an indige­nous cul­ture to expe­ri­ence a spir­i­tual jour­ney guided by a shaman.

“This is some­what exclu­sive,” writes Quin­tero in a recent e-mail, “since these cer­e­monies are not eas­ily accessible.”

For those inter­ested in “expand­ing their spir­i­tual knowl­edge,” the jour­ney takes place May 24 to 26, in Cha­cala, Nayarit, a small fishing/tourist vil­lage set on a beach near Puerto Vallarta.

nlanthier@png.canwest.com