Written for Mexico. This analysis applies to Mexican federal tax law — ISR (income tax), IVA (VAT) and SAT rules — and cites Mexican statutes. Amounts are in Mexican pesos (MXN).
The typical migration of the sophisticated Mexican investor — from the local brokerage to Interactive Brokers or Schwab, and from US ETFs to Irish UCITS — is almost always decided on fees and catalog. Almost no one runs the full tax bill, which has three layers that change depending on the channel: your Mexican income tax on gains, the withholdings on dividends, and a tax most people find out about late and badly: the US estate tax. Here are all three, channel by channel.
Layer 1 — Mexican income tax: the 10% stays at the door
The 10% schedular rate applies to disposals through Mexican exchanges (including the SIC). Selling through your foreign broker directly does not qualify: those gains fall into the general disposal regime — accumulable at a schedule of up to 35%, with adjusted cost and its mechanics (high confidence in the structural conclusion; this is THE hidden cost of the direct broker). The same VOO bought via the SIC (10%) or via IBKR (up to 35%) can mean a difference of 25 points of the gain. Add to that the operational burden: without a Mexican brokerage there is no tax statement — the per-transaction calculation, the exchange rate by date, and the working papers are yours. And foreign dividends are accumulated at the schedule on your annual return, crediting the foreign withholding (with a cap), whatever channel you are in.
Layer 2 — withholdings on dividends: 10, 15 or 30
Dividends from US securities to a Mexican resident: 10% withholding under the Mexico-US treaty (by filing the W-8BEN — any serious broker processes it; without it, 30%). The Irish route changes the plumbing: the Irish UCITS ETF that replicates the S&P suffers a 15% US→Ireland withholding (US-Ireland treaty) inside the fund, and Ireland withholds nothing when paying you or accumulating. Friction comparison on dividends: direct US with W-8BEN = 10% (best); Irish = 15% internal (worse by 5 points). So why does half the world use the Irish ones? Because of layer three — and because of the accumulating funds: the UCITS that reinvest without distributing defer the event in Mexico… with a serious technical asterisk: applying the Mexican rules on foreign passive income (REFIPRE / Title VI) to accumulating funds is an unsettled debate — the position of deferring until the sale is the dominant, defensible practice; its complete protection, unsettled. Whoever holds large positions in accumulating funds must know the debate, not discover it in an audit.
Layer 3 — the estate tax: the tax that charges your death, not your gain
The US taxes the estate of US-situated assets of non-resident foreigners: shares of US issuers and US-domiciled ETFs count as "US situs," the exemption for non-residents is a mere USD $60,000, and the rate scales up to 40% (high confidence; Mexico has no estate-tax treaty with the US to relieve it). Brutal translation: the Mexican investor with USD $2M in VOO at Schwab bequeaths their family a potential tax of several hundred thousand dollars — plus a process (probate) to release the account. This is the case for the Irish ones: the UCITS domiciled in Ireland is not a US-situs asset — same S&P inside, zero estate tax. The alternatives for those who insist on the direct US channel: interposed structures (with their cost and their own Mexican tax analysis) or insurance — but for the standard wealth investor, the Irish UCITS is the simple solution. Labels for the full menu: SIC with a Mexican brokerage (10%, no estate tax in practice for this channel, tax statements) — the safe and efficient base that most portfolios should use; foreign broker + Irish distributing UCITS — defensible and clean, paying the schedule on gains in exchange for catalog/costs, with the estate tax solved; foreign broker + US-domiciled ETFs in large amounts — legal but careless in wealth terms (the estate exposure is not interpretive risk: it is law in force waiting for a bad day); Irish accumulating funds in large positions without knowing the REFIPRE debate — defensible/unsettled: operate with counsel, not forums.
Was your international portfolio designed — or did it just accumulate?
The cross-border review answers the four questions that cost money: how much extra income tax you are paying by channel, how much estate-tax exposure your family carries today, whether your accumulating funds have a REFIPRE issue, and the migration architecture (which also has tax costs — moving means selling). With seven-figure dollar portfolios, this analysis is not optional: it is the difference between bequeathing a portfolio or bequeathing a problem.
Frequently asked questions
Does the SAT find out about my Interactive Brokers account?
Yes — CRS automatically reports to Mexico the balances and returns of your financial accounts in participating jurisdictions, and the US reports through its own channels. The undeclared foreign account is no longer a risk: it is a documented omission waiting for a match. The article on foreign accounts and CRS/FATCA covers it in full.
So do I sell all my Schwab VOO tomorrow?
Not without a plan: selling means realizing gain at the schedule (the very problem you want to avoid). The migration is designed — amounts, tax calendar, what moves to UCITS, what returns to the SIC, and the sequence that minimizes the bill of the switch. The real urgency depends on your US-situs amount and your family situation: above a few hundred thousand dollars, the estate tax makes the review a priority.
Do accumulating Irish UCITS 'never pay anything' in Mexico?
They pay when you sell — gain accumulable at the schedule. What they defer is the annual toll on dividends. And the REFIPRE asterisk from the article applies: the deferral position is the dominant, defensible practice, not a declared safe harbor. For small positions it is noise; for large ones, it is mandatory analysis.
What if I invest through my Mexican company instead?
It changes the whole analysis: the company accumulates its worldwide returns at 30% (with no 10% schedular rate — that one is for individuals), adds a dividend layer on withdrawal, but solves estate tax through interposition and brings order to large estates. There are structures where it wins and structures where it gets in the way — it is exactly the architecture decision you run with your numbers, not with rules of thumb.
Let's talk about your case
The first step is always the same: an honest diagnostic of where you stand. Write to us on WhatsApp or call — a reply the same business day.