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This is a lengthy and complicated subject and it seems that the rules change regularly. Most "tourists", upon crossing the border, obtain tourist visas good for a maximum of six months after which time one must return to the US but are then allowed to reenter, reapply and spend another six months in Mexico. For those expatriates interested in more extended stays, two other visas are available: FM-2 and FM-3. The FM-3 is issued annually (with an annual fee, currently about $200) and renewable every five years. It allows the recipient to leave Mexico as many times as they wish for as long as they wish so long as they return for their annual renewal. The FM-2 is also renewable each year (also with a fee), allows the recipient to leave Mexico as often as desired but restricts the total number of months one may remain abroad, thus requiring checking with immigration each time one leaves and returns; however after being an FM-2 for five years one may become "inmigrado" which gives one all of the rights of a Mexican citizen except the right to vote and the annual renewal (and fee) is no longer required. An Inmigrado holds dual citizenship with Mexico and his native country.
Is a document for a person who intends to permanently reside in Mexico, with qualifications only slightly more stringent than FM-3. After five years of successfully meeting the requirements of FM-2 (including restricted time out of Mexico), one may apply for "Inmigrado" status, which allows you to enjoy most of the rights and privileges of Mexican citizen, the primary exception being the right to vote. Inmigrado status does not require you give up your native citizenship, but holders may freely work and remain in Mexico without annual renewals of immigration paper.
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