Can a Foreigner Buy Real Estate in Mexico
Can Foreigners own property in Mexico?
Any Foreigner or any Mexican national can establish a Fideicomiso (the equivalent to a beneficial trust) through a Mexican bank in order to purchase real estate anywhere in Mexico, including the Restricted Zone.* The Buyer requests a Mexican bank of his/her choice to act as a trustee on his/her behalf. The Bank obtains a permit from the Ministry of Foreign Affairs to acquire the chosen property in trust. The Fideicomiso may be established for a maximum of 50 years and can be automatically renewed for another 50 years.
The Bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary who has all of the benefits of a direct owner, including the ability to lease or transfer his/her rights to the property to a third party or a pre-appointed heir. During this period, the foreigner is considered as a Mexican National in any legal matter relating to the property. The Bank Trustee is responsible to the Beneficiary to ensure the fulfillment of the Trust, assuming full technical, legal and administrative supervision in order to protect the interests of the Beneficiary.
There is a common misconception among foreigners investing in Mexico that once the trust expires, the beneficiary loses all rights and benefits of the sale of the property held in trust. This is not the case. On the contrary, the beneficiary has a contractual right under the trust agreement with the Mexican bank to all benefits that may result from the use or sale of that property, even though he does not hold title to the property. Under Mexican Law, the bank, as trustee, has a fiduciary obligation to respect the rights of the beneficiary, and the trust property cannot be commingled with property of the bank.
A real estate trust is not a lease. The beneficiary can instruct the bank to sell or lease the property at any time. The beneficiary can develop and use the property to his liking and benefit, within the provisions of the law. Generally, the law allows most uses of property to foreigners that are allowed to Mexicans.
*Laws passed in 1973 and 1993 have made it possible for Foreigners to purchase property within 64 miles of the Mexico’s borders and 32 miles from its coastline.