FOREIGNERS AND PROPERTIES IN MEXICO

How a foreigner can buy property & real estate in Mexico? For this is important to take into consideration the “Restricted Zone” and the options you have if you want to buy a property located in the Restricted Zone. 

RESTRICTED ZONE

The Mexican Constitution (Article 27) establishes that a Foreigner can´t acquire directly a property in Mexico if the property is located in the Restricted Zone, the Restricted Zone is the zone that is located 100 kilometers from any national border or 50 kilometers from any ocean, in Yucatan: Progreso, Telchac, Sisal, Celestún, Motul, Mérida, among others, are in the Restricted Zone.

HOW A FOREIGNER CAN BUY A PROPERTY LOCATED IN THE RESTRICTED ZONE?

The only two ways a Foreigner can buy a property or properties in the Restricted Zone are the following:

1. Through a Bank Trust (Fideicomiso);
2. Through a Mexican company.

THROUGH A BANK TRUST (FIDEICOMISO);

Characteristics:

1. The ownership of the property will be owned by the fiduciary (a bank).
2. The full enjoyment of the property will be enjoyed by the Foreigner(s).
3. The bank will follow the directions that the Foreigner gives it.
4. The only function of the bank is the administration of the trust.
5. The trust has a duration of 50 years but can be extended before it expires.
6. The Foreigner can establish a beneficiary of the Bank Trust in case of death.
7. Recommended if the Foreigner is going to live in the property.
8. The administration of the Trust generates annual fees to the bank.

Requirements:

1. Bank Trust application.
2. Mexican Ministry of Foreign Affairs permission.
3. It is done in a public deed and before a notary public.
4. Among others.

THROUGH A MEXICAN COMPANY

Characteristics:

1. A Mexican company with foreign investment can acquire directly a property in the Restricted Zone.
2. At least two persons (can be Foreigners) are needed to set up the company.
3. Can exist forever. 
4. Recommended if the property is going to be used for business.

Requirements:

1. Select a name for the company (authorization by the Mexican Ministry of Economy)
2. It is done in a public deed before a notary public;
3. The company must be registered in the Mexican Tax Office;

• The company must be registered in the National Registry of Foreign Investment;
• Monthly notices must be given to the Mexican Tax Office; and 
• Other documentation of The Foreigner.

GAP Legal® is a group of experts and professional Lawyers in Foreign Investment, Real Estate Law, Business Law, and Immigration with extensive experience who will give you the best legal advice for each particular case covering all the requirements and characteristics mentioned above. Contact us, we can help you!