Yes! you can purchase purchase property in Mexico as a foreigner under a well established and secure process.
THE RESTRICTED ZONE
The Mexican Constitution regulates the ownership of land and establishes that “… in a zone of 100 kilometers along a National border or 50 kilometers along the coast, a foreigner cannot acquire the direct ownership of ‘land’.” These areas are know as “Restricted or Prohibited Zones”.
Nevertheless, the latest Mexican Foreign Investment Law, which became effective on December 28, 1993, makes for the allowances mentioned bellow:
HOW FOREIGNER’S CAN OWN
REAL ESTATE IN MEXICO
It is a common misconception that foreigners cannot own Real Estate in Mexico, but in actuality, a foreigner can. There is a restrictive zone, as described above, and thus we have to consider the following alternatives: Outside the Restricted Zone, a foreigner or foreign corporation can acquire any type of real estate asset with the same rights as held by Mexican National, acquiring the property with direct ownership and complying with Mexican law.
Within the Restricted Zone, a foreigner or foreign corporation may obtain all the rights of ownership but the real estate asset must be purchased and held within a bank trust, better known as Fideicomiso.
A second alternative, is to purchase non-residential property through a Mexican corporation which can, under certain conditions, be 100% foreign-owned, with a provision in it’s by-laws that the foreigners owners are subject to Mexican laws and agree not to invoke the laws of their own country. Additionally, the real estate purchased must be registered with the Ministry of Foreign Affairs and can only be used for non-residential purposes.
It is under these two scenario that foreigners may purchase, use and sell Mexican real estate assets.
THE FIDEICOMISO OR BANK TRUST
A foreigner or Mexican National ca establish a Fideicomiso(the equivalent to an American beneficial trust) through a local Mexican bank in order to purchase real estate anywhere in Mexico, including the Restricted Zone. To do so, the buyer requests a Mexican bank of his/her choice to act as a trustor on it’s behalf. The bank chosen then obtains a permit from the Ministry of Foreign Affairs to acquire the chosen property in trust.
The Fideicomiso can be established for a maximum term of 50 years and can be automatically renewed for another 50-year period. During these periods the owner has the right to transfer the title to any other party, including a member of their family. The bank becomes the ‘legal manager’ of the property for the exclusive use of the buyer/beneficiary who has the full powers of a direct owner, including the ability to lease, sell or transfer their rights of the property to a third party or to a pre-appointed heir.
During this period, a foreigner is considered as a Mexican National. The Fiduciary (bank) is responsible of the foreigner’s (buyer/beneficiary) to ensure precise fulfillment of the trust instructions, within Mexican Law, assuming full technical, legal, and administrative supervision in order to protect the interests of the foreigner (buyer/beneficiary). Fideicomisos are not held by the fiduciary (bank) as an asset of the bank. For transactions purposes, even in unrestricted zones many foreigners and Mexican national, prefer to hold their properties within a Fideicomiso.
1
OFFER TO PURCHASE
Your realtor will elaborate the offer to purchase and will share It with
seller to start negotiation.
Once accepted will follow to step 2
2
DUE DILIGENCE
Request legal documentation from seller to revise in Public Registry
of the property to ensure that the property is up to date, the seller is
the holder of the title and does not have any:
- Lien
- Property Tax Debt
- Mortgage
- HOA fees
- Creditors
3
ELABORATION OF TRUST COMMITMENT AGREEMENT
The Trust Commitment Agreement will be made to make sure that
the operation is in equality and that it provides the legal certainty to
our client, making sure every aspect of the offer to purchase is
included.
4
ESCROW ACCOUNT
An escrow account will be opened to ensure both parties security
and that every aspect of the Trust Aommitment Agreement is
fulfilled by both sides before the dispersion of funds.
5
CONTACT WITH FIDUCIARY
We will establish direct contact to ensure the foreign affairs permit is
correct and that the operation keeps on following the terms and
conditions from the Trust Commitment Agreement.
6
WORK ALONGSIDE THE NOTARY
Elaborate the draft for the Trust (Final deed) and make sure the
notary has all the information and documents necessary from the
property, seller and buyer.
7
REGISTRATION OF FINAL DEED
Punctual follow up with the notary and Public Registry of the
Property to have the final deed registerd under the buyers name in
the least time possible.