Buying in Mexico

What is a Mexico Bank Trust, Fideicomiso

A fideicomiso is a bank trust agreement that allows foreigners to buy property in Mexico's restricted zones. The bank acts as the trustee, managing the property for the benefit of the buyer, who is named the primary beneficiary. The beneficiary can use, modify, rent, or sell the property and keep all profits. The trust is renewable every 50 years

In 1973, the Mexican government approved a law called Foreign Investment Law.

This law would recognize the Mexican coastline as a great economic asset and a way to get foreign funding to these regions.

Because of this, foreign legal ownership of property was banned, creating the Restricted Zone.

In 1989, the government modified the law to allow foreigners ownership in the area, through the fideicomiso.

The restricted zone refers to any area within 31 miles of a Mexican shoreline or 62 miles of a bordering country, as stated by Mexican law.

The process of setting up a fideicomiso is relatively straightforward and can be done with the help of a real estate agent. Here are some steps to take:

1. Select an approved trust bank in Mexico

2. Apply for the fideicomiso

3. Obtain an SRE permit from the Ministry of Foreign Affairs 

1) Non-Mexicans CAN OWN property within the Restricted zone if for residential purposes using a Mexico Bank Real Estate Trust

2) Non-Mexicans CAN OWN property within the Restriced zone if for non-residential purposes using a Mexican Corporation

*Please note, non-Mexicans can invest and own 100% of a Mexican Corporation The Mexican Corporation requires a minimum of 2 shareholders (both can be foreign), only a few minute industries do not allow 100% foreign ownership such as the oil industry and communication.

The fideicomiso is an agreement set up between the Mexican foreign buyer and a Mexican bank. The bank acts on behalf of the buyer The bank will have title, but has a fiduciary obligation to follow the directions and wishes of the foreign buyer The non-Mexican buyer can enjoy, use, rent out, improve upon the property, expand, build and sell the Mexico Real Estate and reap 100% of the profits

other facts:

fideicomitente = seller of the property

fiduciary = the bank acting as the trustee and holder of the title

fideicomisario = beneficiary of the property

Term of 50 years, and it is renewable for another 50 year term second beneficiaries can be established within the trust to establish automatic inheritance of the property in case of deaths of the first beneficiaries

The buyer, can choose which banks he wishes to establish his Bank Trust There are various multi-national banks in Mexico including Intercam, Autofin, Monex, etc… Annual fees are aprox $450 to $550 usd per year.

One last note which will be covered in further depth at a later post, in regards to Non-Mexicans buying property outside of the Restricted Zone Mexico Real Estate Bank Trusts are not needed in these regions and property can be held simple and straight title.