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REAL ESTATE

How can I, as a non-Mexican, own property in Mexico?

History of rights as a foreigner

The simple answer is just like in the US or Canada in most of the country, and through a Mexican Bank Trust or a Mexican Corporation in the area around the coast.  The longer answer requires a bit of history.

Mexico has had 2 Revolutions, one in 1810 and one in 1910.  The one in 1810 was to break away from the Spanish, and the one in 1910 was to form a democracy.  The Mexican Constitution was drafted and passed into law in 1917 at the end of the second and last revolution.  Mexico has been a functioning democracy that guarantees the rights of all peoples since.  Just like in the US, the Constitution is the supreme law of the land in Mexico.    

In 1917 the world was a much different place than it is today.  The world was on the brink of WW1 and countries were suring up their borders.  For this reason the 1917 draft had a provision that allowed for a “restricted zone” of 100km (about 60 miles) from any boarder, and 50km (about 30 miles) from any coast. The idea was a foreign power could not come in, buy up all the coast and invade the country.  For its time, the provision made a lot of sense.    

But as time went on it became apparent that by restricting the rights of non-Mexicans, they were also restricting investment into the country .  This is what lead to what is today referred to as the “Trust Law” in 1970.  In an effort to promote foreign investment into the country, a bill was passed that stated that a trust, called a ‘Fideicomiso’ in Spanish, could be set up with the foreigner as the sole and exclusive beneficiary. This satisfies all the requirements of the Constitutional Provision, while still giving the beneficiary all rights to the real estate without restriction of the bank involved.  It was this single law that lead to Mexico’s first major round foreign investment boom in the country.  The resorts of Acapulco, Cancun, Puerto Vallarta and Cabo San Lucas all were a result of this new found investment security.  

The North American Free Trade Agreement (NAFTA)The North American Free Trade Agreement (NAFTA) was the next major step in investment security in Mexico.  Passed in 1994 the newest Bill stated there was no longer any restriction on owning a Mexican Corporation.  Any two individuals over the age of 18, regardless of their nationality, can fully own a Mexican Entity and all its assets.   

In addition to the confusion that results from the different types of corporations available to form (Limited Liability Corps, S-Corps, Partnerships, to name just a few), there are specific situations in which it is beneficial to own a property through a trust and when the benefits of a corporation are better.  The important item to note is with either vehicle, you are completely protected as long as the process is done properly, with guarantees going back to the 1917 Constitution.  This is how nearly every American Multinational Corporation has a presence in Mexico.