Foreign individuals and legal entities can freely purchase any real estate in Mexico. And then rent it out and receive income.
There is only one restriction. Foreigners cannot directly own real estate in the area closer than 100 km from the state border and closer than 50 km from the coast. However, there is a legal way to circumvent the ban. By opening a trust in a Mexican bank, any foreign buyer can become the owner of a house or apartment near the beach.
According to Article 27 of the Mexican Constitution, adopted in 1917, the restrictions were introduced to protect the territory in the event of intervention.
Mexico is very loyal to foreigners. It is interested in foreign capital. Therefore, on December 28, 1993, the Law on Foreign Investment (la Ley de Inversión Extranjera de México) was adopted, protecting the rights of foreigners in restricted areas. It guarantees safe and legal ownership of real estate through a bank trust (fideicomiso).
Fideicomiso is a power of attorney that gives the right to manage property. According to the terms of the transaction, the certificate of ownership is kept by the bank, but the buyer is still the full owner of the purchased property.
There are three parties involved in the process: the seller, the actual buyer, and a third party to whom the property will be registered. Officially, their names are:
- Fedeicomitente (seller)
- Fiduciario (nominal buyer)
- Fideicomisario (actual buyer)
In other words, the buyer, or fideicomisario, will invest his money through a third party, or fiduciario. The fiduciario is obliged to follow the buyer’s instructions and, if he so desires, purchase the property from the fedeicomitente, that is, the seller.
A realtor is responsible for the registration of a fideicomiso bank trust. The buyer can choose a bank. The registration period is one to two months.