When a foreigner plans to acquire a property in Mexico, the first thing to know is that it is completely safe and that over the years the purchasing process has been simplified by the Mexican government. In this investment guide, the process is clearly explained so that you do not have any doubt about it.

The first thing you should know is that in Mexico there are restricted areas, which is the land from the Mexican border to 61 miles (100km) inland or the land from the coast to 30.5 miles (50km), inland. Do not be misled by the denomination of these lands, a foreigner can acquire real estate within them through a trust or Mexican corporations, this is what the word “restricted” refers to. Outside the restricted areas, a foreigner can directly acquire their properties, that is, they can deed under their personal name without the need for a trust or a corporation.

The purchase with a Trust (Fideicomiso) is made through a bank. A trust is a real estate trustee that is held under your name in a Mexican bank that is registered with the fiduciary office. The bank acts as the fiduciary, keeping title to the property in its name and only fulfills the job of administrator, which represents another additional protection for the buyer.

The foreign investor is the beneficiary of the trust and, therefore, of the property. Only the beneficiary has the rights and absolute control over the property, being able to enjoy it, lease it, improve it, mortgage it or sell it, within the parameters of Mexican legislation. In no case the bank owns the trust or, therefore, the property. In this way your property is not exposed to legal problems in which the bank can be found. In addition, banks in Mexico are protected by the Mexican government in case of bankruptcy. The trust is indirectly guaranteed by the Mexican Government.

The notary public is a key player in the transaction. Its most important function is to ratify the real estate transactions that are carried out in Mexico and must document the transaction in the Public Registry and the Cadastral Office. Without this the operation is not valid. That is, the notary ensures the legality of transference of title. In addition, it deals with the authentication of documents, the search for title deeds and deeds, the calculation and collection of taxes and request and collect all the corresponding permits among other things.

Trusts in Mexico are quite similar to those in the United States of America and Canada. It is not a lease, the beneficiary has the same “property” rights as in those countries. They are valid for 50 years, and are easily renewable for another 50 years as many times as necessary through the payment of a fee. You should also know that the Mexican State will never expropriate your property, since this is regulated in the Free Trade Agreement (NAFTA). There is only one strange exception, in the event that the government needs the land for public civil works, in which case the government will pay a current price for the land (Eminent Domain in the US, Compulsory Purchase in the UK or Expropriation in Canada).

The second way that a foreigner can to buy property in the restricted area is by creating a Mexican Corporation. It is important to keep in mind that it applies only for the purchase of non-residential properties. Foreigners can follow this path, even creating corporations with 100% foreign ownership, following some conditions, such as the acceptance of foreigners to be governed by the Mexican Laws and register the property as non-residential in the Secretariat of Foreign Relations.

As for the trust, the notary public is a key player in the transaction. Its function is the same as for the trust, to ensure the legality of transfer of the property title of the real estate (ratify real estate transactions, document the transaction, etc.). In addition to dealing with the transfer of the title, it also deals with all the legality related to the creation of the Corporation.