Article 27 of the Political Constitution of the United Mexican States, section I, establishes that the Mexican government may grant the right to acquire ownership of the real estate to foreigners if they comply with a series of requirements, depending on the zone in which the real estate is located.

A. Real estate located in the restricted zone.

The restricted zone is located in a one-hundred-kilometer strip along the borders and fifty kilometers along the beaches.

B. Real estate located outside the restricted area.

On the other hand, real estate located outside the restricted zone refers to the other real estate located outside the area indicated in paragraph A.

C. Requirements for the acquisition of real estate located outside of the restricted zone.

All foreigners who intend to acquire real estate in Mexican territory outside of the restricted zone must present before the Ministry of Foreign Affairs ("SRE") a written document in which they agree to consider themselves as Mexicans and to renounce to invoke the protection of their Government, under the penalty, in case of failing to comply with the agreement, of losing the property they have acquired for the benefit of the Mexican Nation. Additionally, foreigners with whom their country of origin does not have diplomatic relations with Mexico must obtain the corresponding permit from this agency.

D. Requirements for the acquisition of real estate located outside of the restricted zone.

To carry out the acquisition of real estate located in a restricted zone, the acquisition can be made through certain types of transactions, among which we can mention: the bank trust and the incorporation of Mexican companies.

I. Incorporation of Mexican companies

To carry out the acquisition of real estate in the restricted zone, there is the possibility of incorporating a corporation, which may be incorporated by foreigners and administered by them. It is important to mention that the property or land to be acquired must not be for residential purposes.

II. Bank trust

A bank trust is a contract by means of which a person transfers the ownership of certain assets and rights to a banking institution, which oversees administering them for the benefit of previously designated third parties. In this sense, the bank acts as a trustee and intermediary between the buyer and the seller of the property. The bank retains title to the property, but you, as the buyer, are designated as the primary beneficiary and may have the enjoyment of the property. To do so, it is necessary to obtain a permit granted by the Mexican government, which is valid for a renewable period of 50 years.

 
How to choose the best trustee?

• Investigate all the fiduciary institutions that have a presence in the place where you want to buy the land or house.

• It is important to mention that if the trustee has a physical office in the locality it will help to speed up the procedures.

• Consider the comparison of prices and benefits, for example, the opening and cancellation costs.

At VILA we are experts in providing legal advice to our foreign clients in the acquisition of real estate in Mexico.

We remain at your disposal for any further assistance or questions related to the report.

 For more information please contact:

Luis Angel Sánchez

Luis.sanchez@vila.com.mx