How does a Foreigner acquires a property in Mexico
Mexican legislation
The Mexican constitution prohibits the foreigners to directly acquire a
land or property within a limit of 100 kilometers (62 miles) of any
border and 50 kilometers (31 miles) of any coast; these regions are
known like “restricted areas”
The law promotes Mexican investment and foreign investment
The intention of this one law is to promote Mexican investments as much
foreign; this motivates to that it exists a development of justice and
balance in the consolidation of economic independence of the country. It
specifies like and towards where the capital must participate; thanks to
the establishment of a trust, the foreigners can buy real estate
destined for the industrial and tourist activities.
Investment in Real estate
For the benefit and security of the foreigners, hoping to invest in real
estate located in the borders or the coasts, the government decided to
make to a side the several escapes that have been used in the past
omitting the constitutional restrictions. Most common of these escapes,
which put into play other foreign investments, they were the Mexican
interpositions only in legal name and fictitious contracts or other
instruments.
The government will take action on these methods, but he will guarantee,
the protection to the foreigner who, through trust, can invest in real
estate in restricted areas under the conditions of the law before
mentioned.
Intervention of the Trusts
Through the Secretariat of Outer Relations, the federal government,
after hearing the recommendation of the institution in charge to study
the economic and social implications of the specific project to which
the law talks about can authorize to the trust to act like
administrators in acquiring the real estate properties where the
foreigners are the beneficiaries.
Industrial and Tourist development
The intention in these agreements is to accelerate the industrial and
tourist development in the border zones and the coast according to the
Mexican constitution.
The law approves that the trusts can acquire earth in these restricted
areas acting like fiduciary to benefit the foreigners if is used with
aims of industrial or tourist activity.
As the trusts work
When a foreigner wishes to acquire the right of use and operation of a
property, he can choose to any banking institution for the purchase and
conservation of the same one in a trust by a period of 50 years, as long
as he is allowed by the Secretariat of Outer Relations.
Possession of the Property and Rights of the Beneficiary
At the time of which a property with trust is acquired, the bank becomes
the legal, subject owner to the clauses of the contract guaranteeing to
the beneficiary the right to use, to operate, to rent or to sell the
property.
If the beneficiary dies during the legal period of the contract of the
trust, the beneficiary must right to indicate to one or several
substitutes who will receive the rights and obligations that are born of
the contract of the trust.
Renovation of the Trust
At the end of the period of the trust, which, since it has been
mentioned previously, lasts 50 years, the beneficiary has the following
options:
a) If there are no changes in the present policies of the Mexican
government, is possible that the renovation of this contract is carried
out by a period of additional time of more than 50 years. In case that
the authorities do not approve this extension, the trust will have to
occur by ended up selling the property.
b) Without concerning the result of the alternatives, the interests of
the beneficiary suitably will be protected. It must of being remarked to
the beneficiary, who at any time during the period of the contract or to
its term, can sell the property to any person legally described for the
purchase as real estate.
Structure of the Trust
1. - Fideicomitente: He is the proprietor of the building, that
contributes of irrevocable way and without reserving to no right the
property of the building, free of burdens and to the current in all the
inherent payments to he himself.
2. - Fiduciary: It is the banking institution that will be in charge of
administering and watching the actions of the Trustee or Beneficiary.
3. - Trustee (Beneficiary): She is the person who is going to buy the
building, to title only of the rights of use and advantage of the
building during the term of use of the trust.
Required documents
1. - Title of Property properly enrolled in the Public registry of the
Property, certificate of freedom of burden, estimate.
2. - Map of location of the Property
3. - Receipts of Payments
4. - Permission of the Secretary of Outer relations, who is obtained by
the banking institution.