If you’re considering buying property in Mexico, especially in the coastal and border regions, you’ll need to understand the Fideicomiso or Bank Trust system. Since Mexican law restricts foreigners from directly owning land in restricted zones (within 50 km of coastlines and 100 km of borders), a Fideicomiso enables foreign buyers to securely invest in Mexican real estate.
What Is a Fideicomiso?
A Fideicomiso is a renewable 50-year bank trust that allows non-Mexican citizens to acquire rights over properties in restricted zones while ensuring ownership is legally recognized. Although technically held by a Mexican bank, this setup grants the buyer full property rights to enjoy, lease, and even sell the property as desired.
Benefits of a Fideicomiso:
- Ownership in Restricted Zones: Allows foreign ownership in Mexican coastal and border areas.
- Flexible Rights: Grants control, rights to lease, remodel, and sell without limitations.
- Renewable Term: Provides renewable 50-year terms for long-term security.
How Does a Fideicomiso Work?
When a foreign buyer finds a property within restricted zones, they appoint a Mexican bank as trustee to hold the property title on their behalf. Here’s how it works step-by-step:
- Selecting a Property: Find a property that suits your needs in the restricted zone.
- Establishing the Trust: With assistance from a local notary, the buyer and bank create the Fideicomiso agreement.
- Trustee Responsibilities: The bank serves as trustee, holding the title while giving the buyer beneficiary rights.
- Beneficiary Rights: As the primary beneficiary, the buyer has complete control over the property’s use.
- Transfer and Renewal: The trust can be transferred or renewed as needed.
Costs of Setting Up and Maintaining a Fideicomiso
Setting up a Fideicomiso involves initial fees (typically between $500 to $1,000) and annual maintenance fees that range from $500 to $2,000, depending on the bank and property value. It’s recommended to consult with a local real estate expert to understand these costs in your specific area.
FAQ: Common Questions about the Fideicomiso
- Can the trust be transferred to my heirs?
Yes, you can designate beneficiaries within the Fideicomiso, allowing them to inherit your property. - How long does a Fideicomiso last?
A Fideicomiso lasts 50 years and can be renewed indefinitely for an additional 50 years. - What happens if I want to sell my property?
As a beneficiary, you can sell the property at any time. The buyer (foreign or Mexican) will simply need to assume the existing Fideicomiso or establish a new one. - What rights does the bank have over my property?
The bank holds the title solely as a trustee and cannot take action on the property without your permission.
Why a Fideicomiso Is Essential for Foreign Investors
A Fideicomiso allows investors to enjoy all the benefits of property ownership in Mexico’s most desirable regions. It offers legal security, operational flexibility, and peace of mind to buyers while helping Mexico’s real estate sector flourish.
Contact Us to Learn More About the Fideicomiso Process
At V Luxury Real Estate, we specialize in guiding foreign investors through the Fideicomiso process. Contact us to explore property opportunities in Mexico’s restricted zones and to learn more about establishing a secure Fideicomiso for your next investment.
