Fideicomiso: How to Buy Property in Mexico as a Foreigner?

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Did you know that the Fideicomiso is an easy way to buy a property in Mexico as a foreigner? A Fideicomiso is a Trust, where you’re the beneficiary, which means you get to use and enjoy your property just the way you like it. But wait, there’s more! You can also easily buy, sell, rent, and even pass down the property hassle-free.

 

One of the most incredible perks is that your investment stays safe and sound over time. How, you ask? Well, a trustworthy Mexican bank acts as your guardian, taking care of your best interests. They make sure all the legal and tax stuff is handled correctly, giving you immense peace of mind. So, don’t hesitate—dive into investment opportunities in Mexico with absolute confidence.

 

What is a Fideicomiso?

 

A Fideicomiso is a trust, where you (the trustor) hand over your property or rights to a trusted entity like a bank, and you become the beneficiary. It’s a smart and widely used way to handle assets, especially in real estate and financial dealings. The best part is that it offers you legal protection and control over your assets, ensuring they’re used according to your wishes, because, at the end of the day, you’re the one who benefits.

 

Imagine having a friendly legal “guardian” looking out for your assets and interests, making sure everything stays safe and sound – that’s exactly what a Fideicomiso is all about! This idea is applied in various situations, from financial investments to real estate deals and estate planning – all to keep your interests front and center!

 

What is a Fideicomiso de Zona Restringida?

 

In Mexico, there are various types of trusts, and the “Fideicomiso de Zona Restringida” (Restricted Zone Trust) is the legal arrangement that allows you, as a foreigner, to acquire properties in the “restricted zone,” which covers 50 kilometers along the coastlines and 100 kilometers along the borders, according to Mexican law, you can’t buy directly in these areas, but guess what? The trust comes to the rescue, making it all possible and hassle-free!

 

The Restricted Zone Trust is like a team of three:

  1. The Seller is the one who transfers the property.
  2. The Bank (trustee) is the one that manages the property.
  3. You, the foreign buyer (trustee), are the one who obtains the benefits.

 

Did you know that this type of trust is also used in many other countries? Such as Canada (Vancouver), Spain, Italy, Israel, Brazil, China, India, South Korea, Singapore, United Arab Emirates and many more. So, if you dream of having a property on the beautiful beaches of Mexico, the Fideicomiso makes it easy and safe for you!

 

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What are the Benefits of Buying a Property in Mexico with a Fideicomiso?

 

Stress-Free Legal Compliance

Well, first things first, let me tell you about Fideicomiso – they’re like your trusty sidekick when it comes to staying on the right side of Mexican laws in a super easy way. You know how sometimes as a foreigner, you might hit a roadblock when trying to buy property in those stunning coastal and border areas? No need to stress! The trust has your back, making it all perfectly legal and hassle-free.

 

Protection and Tranquility

You’ve got a trusty partner in a Mexican bank acting as your fiduciary, always there to watch out for your best interests. They’ve got your back throughout the entire journey, whether it’s making sure all the legal and tax stuff runs like a breeze or safeguarding your property rights. You’re in safe and capable hands, my friend!

 

Secure Long-Term Investment

Guess what? When it comes to buying, selling, renting, or even passing down your piece of paradise in Mexico, it’s a whole lot easier than you might think! Trusts are like your magic wand, giving you incredible flexibility and even some nifty tax perks that will make your financial picture shine while you savor every moment in your little slice of Mexican heaven.

 

Legal and Tax Benefits

These trusts allow you to acquire properties in restricted areas, all in line with Mexican law. They also provide significant tax advantages, such as lower tax withholding rates and efficient estate planning.

 

So what are you waiting for? Invest with confidence!

 

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What are the Requirements to Buy a Property in Mexico with a Fideicomiso?

 

  • Passport: You must present your passport to verify your identity.
  • Immigration Form: This can be the temporary or permanent resident visa, but it can also be the Forma Migratoria Multiple (FMM) or tourist card that you are given on the plane when you arrive in Mexico.
  • Proof of address: This can be a utility bill for electricity, water, telephone, gas, property tax, or bank statements. Date of issue not older than 3 months.
  • Unique Population Registration Code (CURP): You can obtain a CURP (Clave Única de Registro de Población) in Mexico if you do not already have one.
  • Federal Taxpayer Registry (RFC): You can obtain an RFC (Registro Federal de Contribuyentes) in Mexico if you do not already have one. This is necessary to comply with tax obligations.
  • Beneficiary Information: Full name and nationality of the substitute beneficiaries and their percentages.

 

What are the Documents and Procedures to Establish a Fideicomiso?

 

  • Purchase and Sale Agreement: A purchase and sale agreement is required between the seller and the buyer, which must be drafted by a lawyer specializing in real estate.
  • Trust Application: Choose an authorized trust bank in Mexico and apply to open the trust.
  • KYC Form: Duly filled out and signed.
  • Permit from the Ministry of Foreign Affairs (SRE): You must obtain a permit from SRE (Secretaría de Relaciones Exteriores) that authorizes the purchase.
  • Trust Deed: Once the permit is approved, the notary public will draft the trust deed, which will establish the terms and conditions of the trust.
  • Public Property Registry: The trust deed must be registered in the Registro Público de la Propiedad to guarantee legal validity.

 

How Much Does a Fideicomiso Cost?

 

The total cost of a Fideicomiso for you to buy property in Mexico may differ due to various factors, but typically, it includes three main parts, working together to make your property dreams come true:

 

  1. Permit from the Ministry of Foreign Affairs (SRE): It is paid only once.
  2. Trustee bank fees: The fees are a one-time payment to kickstart the trust.
  3. Trust Bank Annuity: It is an annual payment to keep the trust up and running. You’ll need to make this annual payment every year until the trust concludes. Just keep in mind that these costs might change based on the financial institution you decide to go with.

 

 

These are the 3 most popular banks to process your Restricted Zone Trust:

 

Banco del Bajio

  • Bank fees: USD 400.00 + VAT 16%
  • First annuity: USD 450.00 + VAT 16%
  • Permission of the Secretary of Foreign Relations (SRE): USD 1,214.00

 

 

Monex Grupo Financiero

  • Bank fees: USD 450.00 + VAT 16%
  • First annuity: USD 450.00 + VAT 16%
  • Permission of the Ministry of Foreign Affairs (SRE): MXN 25,700.00

 

 

Mifel Bank

  • Bank fees: USD 464.00
  • First annuity: USD 464.00
  • Permission of the Ministry of Foreign Affairs (SRE): MXN 26,125.00

 

 

Banorte Bank

  • Bank fees: $400.00 USD
  • First annuity: $400.00 USD
  • Permission of the Ministry of Foreign Affairs (SRE): $23,325.00 MXN

 

 

If you feel that you need a little more help in processing the Trust, you have the option of hiring a lawyer to assist you. Remember, it is not necessary to hire a lawyer since the bank can also help you in the process. The decision is in your hands: you can choose to have a lawyer by your side or continue with the assistance of the bank.

 

  • Attorney Fees: The costs of hiring a lawyer can vary depending on different factors that relate to your specific situation. This includes how complex your case is, where the property is located, its price, and the range of services you require. You’ll find that some lawyers offer packages that cover a wide array of tasks, such as researching the property, reviewing contracts, managing the Fideicomiso, assisting you during the signing of documents, providing translation assistance, and ensuring that all paperwork is properly recorded at the Public Registry. These packages typically begin at around $1,500 USD. It’s essential to understand that whether or not you decide to hire a lawyer is entirely your choice. Hiring one is not mandatory for processing the Fideicomiso.

 

 

What are the Steps to Buy a Property in Mexico with a Fideicomiso?

 

Here’s how you can navigate the process in a friendly and informative way:

 

  1. Start Your Property Search: Begin by searching for your perfect house or apartment. Work alongside a knowledgeable real estate agent who understands your needs and budget. Check out our article on How to Find a Real Estate Agent and Why I Need One
  2. Make Your Investment Choice: Once you’ve found your dream place, it’s time to present an offer to the seller.
  3. Secure with a Deposit: To reserve the property and secure it for yourself, you’ll typically need to make an initial deposit, which is generally around USD 5,000.
  4. Sign the Contract: Take your time to carefully review the terms and conditions outlined in the sales contract.
  5. Apply for Your Fideicomiso: Select an approved trust bank in Mexico to open your trust. The bank will act as the custodian, while you’ll be the beneficiary.
  6. Get Your SRE Permit: As a foreigner, acquiring properties in restricted areas requires a permit from the Ministry of Foreign Affairs (SRE).
  7. Complete the Payment: Ensure you make the full payment to the seller to successfully close the transaction.
  8. Sign the Deed: Once you’ve obtained the necessary permissions, sign the trust deed in the presence of a notary public. This important document will be registered in the Public Property Registry.
  9. Trust Administration: Let the trust bank handle the management of the Fideicomiso, ensuring compliance with all tax and legal obligations throughout the agreed-upon period.

 

Remember, this journey is all about finding your ideal property, and we’re here to help you every step of the way!

 

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Frequently Asked Questions about Fideicomiso to Buy Properties in Mexico

 

  • How does the Fideicomiso work?
    The trust bank acts as the legal owner of the property, while the foreign investor is the beneficiary, ensuring that it has control and enjoyment of the property.

 

  • Why do I need a Fideicomiso to buy property in Mexico?
    The Mexican Constitution prohibits foreigners from purchasing property in coastal and border areas. The Fideicomiso allows foreigners to acquire the rights to property in a restricted area.

 

  • Why does Mexican law prohibit foreigners from buying properties directly in coastal and border areas?
    The law in Mexico takes care of the country’s sovereignty, especially in sensitive places such as coasts and borders. It does not allow foreigners to buy property directly here to maintain control over land and resources.

 

  • How long does it take to obtain a Fideicomiso to buy properties in Mexico?
    The process of obtaining a Fideicomiso to purchase property in Mexico can take between 2 and 4 weeks.

 

  • What is the duration of a Fideicomiso?
    Initially, 50 years, renewable indefinitely. Many investors consider this sufficient for their purposes.

 

  • Can I sell or bequeath the property in the Fideicomiso?
    Yes, you can sell it, bequeath it to heirs, or transfer it to another person, always following the appropriate legal procedures.

 

  • Can I rent my property in Mexico?
    Yes, you can rent your property in Mexico, you can do it long, medium, and short-term. You can also benefit from vacation rentals.

 

  • What happens to the Fideicomiso if a foreigner dies?
    In the event of the death of the foreigner, the beneficiaries of the Fideicomiso will be the legal heirs of the foreigner.

 

  • What happens if a trust bank goes bankrupt?
    In the event of bankruptcy of a trust bank, the assets in the Fideicomiso will be transferred to another trust bank.

 

  • Who can help me with the Fideicomiso process to buy properties in Mexico?
    You’ll have a bank to assist you through the process, and having a real estate attorney who specializes in property law can be quite handy. No need to worry, your real estate advisor will gladly recommend the most experienced banks and trust lawyers. Plus, your real estate agent will be there to gather quotes for you, making it easier to select the best option that suits your needs.

 

How to Avoid Dangers and Fraud in Fideicomiso?

 

Even though Fideicomisos are pretty darn secure, it’s always wise to keep an eye out for potential hiccups in any financial deal. Let’s chat about a few things to keep in mind:

 

  • Watch Out for Scams and Counterfeits: It’s essential to be cautious about potential scams and counterfeit sellers. Take your time to do thorough research and verify all transactions.
  • Choose a Trustworthy Trust Bank: Selecting a reliable bank is crucial. Issues with the bank can lead to delays or complications, so it’s a key decision.
  • Ensure a Solid Contract: Having a well-structured contract is vital to prevent costly disputes down the road.
  • Prioritize Transparency: Always ensure that everything is transparent and in compliance with the law. Seek legal and financial advice when needed; it can be immensely helpful.
  • Stay Informed About Legal Changes: Keep in mind that laws can change over time. Stay informed about any changes that may impact your property.

 

With the right guidance, you can easily steer clear of these potential risks and fully enjoy your real estate investment in Mexico with peace of mind.

 

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What are Other Ways to Acquire Properties in Mexico?

 

Apart from the restricted zone trust, foreigners have other alternatives to buy property in Mexico:

 

Buying Property Outside Restricted Areas

You, as a foreigner, have the option to purchase property in areas that are not restricted zones without the need for a trust. This means you can directly own the property. Just make sure to confirm that the location falls outside the restricted areas as defined by Mexican law.

 

Consider Establishing a Mexican Company

Some foreigners opt to establish a Mexican company to acquire and own property. In this scenario, the company becomes the property owner, and you, as a foreigner, have control over the company. Keep in mind that this approach can be a bit more intricate and comes with additional tax and legal responsibilities.

 

Explore a Management Trust Option

While not as common as the restricted zone trust (Fideicomiso de Zona Restringida), some foreigners use a management trust (Fideicomiso de Administración) for property purchases. With this arrangement, you maintain a certain level of control over the property and can make management decisions, although you don’t acquire direct property rights.

 

The choice you make will depend on your personal preferences, investment goals, and the property’s location. It’s crucial to seek advice from local legal and financial experts before making a decision. This way, you’ll gain a clear understanding of the requirements and implications associated with each option.

 

Fideicomiso in the Riviera Maya: Investment Opportunities

 

Have you ever thought about exploring the stunning Mexican Caribbean coast? Well, now’s your chance! The Riviera Maya beckons with its captivating allure. You’ll find popular destinations like Tulum, Playa del Carmen, Akumal, and Puerto Aventuras, not to mention the proximity to Cancun, Cozumel, Puerto Morelos, Bacalar, and Mahahual.

 

These places are renowned for their idyllic beaches, vibrant culture, and guess what? They’re also at the heart of a booming real estate market. Curious about why you should consider investing here?

 

Endless Investment Opportunities

In the Riviera Maya, opportunities abound. Whether you’re eyeing luxurious beachfront condos, exclusive residential projects, or premier resort developments, there’s something tailor-made for your dreams.

 

Thriving Tourism Scene

Picture this: a surging tourism industry that fuels a robust rental market. That’s right! The demand for rental properties continues to soar, translating into fantastic income potential for savvy investors. Investing in the Riviera Maya’s real estate is like tapping into an ever-growing stream of opportunities.

 

Stability and Legal Perks

Mexico offers not just breathtaking landscapes but also political and economic stability. Add to that the legal and tax benefits that trusts provide, making your investment even more enticing and secure.

 

So, are you ready to dive into this exciting journey? The Riviera Maya welcomes you with open arms!

 

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Meet Some Real-Life Success Stories in the Riviera Maya

 

Cindy & Brian – Living the Dream

Imagine being retired and living your dream by the Caribbean coast! That’s exactly what Cindy and Brian, US retirees, did. After thorough research, they decided to invest in a beachfront property in the Riviera Maya. They used a Fideicomiso to turn their dream into reality. Now, they enjoy their Caribbean paradise during retirement and, when they’re not there, they rent out their property, bringing in that extra income that adds a touch of luxury to their lives.

 

Harry – Canadian Investor Extraordinaire

Harry, a savvy Canadian investor, made his move by purchasing a house in Playa del Carmen through a Fideicomiso. Not only does he cherish quality vacation time with his family there, but he also rents it out to tourists. Over time, the value of his property soared, and when the right opportunity came knocking, Harry sold it at a substantial profit, taking full advantage of the tax benefits offered by the Fideicomiso.

 

Monica – Turning Savings into Success

Monica, a Spanish investor with an eye for opportunity, decided to invest her savings in the Riviera Maya. She secured an apartment in Tulum during the pre-sale phase through a Fideicomiso. Her investment turned out to be a smashing success. Just two years later, her unit was worth nearly double its initial value, and the vibrant tourism scene in the area provided her with a steady stream of vacation rental income.

 

These are just a few examples of how real people have found their own success stories in the Riviera Maya. It’s not just a dream; it can be your reality too!

 

Closing Thoughts

 

We’re delighted that this guide has been a valuable companion on your journey to acquire property in Mexico via Fideicomiso! Together, we’ve delved into crucial topics such as legalities, taxes, finances, and we’ve provided essential insights to help you navigate the world of trust-related transactions while avoiding potential pitfalls.

 

In this Guide for Buying Property in Mexico through Fideicomiso, we’ve also shared the benefits, prerequisites, and costs, addressing frequently asked questions that foreign investors often ponder.

 

Now, it’s time for you to embark on your exciting adventure exploring incredible investment opportunities in this stunning country. Remember, connecting with seasoned experts can provide you with invaluable insights and confidence in your decisions. And if you are considering investing in real estate in Playa del Carmen, Tulum, Cancun, or any destination in the Riviera Maya and its surroundings, guess what? Plalla Real Estate is right here, ready to support you in turning your property dreams into reality.”

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Did you know that property taxes in Mexico are much lower than in your country?

 

We’d love to hear from you! If you have any comments, doubts, or questions, please don’t hesitate to share them in the comments section below. We’re here to assist and guide you.

If you found this article helpful, feel free to share it on your favorite social networks or send it via email or WhatsApp to your family and friends! Thank you so much for your support, and remember, we are Plalla Real Estate. 🙂

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