|
|
|
|
Mailing Address
|
HOW FOREIGNERS CAN OWN
ALTERNATIVES
It is a common misconception that foreigners cannot own real estate in Mexico, but reality is that they can. However, there is a restrictive zone, as described below, and we have to consider the following alternatives:
Outside the restricted zone, a foreigner or foreign corporation can acquire any type of real estate as any Mexican national, holding the property as a direct owner complying with Mexican law.
Within the restricted zone, a foreigner or foreign corporation may obtain all the rights of ownership but it must be in a bank trust, known as fideicomiso.
Another alternative is to purchase non-residential property through a Mexican corporation which can be, under certain conditions, 100% foreign-owned, with a provision in its by-laws that the foreigner accept to be subjected to Mexican laws and agree not to be invoke the laws of their own country.
Also, the real estate required is to be registered with the foreign affairs ministry and is used for non-residential activities. In other words, under said conditions, foreigners can acquire, directly, properties destined for tourist, commercial and industrial use.
THE RESTRICTED ZONE
The Mexican constitution regulates the ownership of the lands established that "…in zone of 100 kilometers along the border or 50 kilometers along the coast, a foreign cannot acquire a direct ownership of the land". These areas are known as the "restricted or prohibited zones". Nevertheless, the latest Mexican foreign investment law, which became law on December 28, 1993, makes allowances mentioned above.
FIDEICOMISO OR BANK TRUST
Any foreigner or Mexican national can constitute a fideicomiso (the equivalent of an American beneficial trust) through a Mexican bank in order to purchase real estate anywhere in Mexico, including the restricted zone, to do so, the buyer requests a Mexican bank of his/her choice to act as a trustee on his/her behalf.
The bank, as a matter as a normal course, obtains the permit from the ministry of foreign affairs to acquire the chosen property in trust. The fideicomiso can be established or the maximum term of 50 years and can be automatically renewed for another 50- year period.
During this periods you have the right to transfer the title to any other party, including a member of your family.
The bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary who has all the benefits of a direct owner, including the possibility of leasing or transferring his/her rights to the property to a third party or to a preappointed heir. During this period, the foreigner is considered as a Mexican national.
The trustee is responsible to the buyer/beneficiary to ensure precise fulfillment to the trust, according to Mexican law, assuming full technical, legal and administrative supervision in order to protect the interest to the buyer/beneficiary. Fideicomisos are not held by the trustee as an asset of the bank.
For practical purposes, even in unrestricted zones many foreigners, and Mexican Nationals for that matter, prefer to hold their property under a fideicomiso.
THE REAL ESTATE INDUSTRY
The real estate industry in Mexico is similar in many ways when compared to that of the united estates, which is most probably the most advanced in the world. It is developing quickly, taking advantage of today's technology. However, Mexico seems to be paralleling the system as it exists in the U.S.
The only national professional real estate organization in Mexico is the "Asociacion Mexicana de Profesionales Inmobiliarios" or A.M.P.I. (Mexican Association of Real Estate Professionals) with 24 chapters in 398 cities. This organization is somewhat similar to the national association of realtors (NAR) in the United States.
LICENSING
As this time, there are no government license laws regulating real estate brokerage and sales in Mexico. Anybody can, in effect, offer properties for sale and, therefore, caution should be taken to search out for an established and reputable real estate company. A potential buyer may want to check with the local Chamber of Commerce Associations or prominent law firm.
ESCROW, TITLE INSURANCE AND HOME INSURANCE
It is the Notario Publico who, in effect, acts as a "holding agent" for the involved parties and for this reason there are few escrow companies in Mexico.
At the present time there is no general use of title insurance in Mexico, although some American companies are providing coverage in some resort areas of the country. On the other hand, insurance companies do provide full home coverage- throughout Mexico.
DON'T BE AFRAID TO INVEST IN MEXICO, WE ARE ONE OF THE MOST SECURED COUNTRIES IN ALL THE WORLD DUE TO OUR POLITICAL STABILITY.
|
|
