frequently asked questions

The Mexican Foreign Investment Law allows foreigners to acquire residential properties in Restricted Zones -100 km within any border of Mexico and 50 kilometers within any coastline- through a banking instrument called Trust, administered through a Mexican bank. By amending the 1993 law, the term of the Trust was extended from 30 to 50 years, with renewal, at the request of the owner (s) of the Trust, before its expiration.

It is one of the most dynamic legal instruments in Mexico; The Trust is the document used to settle the acquisition of a property with a Bank Trustee. Article 27 of the Mexican Constitution grants the Mexican nation ownership of land and water in national territory, and through Section I, it grants discretionary power to the State to give the same right to foreigners. The property remains in the hands of a bank, which is designated as the beneficial owner of the Trust. This is subject to foreigners, in order not to invoke the protection of their governments of origin and consider them as Mexican citizens with respect to the property acquired.

It is an important link between the foreigner and the government. The bank accepts full technical, legal and administrative responsibility, and protects the interests of the beneficiary. While the bank is technically the owner, it has legal responsibility to issue instructions to the beneficiary regarding the property. Therefore, the control of the property is in your hands, not in the bank.

The beneficiary can occupy the property for the life of the Trust.

The property title may be transferred to foreign beneficiaries, in the event that the latter acquires legal capacity to possess said assets, or to any legally qualified person designated by the latter.

The Trust can also be inherited to your family, by naming replacement beneficiaries in the event of death.

As a beneficiary you can occupy, use, sell, rent and build, or improve the property. You can also mortgage the assets and instruct the Bank to transfer the property title to another person or civil society.

Beneficiaries are authorized to modify their construction, according to local regulations, (allowed at the owner’s expense).

The Settlor (Seller)

The Trustee (A Mexican Bank): acts on behalf of the foreign beneficiaries in all transactions of the assets of the “Trust”.

The Trustee-Beneficiary (The Buyer): reserves the use and control of the property and has the right to use, improve, lease or rent without limitations, and sell without restrictions, or transfer the property in the names of the heirs.

Substitutes of the Trustee-Beneficiary (The Heirs).

When the property is held in an existing Trust, the transfer of trustee-beneficiary rights to the property is generally through an Assignment of Rights under the same Trust. The buyer acquires the rights of the seller to hold the title of Trust for the real estate property. The seller must make a contact with the appointed Trustee about the existing Trust, in order to follow the correct procedures and requirements, until it is legally established.

It gives you all property rights such as the right to occupy, use, sell, rent, and build or improve the property. They can also mortgage real estate and instruct the Bank to transfer the property title to another person or company. You will be required to pay property taxes, utilities, condominium maintenance fees where applicable, and the Trustee’s annual fee, which varies from bank to bank.

The Assigning Trustee (Seller)

The Trustee previously designated in the Trust (A Mexican Bank)

The Assignee Trustee (Buyer)

The Substitute Transferee Trustees (The Heirs)

A valid passport and a Mexico INM immigration visa (FM-I Tourist Visa, FM3 or FM2) are required as proof of identity. You must take these documents with you when signing the Trust Agreement / Assignment of Rights before the Notary Public in Mexico.

No, none of them can be used as valid identification.

Apostilles authenticate the seals and signatures of officials on public documents such as birth certificates, court orders or any other document issued by a federal agency or certified by a US or foreign consul in order to be used legally in Mexico.

For more information you can consult:

https://www.gob.mx/sre/acciones-y-programas/apostilla-de-documentos-8029

To designate an LLC, it is necessary to present a copy of the articles of incorporation, a certificate of existence-validity of the state and the operating manual of the LLC; All documents must be notarized and “apostilled”. The legal representative of the LLC must also present a copy of their passport and business visa issued by the Mexican immigration office INM.

Although the Ministry of Foreign Affairs will grant permission under the name of a Family Trust established in the United States, the creation of a Trust in these terms is not recommended by virtue of the differences between the practice of Mexican laws on the US laws Another reason why it is not advisable to establish the Family Trust incorporated in the US is because its contents would only be under US jurisdiction, with which we are not familiar, and would not have no validation in Mexican law.

If the property is sold to a Mexican, the Trust can end and the property can be acquired directly through a Total Extinction of the Trust.

The Beneficiary / Assignee will have the right to designate a substitute beneficiary (s), who will receive all the rights and obligations arising from the Trust if the Beneficiary dies. Heirs will not have to go through probate proceedings in the US or Mexican courts. All heirs would have to provide the Bank / Trustee with a copy of valid identification. In addition, they must accompany the identification with the death certificate of the Beneficiary, notarized and apostilled. The Bank will register them internally, as the new beneficiaries of the trust at no cost.

A real estate transaction generates expenses for both parties (seller and buyer), such as acquisition and income tax, broker commissions, evaluation and registration, deed expenses and legal costs, among others. These rates are based on the value of the property and must be estimated by the appointed notary, also based on the agreements made with all parties involved.

It is common practice for the buyer to pay the domain transfer tax and closing costs, including the Notary’s fees and expenses, while the seller pays the income tax and the broker’s commission.

The Trust will be in Spanish. In order to obtain a translation from the Trust you would have to request the services of an expert legal translator / interpreter.

Yes, once it has been duly registered in the Public Property Registry, you will receive an original copy of the document.

Once the seller and buyer have submitted all the previously discussed requirements, first, the bank must obtain the Trust’s permission from the Ministry of Foreign Relations in Mexico City, which will take 15 days. The Bank will send it to a Mexican notary public so that the Trust contract can be drawn up and thus, when it is reviewed and approved by all parties, the notary public will inform all parties when it is ready to be signed, indicating the final closing costs. . Once it is signed by all parties, the notary receives the necessary documents (bank appraisal of property, certificate of freedom from encumbrances, certificate of no tax debt, certificate of no property debt and payment of the corresponding taxes, so that the Trust is registered in the public property registry). The notary public who prepares the Trust Agreement, delivers the First-original testimony to the bank; Likewise, the notary delivers a second copy of the testimony to the Trustee.

Once all signatures are obtained, the enrollment process can take approximately 6-10 weeks.

In Mexico, a notary public is a lawyer appointed by the State Government, whose function is very different from the powers and faculties of the US Notary Public, or the system known as Common Law, where the notary public is a certifier of signatures and not of the content of the documents. Unlike the US Notary Public, the Mexican Notary Public must be an attorney, with integrity, and demonstrate professional experience, and in addition, he / she has to compete with other candidates to obtain a Notary license. This is not the case with notaries in the US, who may not be lawyers, and only require a payment of fees in order to be appointed notaries. A Mexican Notary Public is a legal professional, an expert in this field, a protector of legal procedures and formalities, a counselor, a guide, a protector of the interests of the parties involved in the transactions executed by them. He / She is also a representative of the government, where the value of legal security is given in all acts or transactions held before them. Their intervention in the various legal businesses can guarantee their legal security for all the parties involved, that is, the Mexican Notary Public draws up the documents, provides legal advice, resolves disputes and files documents. A Mexican Notary Public is authorized to validate the title transfer process through a Trust (among other documents) and the resulting document is registered in the Public Property Registry.