Frequently Asked Questions
- 1. Can Foreigners buy real estate in Mexico?
- 2. What defines Mexico’s restricted zone?
- 3. What is a FIDEICOMISO? (Mexican Bank Trust)
- 4. How long does the fideicomiso last?
- 5. What is the cost of a trust?
- 6. Can foreigners buy real estate through a Corporation?
- 7. What is the typical purchase process in Mexico?
- 8. How long can a foreigner stay in Mexico?
- 9. What is an FM3?
- 10. Do I need an FM3 to buy property in Mexico?
- 11. What is an FM2?
Yes. According to article 27 of the Mexican Constitution, a person of any nationality is able to legally buy real estate in Mexico. However, there is a restricted zone in which foreigners may not acquire direct ownership of the property. Nevertheless, it is possible to acquire ownership of property in this area indirectly through other legal entities such as trust (fideicomiso) or through a Mexican corporation with foreign capital and partners
Mexico’s restricted zone comprises any property located within 30 miles of any coastline, and within 60 miles of any Mexican border. Seeing the inherent value of the property in the restricted zone, and realizing the need for foreign investment, since 1973 the government permitted the acquisition of residential properties by foreigners through the use of the fideicomiso.
A trust is an agreement in which one person transfers to another certain goods or money for a specific and legal purpose. In Mexico, only certain financial institutions can act as a trustee, which gives additional security to the parties involved in the contract. This contract can be used for many purposes, and is commonly used by foreigners to acquire a property in the restricted area. Using a trust agreement, the trustor (seller) contractually transfers the ownership of the property irrevocably to the trustee (bank), who can only act in respect to that property with the express instructions of the beneficiary (foreign buyer).In practical terms, the beneficiary has full control of the property. In order to allow foreigners to enter into a legal agreement, Mexico requires all foreigners to apply for and obtain a permit from the Ministry of Foreign Affairs prior to contracting to acquire real estate in Mexico. This is currently done by the trustee/bank at the time a real estate trust is set-up.
Usually, a fideicomiso is set up for 50 years, and is then renewable for another 50 year. Fideicomiso in fact, can be renewed at any time just by application; Another mistaken belief and concern is that after 50 years bank-trust properties pass to the authorities, this is not true.
The normal annual trust fees are approximately 500.00 usd to register it in the National Foreign Investment Registry and about 500.00 usd annually.
Yes, the second option for purchasing property in the restricted zone is forming a Mexican corporation to use the property for commercial purposes. The transaction would be considered “fee simple” meaning the purchase property is for commercial use and therefore a trust with a bank is not needed. Under certain conditions these corporations can be 100% foreign-owned.
Generally speaking, the real estate transaction process is “open” once a written purchase offer has been accepted by the seller and when a purchase-sale agreement contract has been signed by both, the seller and the purchaser. A payment of 10 to 30% will generally be required as a deposit when the purchase-sale agreement contract is signed. The balance is normally paid during the period from the sale agreement upon the signing of the Trust Deed at the Notary’s office
When foreigners arrive in Mexico they are automatically given an FMT, or Tourist Visa, which is valid for up to 6 months. While this document is simply a small piece of paper, you will need to show it to the Notario when you close on your real estate transaction.
An FM3 Visa is an immigration document required by Mexican authorities for those who plan to spend more than 6 consecutive months in Mexico. There are several categories for this Visa depending on whether the foreigner will be working in Mexico, participating in other economic activities, retiring with income from abroad, etc.
In order to acquire property it is not necessary to have an FM3, anyone in Mexico on a tourist visa may buy any property. However, if you buy a property you are no longer a “tourist” and therefore you are invited to apply for an FM3.
An FM2 document is a permanent residence visa provided to foreigners that plan to spend extended periods of time in Mexico and make it their permanent residence. You may or may not qualify for an FM2 Visa depending on how many years you have spent in Mexico and your particular reasons for immigration.After five years of successfully meeting the requirements of FM-2 (including restricted time out of Mexico), one may apply for "Inmigrado" status, which allows you to enjoy most of the rights and privileges of Mexican citizen, the primary exception being the right to vote.