Foreign Ownership of Property in MexicoThere used to be a problem, but the problem is solved

There used to be a problem, but the problem is solved.    Although the history of foreign property ownership in Mexico is fraught with horror stories, most of them have to do with the various ingenious and not so ingenious ways foreigners attempted to get ownership of land prior to 1975.  Mexico’s constitution adopted in 1916 defined a “restricted zone” including all of the Baja and all of the shoreline and border areas, and forebade foreign ownership of land within the zone for most purposes.  Until the mid 1970’s there was no legal way around this restriction, although numerous things were tried including long term trusts and ownership by a Mexican citizen who could be trusted to hold the land for the foreign true owner.   Needless to say, it did not always work.  Then the constitution was amended and rules were created to allow foreign ownership via a trust, called a fideicomiso.  Ownership of any residential property for use as a home must be through one of these trusts.

The fideicomiso is very much like an American or Canadian trust, in which the legal title to a property is held by a Trustee, and all of the other rights of ownership, including the rights to use, to build on, to modify or remove structures, to give by gift or through a will, to lease out, etc., belong to the Beneficiary.   The Trustee of a fideicomiso must be a Mexican bank.   The Beneficiary can be anyone – individual, married (or nonmarried) couple, a group of people, a partnership, a foreign LLC or corporation, or a foreign trust.

American title companies write title insurance on these properties, and are completely comfortable with the trust form of ownership.   Our agents at Mision Loreto Properties can supply you with more detailed information regarding this subject.

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