Ownership Through Corporations and LLCs

             Reforms to the law of foreign ownership that were made in the mid 1990’s made it possible for foreigners to own Mexican corporations and LLC’s without a Mexican citizen’s participation.   Such corporations are subject to rules and registration requirements (similar to those for a fideicomiso), but are otherwise free to conduct business in Mexico – including the direct ownership of land and property – because the legally-created entities are Mexican citizens.

This creates a range of flexibility for investment and development by foreigners who wish to buy and develop land, or own any kind of building including private residences – but not for personal use as housing.   If a home is to be bought and used for private residence of the owners, it must be owned via a fideicomiso.   If the use will be mixed – such as the case of a house or condo bought for investment and rented or leased out to generate income, but occasionally used by the corporation’s foreign owners, it is best to get good Mexican legal advice on how to proceed.

Although it might seem tempting to use a corporation or LLC and simply skirt the fideicomiso requirement, there is little if any advantage.   The cost to establish and maintain a corporation or LLC is usually considerably higher than the cost to set up and maintain a fideicomiso trust.  And doing so is illegal, and can (both theoretically and practically) result in large penalties.   So don’t even think about it.

Contact Form

Name

E-Mail

Phone

Comments

Send