Information for Buyers Foreigners may obtain direct ownership of property in the interior of Mexico. Foreigners cannot acquire direct ownership of residential property within the area 100 kilometers from the border and 50 kilometers from the coastline, known as the restricted zone. It is possible, however, to acquire beneficial rights to use, improve, and enjoy property in the restricted zone through a Bank Trust or Fideicomiso authorized by the Mexican Government under the Ministry of Foreign Affairs. The Fideicomiso is initially established for a 50-year renewable term and grants the beneficiary the right to use, rent, modify, or sell the property. An advantage of the bank trust is the avoidance of probate upon the death of the beneficiary when a substitute is named. Property acquired for investment and commercial use by foreigners may be owned without the need for a bank trust, provided that the property is held in a Mexican corporation. Depending on the type of business/investment property, it is often possible for a foreigner to own 100% of the Mexican corporation. In a typical transaction, a preliminary sales agreement will be used. This is like an agreement to agree and is subject to a formal sales agreement which will be executed at closing by a Notario Publico. The preliminary agreement should provide for a price and terms-generally, cash as financing is not readily available-and a closing date conditioned on the issuance of the trust permit if necessary. Other due diligence contingencies may be negotiated, but they are not customary. Real estate transactions in Mexico are "closed" by a Notario Publico, an official, highly respected government lawyer who acts as a neutral intermediary. Among other things, the notary is responsible for formalization of the final real estate contract, collection of transfer and capital gains taxes and recording of the transfer with the Public Registry. If you are purchasing residential property in the restricted zone, you must buy through a Mexican Bank Trust. It is not advisable to use a corporation to acquire residential property. A trust is not a lease. Real estate agents are not licensed in Mexico and escrow as we know it does not exist. It is imperative to use a qualified professional with experience and works within a code of ethics. An experienced Real Estate Agent can handle preliminary agreement contracts between the buyer and seller and act on their behalf to assure the proper paperwork is turned over to the Notary and Bank Fiduciary in a timely manner. An experienced professional Agent will protect your interests and advise you on your rights and obligations during the transaction. An Experienced Professional Agent works with a team of professionals including Appraisers, Notarios, Fiduciaries, Architects, Lawyers and Translators to assure all legal aspects of the sale and transfer are in order under the laws of Mexico. Sidne Byars Herrero is a member in good standing of A.M.P.I. (Association Mexicana de Profesionales Inmobilarios, a.c.). Disclaimer: All information deemed reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change or withdrawal. Sidne Byars Herrero shall not be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. All pages and images copyright © 1996-2005 Sidne Byars Herrero