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Yave 28 / 02 / 2023 9 min.

What is a fideicomiso? Buying real estate in Mexico | Yave.mx

Mexico is an attractive destination for foreign real estate investment. Whether you are looking for a vacation home, retirement property, or investment opportunity.

If you're a foreigner dreaming of buying a home along the beach or border, you should know that there are two options for you, either through a Mexican corporation or a trust (fideicomiso).

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What is a Fideicomiso?

According to Mexico’s Constitution, foreigners are not allowed to own land within 62 miles of the border or within 31 miles of the coast. This is known as the “restricted zone” or zona restringida.  

A fideicomiso is a legal figure similar to a trust that allows you to buy property within the restricted zone and own it as a beneficiary. The fideicomiso is issued by a Mexican bank that represents your interests and holds the legal title to it as your trustee, but cannot place liens on your property or use it in any other way. 

The fideicomiso is not considered an asset of the bank, if the institution goes bankrupt, your fideicomiso will be transferred to another bank.

There are three parties involved in a fideicomiso:

  • The settlor (the owner of the property).
  • The trustee (the bank).
  • The beneficiary (the person who will receive the benefits).

A fideicomiso lasts 50 years with an option to renew it as needed. Once established, it grants you total control over the property: lease it, sell it, improve it, whatever fancies you!

How to set  up a Fideicomiso to buy land in Mexico

When dealing with real estate transactions, there is no better safeguard than doing it through a notary. They are qualified attorneys authorized by the government to authenticate and certify trust deeds and the paperwork involved in buying or selling properties.

To set up a fideicomiso, you must work with a Mexican bank authorized to act as a trustee. Together, you will sign an agreement that outlines the advantages of being the beneficiary. There is a set-up fee to open the trust, which varies depending on the property and institution.

To set up a fideicomiso, you’ll need the following:

  • Collect all of the property details, including description, location, measurements, border distances, or proximity from oceans.
  • Check the property in the Land Registry Office to ensure the property is free and clear of any debt or liens. This is guaranteed by obtaining a non-lien certificate and tax statement from the treasury.
  • Apply for the license issued by the Ministry of Foreign Affairs (SRE) to establish the trust deed.
  • Cover the payment established in article 25 of the current Federal Law of Rights.

While this may sound very complicated, the notary and bank will usually help you with collecting all required documentation from the proper sources. 

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What happens next?

As an owner of a Fideicomiso, you will have ongoing obligations to the bank. This includes annual fees and sending a written notice if you plan to sell or transfer ownership in any way. If you were to become a Mexican citizen, your trust is then voided and you can directly own the property.

You should always consult an expert to guide you through the process of establishing a fideicomiso that meets your needs and guarantees the legal security of the properties in which you want to invest.

When you're ready to buy a home in México, look at all the different options available as there are plenty of financing options for foreigners to buy land in Mexico through a fideicomiso.

Finance your dream home in Mexico. Yave provides fast, easy and transparent mortgages for non-mexican residents.

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