Back Trust / Fideicomiso

Foreigners are welcome to invest in property on and along the coast. The Mexican government allows foreigners to own land through a Bank Trust called a Fideicomiso or under a Mexican corporation.

About the Fideicomiso (Bank Trust).

Three parties are involved in a Fideicomiso: the Trustor (original owner of the property), the Trustee (bank) and the Beneficiary (the new property owner who will receive the benefits of the trust). A Fideicomiso does not give direct ownership to the foreign buyer. Instead, the bank holds legal title to the property and acts on the foreigner’s behalf. A Fideicomiso assures the foreign buyer all the rights and privileges of ownership. The Foreign Investment Law allows the Fideicomiso to be established for a term of 50 years and is renewable any time during its existence.

It is also important to understand that the property is not part of the bank’s assets and cannot be liened or attached to any other obligations. The foreign buyer receives all rights of ownership including the ability to remodel, lease, mortgage, sell or pass the property to their heirs at any time. The Mexican government established the Fideicomiso as protection for foreigner buyers in Mexico. The bank is required to check ownership, insurance, and liens against the property.

When a property is purchased, the existing Fideicomiso may be re-assigned naming a new beneficiary or a new Fideicomiso may be created. Fideicomisos are renewable at any time. The costs to establish a Fideicomiso vary from bank to bank however the initial fee is approximately $2,000 to $2,500 USD and about $500 USD annually for maintenance of the trust. All associated costs are paid directly to the bank that holds the Fideicomiso.

How to establish a Fideicomiso.

Fideicomisos are established by a Mexican Notary (Notario) and it is recommended you also have the assistance of a real estate agent and/or attorney. Foreign buyers must first obtain a receipt of permit from the Ministry of Foreign Affairs which can be completed by the Mexican Notary (Notario) during the closing procedures. The bank is the link between the foreigner buyer and the Mexican government, accepting full technical, legal and administrative responsibilities, which protects the foreign buyer’s interests. Although the bank is the legal owner of the property, the bank has a statutory responsibility to abide by the foreign buyer’s wishes concerning the property so the property is controlled by the foreign buyer.

Rights of the Foreign Owner (Fideicomiso Beneficiary).

• The foreign owner can occupy the property for the life of the trust.
• Title to the property can be transferred to the foreign owner in the event that he
  acquires legal capacity to hold such property, or to any legally qualified person
  he/she may designate.
• The Fideicomiso may be passed to heirs by the foreign owners in naming those
  heirs as substitute beneficiaries in the event of the foreign owner’s death. The
  property can also be sold to a person legally authorized to own land or to a foreign
  buyer via a transfer of trust..
• The property may be rented with prior approval from the Ministry of Foreign Affairs.
• Beneficiaries are allowed to modify their property in accordance to local zoning
  regulations at the foreign owner’s expense.

To help you with all of these formalities and procedures, Resort Real Estate Services can provide assistance and access to professional legal services, thereby ensuring your satisfaction and providing additional security throughout the purchase process.