Buying Real Estate in Mexico
Do your want to avoid getting lost or having unnecessary headaches when buying real estate in Mexico?
You should read this article
As a Canadian, buying real estate in Mexico could be very rewarding and a great investment.
However, at the same time, it could be a challenging journey due to differences of language, business culture and legal systems.
Fortunately, MC Law Firm is here to assist you to navigate buying real estate in Mexico without getting lost in the process.
According to the Canadian government, in 2023 more than 2.4 million Canadians visited Mexico and significant number, particularly retirees, have purchased property in Mexico and spend extended periods of time there.
Foreign nationals, including Canadians, have some restrictions to acquire real estate assets within Mexican territory. They are not allowed to have full ownership of any real estate within 100 kilometres from an international border or 50 kilometres from any beach, sea or ocean; fortunately, Mexican law provides some options,
Therefore, you should keep reading if you are interested in buying real estate in Mexico.
In 2023 more than 2.4 million Canadians visited Mexico and significant number, particularly retirees, have purchased property in Mexico and spend extended periods of time there.
Canadians might acquire or buying real estate in Mexico following any of these options:
- Setting up a Fideicomiso, or
- Setting up a Mexican Corporation.
IN ANY CASE, FORMALITY AND DUE DILIGENCE ARE ESSENTIAL TO PROTECT YOUR INVESTMENT.
Fideicomiso
Fideicomiso is a commercial contract, similar to a Canadian trust, and it is governed by Mexico´s federal law.
Normally, it is a three-party agreement: a settlor or trustor, a trustee and a beneficiary; due to statutory requirements, the trustee must be a Mexican bank or an authorized financial institution.
This process generally takes place by having the seller/developer acting as trustor and irrevocably transferring the property title to the trustee (bank).
Then the trustee holds the property rights for the benefit of the beneficiary and the beneficiary might have unrestricted use and enjoyment rights over the property.
Those rights could be transferred (sold, donated, etc.) to a third party according to the beneficiary instructions.
Why you should have a Mexican Canadian lawyer by your side
Incorporation of a Mexican company
A Mexican company is considered as a Mexican national subject to Mexican law; therefore, it could own real estate within 100 kilometres from an international border or within 50 kilometres from a beach, sea or ocean. As general rule, foreign nationals are allowed to hold up to 100% of equity of a Mexican corporation and have full control over the company´s property.
Following are some of the most frequent questions and answers regarding buying real estate in Mexico.
FQAs
If a Canadian is considering spending leisure time or having a “second home” in Mexico, a fideicomiso is the right way get a property there.
On the other hand, setting up a Mexican corporation would be an ideal option for Canadian with entrepreneurial spirit willing to conduct business in Mexico or their goal is buying real estate for rental or business purposes.
No, a Notary public is considered a professional giving a public service providing legal certainty about any transaction, but he or she will not act as a lawyer on behalf of any of the parties; therefore, each party should obtain legal advice and representation.