Mexico is a popular tourist destination given its landscapes, historical heritage, delicious cuisine and welcoming people. Some foreigners decide to move to Mexico given its low cost of living, cheap goods, and amazing weather, among other factors. This country is the number one destination for Americans going overseas.

You can rent or buy a property if you also plan to move to Mexico. However, you cannot own a place anywhere in Mexican territory because the country’s constitution forbids foreign land ownership within the restricted zone. The 27th article of the Mexican Constitution stipulates that a foreigner can’t own land within 100 kilometers of any national border and 50 kilometers of any ocean.

Puerto Peñasco (Rocky Point) falls within Mexico’s restricted zone.

The Mexican constitution prohibits the foreign ownership of properties within the Restricted Zone. However, in 1973, President Luis Echeverria modified the foreign investment laws, allowing foreigners to own property there. In 1992, Carlos Salinas de Gortari modified the Constitution so that a Mexican Bank could be an intermediary between foreign investors and the Mexican Government. This will allow you to own property even in the Restricted Zone.

The Bank Trust agreement occurs between a foreign buyer and a Mexican Bank. The bank represents the buyer and must follow the foreign buyer’s instructions. Then, the buyer (the owner) can improve, expand, alter, build, lease and sell the property. In other words, you can use the property as you please and instruct your trustee (the bank) what to do with it, for example, transfer it to a new owner or heir.

As a three-party agreement, you delegate the management of assets to a trustee, who must be a Mexican Bank or financial entity. However, according to Mexican Law, the assets will not be part of the trustee’s portfolio or net worth of reserves. Delegating responsibilities might look like a dangerous move because, in principle, you have no control over the assets, but in practice, the trustee must strictly follow the trust deed’s guidelines. And in most cases, the real asset manager is the beneficiary or other third parties. And the beneficiary can be you.

Setting Up A Bank Trust For Owning Real Estate in Mexican Territory

Setting up costs for a bank trust

What do I need as a Foreigner to set up a Bank Trust?

Mexican nationals can purchase properties outright under their name and only pay the standard closing costs of buying said properties, which vary depending on the price.

Foreigners, on the other hand, are required to buy through a bank trust, being a dual citizen or purchasing as a Mexican national saves you thousands of dollars

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Let’s take a look at how you set up a Mexican Bank Trust.

Pick a bank in Mexico that offers Fideicomiso (trust) services that grabs your attention and will manage the property according to your needs and instructions.
Sign the trust contract. Here is where you enter into an agreement that defines the Trust’s terms, including your status as the beneficiary, the bank's role as the trustee, and the property’s ownership.
Fund the trust. You transfer the cost of the property into the trust, which the bank will use to purchase the property on your behalf.
Acquire a permit. You must obtain permission from the Mexican government, particularly the Mexican Foreign Affairs Ministry, to own property in the Restricted Zone.
Utilize the property. With the permit in your power and the property in your trust, you can use the property however you want, and the bank will take care of the paperwork, taxes, and other responsibilities according to your instructions.

The maintenance costs of a Bank Trust vary due to several factors, such as the property category, the bank you select, and the services you hire. However, here are some habitual costs.

Initial setup fee. The bank charges this to establish the trust. It is usually around $700 USD.
Annual fee. The bank requires you to pay this fee to cover the costs of preserving the trust. It often ranges from $500 USD to $2,000 USD.
Notary fees. If you modify the terms of the trust agreement or transfer property to another person, you might need to pay a notary who will prepare and execute the needed documents.
Other costs are maintenance fees, utility bills, insurance, and property taxes.

-Driver's License

-Passport

-Birth certificate

-SSN

-Marriage license (if married)

-Proof of residence

The benefits of having a Mexican Citizenship

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