Constitutional compliance + ownership-like control
Access beach and border markets while staying compliant with Article 27.
Mexico Properties by Kreto
What is a Fideicomiso and Why Do I Need One?
If you’re a foreign buyer looking at coastal or border-area property in Mexico, you’ll hear this word early: fideicomiso. Here’s what it is, where it applies, how it works, what it costs, and which alternatives exist—so you can buy confidently.
Foreign buyers
Restricted zone
Bank trust
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Executive summary: Mexico’s Constitution (Article 27) restricts foreigners from holding direct title to residential property within the “restricted zone” (50 km from coastlines; 100 km from international borders). A fideicomiso is a bank trust that lets a foreign buyer hold beneficial rights that function like ownership—use, improve, lease, sell, and bequeath—while the bank holds legal title. Trusts run for 50 years and are renewable.
1) Legal foundation and what “restricted zone” means
The restricted zone framework is rooted in Article 27 of Mexico’s Constitution, which protects strategic coastlines and borderlands. Official guidance from Mexico’s Ministry of Foreign Affairs (SRE) explains that foreigners cannot hold direct title to residential real estate within the zone but may acquire rights through a fideicomiso (bank trust). The zone is defined as 100 km from international borders and 50 km from the seacoast.
Practical implication: a beach condo in Cancún, a home in Puerto Vallarta, or a lot in Los Cabos will typically require a trust. Many inland purchases (outside the zone) can often be held by a foreign individual via direct deed with the standard SRE statement (“Calvo clause”).
2) What exactly is a fideicomiso?
A fideicomiso is a Mexican bank trust where the trustee bank holds legal title to a specific property, and you (the foreign buyer) hold the beneficial rights. Those rights typically include: occupying the property, improving it, leasing it (subject to local/HOA rules), selling/assigning the beneficial interest, and naming substitute beneficiaries (heirs).
Key features (typical)
- Term: 50 years, renewable for additional 50-year periods.
- Formalization: Executed before a Notario and recorded at the Public Registry of Property.
- Control: The bank is on title, but must follow the trust deed—your rights are spelled out in writing.
Common misconception
“The bank owns my home.” In reality, the bank holds legal title as a fiduciary. Your ownership-like control comes from the beneficial rights in the deed. Drafting, registration, and a reputable trustee matter.
3) How the fideicomiso works step-by-step
Where it applies
Used for residential property inside the restricted zone (within 50 km of a coastline or 100 km of a border).
Step-by-step (typical)
- Due diligence: Title chain, liens, zoning, permits, condo bylaws, utilities, environmental issues, and ejido risk.
- Choose trustee bank: The bank requests the SRE permit to constitute the trust for that property.
- Notarial closing: The notary drafts the trust deed, calculates/withholds taxes, and records the instrument.
- Post-closing filings: As applicable (e.g., National Registry of Foreign Investment depending on the case).
What you can do as beneficiary
- Live in the home; remodel and improve it.
- Lease it (subject to local rules + HOA bylaws + tax compliance).
- Sell/assign your beneficial rights or instruct the trustee to transfer to a new buyer.
- Designate substitute beneficiaries to streamline inheritance.
4) Benefits for foreign buyers
Estate planning advantages
Substitute beneficiaries can simplify succession for that asset (structure matters—coordinate with your advisors).
Notario-led legal certainty
Notaries in Mexico are public officers who draft the deed, handle taxes, and register ownership instruments.
Regulated trustee oversight
A regulated financial institution must follow the trust deed’s instructions.
5) Costs, fees, and timelines (budget planning)
- SRE trust permit: SRE publishes official fees; confirm the current schedule before closing.
- Bank trustee tariffs: Setup and annual administration vary by bank and location—request the latest tariff sheet in writing.
- Closing costs overall: Notary fees, acquisition/transfer taxes, appraisals, registry fees, and translations where needed.
- Timelines: Bank + permit processing can be relatively fast once documents are complete; registry backlogs can extend total calendar time.
6) Alternatives: direct title and Mexican corporations
Direct title (outside the zone): Foreign individuals commonly acquire direct title via a standard deed (with the SRE statement).
Mexican corporation (within the zone): A Mexican company may hold direct title for non-residential purposes (commercial/hospitality/development), with specific compliance steps such as an SRE notice within defined timelines.
| Topic | Fideicomiso (Bank Trust) | Mexican Corporation (Company Title) | Direct Title (Foreign Individual) |
|---|---|---|---|
| Where allowed | Restricted zone, for residential property | Restricted zone, for non-residential uses | Outside the restricted zone |
| Legal title holder | Trustee bank (fiduciary) | Mexican company | Buyer |
| Beneficial control | Foreign buyer (use/lease/improve/sell/inherit per deed) | Shareholders via corporate governance | Buyer directly |
| Key filings | SRE permit; notarized deed; public registry; sometimes N.R.F.I. | SRE notice within required time window; corporate filings | SRE statement (“Calvo clause”); public registry |
| Term | 50 years, renewable | Indefinite (life of the company) | Indefinite |
| Cost profile | SRE permit + bank setup & annual fees + closing costs | Company formation & maintenance + notices + closing costs | No trust fees; standard closing costs |
| Sources include SRE guidance and major bank descriptions of restricted-zone trusts. See the reference links in your long-form version if you’re publishing them. | |||
7) Risks, misconceptions, and how to avoid pitfalls
“Is a trust just a lease?”
No. It conveys ownership-like rights, including sale/assignment and beneficiary designations.
Ejido land traps
Ejido land is communal. High-risk without proper regularization and a verified private-title chain.
Corporate misuse
Using a company to hold a personal beach residence can misalign with the non-residential route—confirm proper structure.
Underestimating the Notario
Notario-led drafting, tax handling, and registry steps are central. Engage early and get a written quote.
8) Practical checklist (keep this handy)
- Confirm location: Is it within 50 km of the coast or 100 km of a border?
- Verify private title: Deeds, no-lien certificate, cadastral data; screen for ejido origin.
- Bank selection: Compare trustee tariffs (setup + annual) and renewal processes.
- Notario engagement: Get a written estimate for fees, taxes, and registry expenses.
- Estate plan: Align substitute beneficiaries with your broader will and tax planning.
Want to confirm if a property needs a fideicomiso?
Share the city/area and we’ll help you confirm the correct legal structure (trust vs corporation vs direct deed), plus the due diligence steps you should insist on.