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Navigating Real Estate Investment in Mexico: A Guide for Foreigners

One of the most frequently asked questions by foreign individuals residing in Mexico or contemplating retirement in our country is whether it is feasible for them, as non-natives, to purchase residential properties in Mexico.

In essence, the answer is YES.

However, the process varies depending on the property's location, with certain locations requiring additional steps.

Permitted and Restricted Zones:

As a general rule, any foreigner can directly acquire real estate properties in Mexico, provided they are not located within the "restricted zone." This involves obtaining authorization from the Ministry of Foreign Affairs and entering into an agreement with such entity, acknowledging themselves as Mexican nationals concerning the property acquisition and agreeing not to invoke the protection of their country of origin for any property-related issues. Violating this agreement would result in the transfer of all rights to the nation.

The Mexican Constitution and the Foreign Investment Law impose restrictions on foreigners acquiring real estate within the restricted zones. According to the legal framework, these zones encompass areas within 100 kilometers of any international border (U.S.A., Belize, and Guatemala) and within 50 kilometers of the seacoast.

However, the prohibition is not absolute; it only prevents foreigners from directly acquiring real estate properties within the restricted zones.

This implies that foreigners can still acquire properties within the restricted zones by utilizing a Special Purpose Vehicle, such as a bank trust. In this scenario, the bank trust becomes the owner of record (with the bank as the trustee), while all rights and obligations of the trust are retained by the individuals controlling it.

Rights over bank trusts are easily transferable and can be passed down to heirs. Moreover, multiple individuals or entities can be named as beneficiaries, making it an ideal structure for acquiring a property with friends or family members.

It's important to note that all real estate transactions in Mexico must be conducted before a Notary Public. Beware of any seller or real estate agent claiming that real estate deals can be privately executed in our country.

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