Why Do You Need A Fideicomiso To Buy Property In Mexico?

Promulgated back in 1917, the Mexican Constitution didn’t allow foreigners to own property in Mexican territory. That is why in 1973, the Government designed the fideicomiso, a land trust system to encourage foreign investment.

And this is important because now you can buy your dream beach house through a bank trust, also known in Mexico as “fideicomiso”. A concept you should get used to if you’re planning to invest in this beautiful country.

There are three parties that play in the creation of a fideicomiso: the seller, the buyer(beneficiary/ies) and the Mexican bank.

It is actually very simple, the bank holds naked title to the property, which means they have title without benefits; they cannot sell, depreciate or receive any benefits or profits. Through a fideicomiso, you acquire full rights to sell, rent, give away or develop your property, as long as you consider the local planning regulations.

That being said, since you don’t have to be resident in Mexico in order to buy property, immigration laws don’t require you to qualify for resident status.

Another good thing about a fideicomiso, is that once it’s created for the purchase of a property, it can be simply transferred in case of future selling purposes.

All these legal terms might sound confusing, but once you get used to them, you will find that Mexican law provides protection for all parties.