The Restricted Zone

Zoom in and out on the map to discover which cities are inside or outside of the Restricted Zone.

Pursuant to Article 27, Section I of the Political Constitution of the United Mexican States, foreigners are prevented from acquiring direct ownership of land and water in a strip of 100 kilometres (62 miles) along the borders and 50 kilometres (31 miles) in the beaches. Only the use and exploitation of real estate located within this restricted area is allowed through the constitution of a trust, or fideicomiso in Spanish, in accordance with the Second Title of the Foreign Investment Law.

The permits granted by the Ministry of Foreign Affairs to establish trusts, are intended to allow the use and exploitation of real estate located in a restricted area in favor of foreigners (individuals or corporations) or, to Mexican companies with a foreigners admission clause as long as the property is intended for residential purposes, for a maximum period of 50 years. However; if you reach the end of the 50 year limit, you can renew for another 50 years. The trust agreement must be recorded in a public deed.

As of April 2, 2012, and in accordance with the “AGREEMENT" establishing the mechanism by which the fiduciary delegates of credit institutions must submit requests to obtain from the Ministry of Foreign Affairs the permits for the constitution of trusts that allow foreigners the use and exploitation of real estate located in a restricted area Published in the Official Gazette of the Federation on March 16, 2012, the fiduciary delegates of credit institutions interested in serving as trustees in Contracts to establish trusts in a restricted area may only request the permission referred to in Article 11 of the Foreign Investment Law, using the Advanced Electronic Signature (FIEL) certificate issued by the Tax Administration Service (SAT), before the Directorate of Permits Article 27 Constitutional of the General Directorate of Affairs Legal, as well as receive the resolution that proceeds by the same means, for which, they must access the following league:

Requirements:
1. Name and nationality of the trustor
2. Name of the credit institution (bank) that will act as trustee
3. Name and nationality of the trustee and, if any, of the second trustees and substitute trustees
4. Duration of the trust
5. Use that will be given to the property (purposes)
6. Description, location, measurements, boundaries and total area of the property subject to the trust
7. Distance from the property with respect to the Border or the Federal Terrestrial Maritime Zone
8. Cover the payment of rights for the amount established in article 25 of the current Federal Law of Rights, through electronic payment in certified credit institutions
9. The application for permits to establish trusts in the restricted area must be submitted ONLY by electronic means, through SIPAC27

The permits to form a trust will contain the following information:
• Permit number
• Folio number
• Name of the fiduciary delegate and the credit institution (bank) he represents
• Application date
• Settler and his nationality
• Trustee
• Trustee and his nationality
• Substitute trustees and their nationality (if any)
• Duration of the trust
• Good matter of the trust
• Location, city, municipality, state
• Total area
• Distance from the federal maritime zone or border
• Twelve or thirteen conditions as the case may be
• Expedition date
• Position and name of the authorizing public servant

Any request for permission to establish trusts in accordance with the provisions of the second paragraph of article 14 of the Foreign Investment Law, must be resolved by the Ministry of Foreign Affairs issuing the corresponding resolution within five business days from the date of your presentation.

The requests for information required from the General Directorate of Legal Affairs shall adhere to the provisions of the Federal Law on Transparency and Access to Public Government Information and its Regulations, as well as the Internal Regulations of the Ministry of Foreign Affairs, in order to to safeguard and protect the property of the client.

Who is responsible for setting up your trust as a real estate purchaser?

The real estate professional assisting you through your transaction will work with a real estate attorney, and a notary public to help you obtain a new fideicomiso or assume an existing one if the seller of the real estate is a foreign national.

Source information: Secretaría de Relaciones Exteriores

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