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In order for foreigners to own land in Mexico they must use a bank trust. This trust is known as a fideicomiso (fee-day-comiso) and
establishes an irrevocable trust where the buyer is both the director and the beneficiary. Without getting too technical, the U.S. Security
and Exchange Commission and the California Department of Real Estate have ruled this trust to be the equivalent of fee simple title, as
we hold property inthe United States.
In the arrangement, a Mexican bank (the fiduciary) will have ownership of the real estate property, subject to the direction of the foreign buyer (the beneficiary of the trust). The foreign buyer has the right to use the property, rent the property, sell the property, or in case of
death, transfer the property to designated heirs. All proceeds belong to the beneficiary of the trust subject to paying all appropriate taxes.
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A foreigner may acquire rights over real estate in Mexican coastal and border zones through a trust, which is a legal instrument similar tothose
in the United States Through a trust, real estate is administered by a qualified and licensed bank on behalf of the trust (the owner). The legal
effect of the trust allows the fiduciary to act as the owner of the real estate, and thus, the trust complies with Mexican laws.
The beneficiary has the right to the full use, enjoyment, and profit from the real estate. The beneficiary can rent the property, borrow against the
property, and sell the property.
Mexican law provides that the original trust term of 50 years may be renewed for additional 50-year periods, in perpetuity upon written request
by the beneficiary of the trust. When the beneficiary desires, the property may be sold outright or sold subject to an assumption of the existing
trust
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