The Mexico Real Estate Fideicomiso
A safe, proven trust mechanism that makes foreign property ownership in Mexico straightforward and secure.
The Legal Foundation
The 1917 Mexican Constitution
Article 27 of the 1917 Mexican Constitution established the "restricted zones" -- areas within 50 kilometers (approximately 30 miles) of the coastline and 100 kilometers (approximately 60 miles) of Mexico's international borders. Within these zones, foreign nationals were prohibited from holding direct title to real property.
This provision was rooted in Mexico's desire to maintain sovereignty over its most strategically important territories. For decades, this meant that foreigners who wished to own property in Mexico's most desirable coastal areas had very limited options.
The NAFTA Era: Foreign Investment Act of 1993
A major turning point came with the passage of Mexico's Foreign Investment Act in 1993, enacted alongside the implementation of the North American Free Trade Agreement (NAFTA). This landmark legislation allowed foreigners to own 100% of property in Mexico, including within the restricted zones, through the use of a bank trust known as the Fideicomiso.
The Foreign Investment Act modernized Mexico's approach to foreign property ownership, creating a clear legal framework that protects both Mexican sovereignty and the rights of foreign property buyers. This framework has been in place for over 30 years and has facilitated billions of dollars in real estate investment along Mexico's coastlines and border regions.
How the Fideicomiso Works
Origins of the Term
The term "Fideicomiso" derives from the Roman contract concept known as "Pactum Fiduciae" (Pacto de Fiducia), a trust arrangement that has roots stretching back thousands of years. In the Mexican legal context, it has been adapted to serve as a modern, regulated property trust mechanism.
The Trust Structure
The Trustee
A Mexican bank holds the legal title to the property in trust on behalf of the buyer. The bank acts as a neutral fiduciary.
The Beneficiary
The foreign buyer is the beneficiary of the trust and enjoys all rights of ownership: use, enjoy, improve, rent, sell, and inherit.
The Property
The real estate asset is held within the trust and managed entirely according to the beneficiary's instructions.
Your Rights as a Beneficiary
- Use and Enjoy -- Live in, vacation at, or use your property however you wish.
- Improve -- Build, remodel, or make any improvements to your property.
- Rent -- Lease your property and collect rental income.
- Sell -- Transfer your beneficial interest to another buyer at any time.
- Will to Heirs -- Pass your property to your chosen beneficiaries upon your passing.
A Modern, Secure Framework
Today, the Fideicomiso is a well-established, widely used mechanism that has made foreign property ownership in Mexico straightforward and secure. The trust is initially established for a 50-year term and is fully renewable, ensuring your ownership rights continue indefinitely.
At La Hacienda, we further protect your investment by providing title insurance through Stewart Title -- one of the most recognized and trusted title insurance companies in the United States. This provides an additional layer of security that is rarely offered in Mexican real estate transactions.
La Hacienda's Ownership Advantages
Own Your Piece of the Baja Coast
The Fideicomiso makes owning beachfront property in Mexico safe and accessible. Contact us to learn how La Hacienda can help you secure your dream home on the Sea of Cortez.