Playa del Carmen and Tulum, located in the Riviera Maya region of Mexico, has been a popular destination for international property investment due to its beautiful beaches, tourism attractions, and real estate development. The area has seen significant growth in recent years, attracting investors from different parts of the world.
Mexico has taken steps to attract foreign investment, including implementing policies and regulations that promote and protect foreign ownership of property. The fideicomiso system, which allows foreigners to hold property in the restricted zone through a trust, has made it easier for international investors to participate in the Playa del Carmen & Tulum real estate market.
Fideicomiso
The term "fideicomiso" is the Spanish equivalent of "trust" in common law jurisdictions.
The fideicomiso system in Mexico is a legal framework that allows foreigners to hold property in the restricted zone, which includes areas near the coastlines and borders. The system enables foreign individuals or entities to indirectly own and control property through a trust structure.
In simple terms, a fideicomiso is a legal arrangement in which a person or entity, known as the "fiduciary" or "trustee," holds and manages assets on behalf of another person or entity, known as the "beneficiary." The fiduciary has the legal obligation to act in the best interests of the beneficiary and manage the assets according to the terms and conditions specified in the fideicomiso agreement.
Fideicomisos are often used for various purposes, including asset protection, investment management, and real estate transactions. In the context of real estate, fideicomisos are commonly used in Playa del Carmen, where they enable foreign individuals or entities to hold title to property in the restricted zones near the coast or borders. In such cases, the fideicomiso acts as a legal mechanism through which a Mexican bank holds the property in trust for the beneficiary, who is typically a foreigner.
What are the restrictions or limitations on foreign ownership of property in Mexico?
In Mexico, there are restrictions on foreign ownership of property in what is known as the "restricted zone." The restricted zone includes areas that are within 100 kilometers of any national border and within 50 kilometers of any coastline. These areas are considered strategically important for the country's security and national patrimony.
Under the Mexican Constitution, foreign individuals or entities are generally prohibited from acquiring direct ownership of land within the restricted zone, with some exceptions. However, to facilitate foreign investment and promote tourism, Mexico has established mechanisms to allow foreigners to hold property within the restricted zone through a fideicomiso, as mentioned earlier.
To acquire property in the restricted zone, a foreigner must enter into a fideicomiso agreement with a Mexican bank, which acts as the trustee. The bank holds legal title to the property on behalf of the foreigner, who is designated as the beneficiary of the trust. The beneficiary has all the rights of ownership, including the ability to use, rent, sell, or transfer the property. The fideicomiso is typically established for a renewable term of 50 years, and it can be extended or transferred to another beneficiary.
It's important to note that the fideicomiso arrangement is governed by the Mexican Foreign Investment Law and other relevant regulations. Foreigners who wish to acquire property in the restricted zone should engage the services of a Mexican notary public or an attorney experienced in real estate matters to ensure compliance with the legal requirements and protect their interests.
It's also worth mentioning that regulations and restrictions can evolve over time, so it's essential to consult with legal professionals or experts to obtain up-to-date and accurate information regarding foreign ownership of property in Mexico.
