First of all, if you are looking to purchase property in Mexico, you are going to need to know this word —fideicomiso—and what it means.

As a foreigner wanting to buy in Mexico, you are able to obtain direct ownership of property (hold title) in the interior of the country, but under Mexican law, foreigners cannot acquire direct ownership of residential property within 100 kilometers (62 miles) from the border and 50 kilometers (31 miles) from the coastline. This area is known as a restricted zone. It is possible, however, to acquire beneficial rights to use, improve, and enjoy the property in these restricted zones through a bank trust or fideicomiso authorized by the Mexican government under the Ministry of Foreign Affairs.

The fideicomiso is most commonly used to hold real estate in Mexico. The fideicomiso is not a lease. It is a long-term irrevocable bank trust with renewable terms lasting 50 years each according to Mexican law and is equivalent to a fiduciary in the US. A Mexican fiduciary bank holds the title to the property and grants ownership to the beneficiary who 100% maintains control of the property. The beneficiary has the right to enjoy and occupy, rent, remodel, modify, borrow against the property, sell it for profit, or bequeath to heirs in a will. The beneficiary has total control over all property decisions.

This real estate trust is held in the beneficiary’s name in a Mexican bank. This bank can be a choice of many, very large world-renowned banks, for example, Scotiabank, HSBC (one of the largest banks in the world), Banamex (a subsidiary of Citigroup), Santander (the largest bank in Spain), to name a few.


The Mexican Constitution of 1917 originally banned foreign ownership of any land in the restricted zones stating it could only be owned by Mexican Nationals or it had to be communal property.

Legal ownership for foreigners came about with the Foreign Investment Law in 1973, approved by President Echeverria. This law came about because Notaries and Mexican leaders saw the enormous asset that Mexico’s coastline represented. They saw an opportunity to attract foreign investment and have funds for economic development, which in the 70s, was of monumental importance. They just needed a way to make this asset available to foreigners and yet not violate the Mexican constitution. Thus, the fideicomiso, or trust, came to fruition.

The Foreign Investment Law allows foreigners to own land outside the restricted zone without the need of a bank trust. For example, places inland, like Lake Chapala, near Guadalajara, foreigners can own and hold title to the property with a simple deed. Land and property however, in a restricted zone, much of the you see in the Riviera Maya for example, needs to be within a fideicomiso trust.

This bank trust program was very successful, so the Mexican government signed another law granting the ability for foreigners to have consecutive extensions of this trust, via a simple application process, once the expiration date drew near. This new law, approved in 1994, allows the beneficiary to have the trust for 50 years, with the ability to renew for another 50.


The fideicomiso bank trust is privately held in a Mexican bank where the bank is only authorized to act as a trustee. These trusts are not assets, they are not on the bank’s books, nor are banks allowed to take any action without written instruction from the beneficiary. The bank holds title to the real estate in trust and the foreigner (beneficiary) is designated the holder of all rights of the trust by law.

The foreigner, as beneficiary, also has the equitable interest in the property through whatever market variations may occur. Any equity (or loss of equity) accrues to the holder of the trust, not the bank.

When the beneficiary sells, the sale takes place at a Notary office where the foreign owner may assign his/her beneficial interest in the trust to the new buyer. The new owner can decide to establish a new bank trust where he/she is named the primary beneficiary and then work with the Notary to complete this process.

Capital gains tax is calculated using the declared value of the purchase price in the seller’s deed and the tax value, which form a basis to index appreciation or depreciation and deduct allowable receipts to arrive at an amount of tax. Each individual case will be different and proper analysis by a qualified professional is necessary. This calculation is generally done by the Notary closing the sale.


Generally a preliminary sales agreement or offer letter is used, like a Letter of Intent (LOI), which is subject to a formal sales agreement that that will executed at closing. The LOI should provide a price, terms and conditions, and a closing date conditioned on the issuance of the trust permit, if necessary.

Real estate transactions in Mexico are closed by a Notary, an official and highly respected government lawyer who acts as a neutral intermediary. Among other things, the Notary is responsible for the formalization of the final real estate contract, collection and transfer of capital gains, and recording the transfer with the Public Registry.

The Notary is not your lawyer, however, and as with any investment, you may want to seek independent Mexican legal counsel before proceeding. EVOKE International has partnerships with only the most trustworthy, English-speaking legal representatives. We can refer you to one and even work together with you on the process.

Title insurance is available for Mexican real estate whether acquired directly or through a trust. We partner with one of the major title companies. This company also offers legal counsel, escrow services, funds disbursement, power of attorney services and will accompany you at the Notary closing to review official documents for your signature.

A foreigner interested in acquiring real estate in Mexico should adhere to the rules under Mexican law. We can easily walk you through all the steps and can recommend competent legal, tax, and other professional advice as you need it.

If you still have questions, please contact us. We will be happy to go over it personally.

The long and the short of it: