Investing in Mexico

In the past, Mexico was seen as a good place to invest a little time and money to unwind but long term funds were better pointed elsewhere, usually closer to home. This has changed significantly over the last 10 or 12 years. Foreign real estate investment has increased 500% in the past decade. What happened? Has it been the incredible advances in amenities and first class service? These certainly have contributed, but the biggest difference can be summed up in one word which is actually an acronym- NAFTA.

The North American free trade agreement between the United states ,Canada, and Mexico came into effect in 1993. With this a whole new era was ushered in for real estate development in Mexico. Up until that time it was not possible for any foreigner to own land within the restricted zone. This was any land within 100 km of a border or 50 km of coastal waters. Obviously this impacted interest in Mexican real estate as this includes the most desirable locations. This in turn hindered the development and advancement of the Mexican economy in the world market. 

While the land ownership law remained part of the constitution, a clever provision was implemented to better serve the modern equation. The Fideicomiso was introduced. This is essentially a Mexican property trust and is most closely compared to an American estate trust.

The deed is transferred to one of the major banking institutions. The bank acts as a trustee and must take instructions solely from the beneficiary. The purchaser is the beneficiary or anyone named by such. This in no way is a lease. the beneficiary has the right to use, occupy, possess, build, improve, or sell out right. The initial term is for 50 years and is completely renewable and transferable.   What are the steps involved in acquiring a property? The first is to choose a broker who will point you in the right direction and provide all the information and services you require. Upon choosing a property you will be helped in obtaining a permit to secure trust.   In Mexico, a notary of the public usually does this.  You should also procure a lawyer at this time to oversee the process.

Once the permit is obtained, usually within a day or two, you will sign the appropriate paperwork. These papers are then taken to a bank by the lawyer and the trust is secured. Finally you should protect your investment with a US titled and insured escrow account. The whole process can take up to 6 weeks but is usually completed sooner. Remember the system has been designed to facilitate foreign investment and with the proper direction your experience will reflect this.

Mexico offers dynamic, lucrative, and safe real estate investment opportunities. With the proper guidance and knowledge your investment will provide diversification and sustained growth.