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Buying in Mexico






Fideicomiso means Bank Trust. Foreigners can now acquire absolute ownership rights to property in Mexico’s formerly restricted zones (borders and beaches) through a Fideicomiso.   This Trust system of ownership was designed specifically as a way for non-nationals to own property. It is sanctioned by the Mexican government, provided for under the Mexican Constitution, and is secured by the Central Bank of Mexico. It is irrevocable ownership set in 50-year increments, perpetually renewable, and is transferable. (It is NOT a lease. Leases cannot be sold, transferred, inherited, willed, or mortgaged. A Fideicomiso has these rights.)


When the Fideicomiso/Trust is formed in an authorized bank, the title to the property is delivered to the bank who then becomes the Trustee. The foreign buyer is designated as the Beneficiary (Owner) of the Trust. The bank becomes similar to an “employee” of the Beneficiary and must follow the instructions of the Beneficiary. The Beneficiary has total control over the Trust, retains the use and control of the property, and makes all the investment decisions. The rights to use and enjoy, sell, transfer, inherit, will, and mortgage the property is the Beneficiary’s right, the same as in fee simple ownership. It is your Trust and is not the property of the government or the bank.  You can move it to any bank should you wish once it is formed.




In the U.S., there are many types of Bank Trusts, i.e. living, education, family, etc.. There are these different types of Fideicomisos in Mexico as well. There is only one Real Estate Fideicomiso, however, and it is offered in two forms: Master Trust or Individual Trust.


  1. Master Trust: In this type of Trust, a master umbrella Trust is formed and the individuals own a piece of the Master Trust. The Master Trust holds all the properties and makes all decisions regarding the Trust/property. It is responsible for, and pays the taxes on the entire property held within the Trust and appropriates amounts for reimbursement from the individual owners. The risk in a Master Trust is if the Trust property should incur a lien or judgement against it, what affects one affects all. Whoever controls the Master Trust holds tremendous power over it. The beneficial aspect of the Master Trust is that it is less expensive to set up and maintain.
  2. Individual Trust In an Individual Trust each property owner owns, maintains, and is responsible to pay taxes on their own Trust/property. It is slightly more expensive but the security of total control over your own Trust/property is worth the small additional expense.



The Real Estate Fideicomiso should not be confused with the Land Usage Fideicomiso. This Trust allows one party to lease land to another party who plans on using the land for a specific purpose and specific length of time. The property is held in a Land Usage Trust, which allows the master leaseholder to use the land as a specified in the lease. The master lease is limited by Mexican Law to 30 years if the lease is on Ejido land, 10 years if on private land. Not all 10-year leases are held in a Land Usage Fideicomiso and many short-term leases of this nature are privately held between two parties.




The sale is registered when it is witnessed through a Nortario Publico in Mexicali. From there it passes to the authorized Bank for the Fideicomiso ownership. The bank then reviews all the necessary documents and once satisfied that the subdivision is legal, issues the Fideicomiso. This is a long and detailed process, and can take months to complete.




Foreigners often worry about land being expropriated by the Mexican Government. By Mexican Law and as agreed to through NAFTA, Mexico may not directly, or indirectly expropriate property except for a public purpose (identical to eminent domain in the U.S.). When it is necessary to expropriate, swift and fair market compensation must be paid, along with accrued interest.




The law is very specific regarding Real Estate Fideicomiso. It provides the foreign buyer the same legal rights and protection of ownership as a Mexican national would have under the law. It bestows the Beneficiary (Owner) of the Trust absolute and irrevocable  control over the property. It is in 50-year increments, guaranteed renewable for perpetuity.



Debunking the Myths

Answering Questions & Debunking the Myths

Americans are sometimes afraid to buy property in Mexico. Often their fears are based on stories they've heard third-hand or confusion between past history and present-day practice. Here are some of the myths and most often asked questions followed by an explanation:

  • AMERICANS CANNOT OWN REAL ESTATE IN MEXICO.  NOT TRUE. In most of Mexico, Americans or any other foreigners, can own land outright. Prior to 1971, land in the restricted zones - 50 km. from the ocean and 100 km. from the international borders - was restricted from foreign ownership. The Fideicomiso (bank trust system) was developed in 1972 specifically for foreigners to buy residential property in the restricted zones.
  • AMERICANS MUST HAVE A MEXICAN PARTNER. NOT TRUE. Previously a corporation or partnership had to be owned with a Mexican partner who owned at least 51% interest. This is no longer the case. Under the Foreign Investment Law of 1993 a Mexican Corporation can be 100% owned and may buy property for business purposes with fee simple title, even in the restricted zones.
  • HOW DO I OWN RESIDENTIAL PROPERTY THROUGH A FIDEICOMISO (BANK TRUST)? The law is very precise regarding the real estate Fideicomiso. The Fideicomiso is designed specifically for non-nationals to own residential property in the formerly restricted zones. It provides, under the Mexican Constitution, the same legal rights of ownership as a Mexican National would have. It bestows upon the owner of the trust absolute and irrevocable control over the property held in the trust. It is set in 50-year increments, renewable for perpetuity. It can be bought, sold, inherited and willed.
  • DOES THE BANK OWN MY TRUST? NO. The bank trust operates much the same way as an U.S. bank trust does. The bank only holds the trust for your ownership and protection under the Mexican Law. It does not own the trust. The bank serves as the owners "employee". It operates solely under the instructions of the owner of the trust. The trust can be bought, sold, inherited and willed. The Fideicomiso acts much the same as a Deed of Trust does in the U.S., providing equity ownership.
  • ISN'T A BANK TRUST THE SAME AS A LEASE? NO. Under a bank trust the beneficiary (buyer/owner) has all the rights of ownership: the right to use, borrow money on, make improvements on, and transfer said property. A lease only grants the right to use. If the tenant makes improvements, such as building a house on the property, that house belongs to the landlord. The tenant cannot sell the property or borrow money against it. A lease cannot contain provisions for future renewals whereas a Fideicomiso is guaranteed renewable into perpetuity.
  • CAN THE MEXICAN GOVERNMENT TAKE AWAY FOREIGNERS PROPERTY AT ANY TIME? NO.  The Mexican Government formed the Fideicomiso for foreigners through constitutional law and provides them, under the Mexican Constitution, the same legal rights of ownership as a Mexican national would have. In addition, the NAFTA Treaty (1994) between, Canada, Mexico and the U.S. further put in place many requirements, including providing security from any of these governments arbitrarily seizing land from its rightful owner.
  • WHAT HAPPENED AT PUNTA BANDERA? DIDN'T THE GOVERNMENT TAKE THE LAND FROM SOME AMERICANS? NO.  The problems at Punta Bandera started many years ago, and while it is complicated, following is a layman's simplified version: The property "bought" by many Americans was never legally "owned" by the seller. The title always registared with a "cloud on the title" (never was title insurance available, let alone purchased). In the 1980's, the rightful owners of the property petitioned to be paid or have their property returned. Many, many Americans negotiated with these owners to lease and maintain the property and continue to enjoy the property to this day. However, some Americans did not want to pay (or negotiate with) the rightful owners and continued a lawsuit. After going through the Court System for many years, the Supreme Court upheld the decision that the land be returned to its rightful owners. When the Americans lost the final decision they were evicted. Many refused to leave and the military acted, much the same as a Sheriff in the U.S. would, to uphold the courts ruling for the prevailing party. The government did not confiscate nor does it own the land. It only upheld and enforced the Supreme Courts decision. It was unpleasant, expensive, and left hard feelings on both sides.  
  • WHO GOES TO SAN FELIPE? San Felipe, Baja California, Mexico is home to thousands of retirees every winter. Many more come on weekends and vacations to relax and play. Its temperate climate and comparable culture make San Felipe feel like home to many Americans and Canadians. Many of our developments provide a fun, relaxed, secure, and affordable way of life... and do it with style!
  • IS SAN FELIPE SAFE? San Felipe has a very low incident of crime, especially violent crime. As anywhere, doors and cars should be locked and normal safety measures taken. 
  • CAN I BUY GROCERIES & SUPPLIES? YES! San Felipe has many small family-owned and operated markets, bakeries, etc.. in 2012 Calimax and Bodega Aurrera bringing to San Felipe the first 2 large chain stores along with Autozone. Mexicali is home to a Super Wal-Mart, Costco, Sam's Club, Smart & Final, Home Depot and many large supermarket chains such as Ley, Soriana, Calimax and Mega Comercial Mexicana. 
  • IS ELECTRICITY AVAILABLE? IS IT EXPENSIVE? Electric lots in Baja are considered premium. Electricity rate are still very reasonable in Mexico. Remember the insulation factors when building. It pays off!
  • ARE MEDICAL SERVICES AVAILABLE? A new trauma unit complete with CAT Scan, Diagnostic Laboratory and Surgical Wing is open. Staffed with extremely qualified physicians, the 24-hour medical facility is in the process of becoming Medicare and private insurance approved! Swift emergency medical and dental services by English-speaking doctors are available in San Felipe and of course pharmaceuticals are extremely reasonably well-priced.

Mexico is a land of laws and there are many national safeguards to protect your investment. The following should also appeal to your sense of security!

  • In 1997, Mexican Banks conformed to the International Banking Standards. Since that time many foreign countries, including the United States, have opened or purchased banks in Mexico. CitiBank Corporation recently bought one of Mexico's largest banks, Banamex. Wal-Mart, Sam's Club, McDonald's, Costco, Burger King, and numerous high-tech companies have invested $$$ Millions in Mexico.
  • NAFTA principles and the change in the Foreign Investment Law providing for land ownership through a Fideicomiso guaranteeing irrevocable ownership, provides non-nationals the same legal rights of ownership under the Mexican Constitution as a Mexican National. The Organization of American States provides for united diplomatic and military allies in time of conflict.


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