In Mexico there is what is known as the Restricted Zone. The Mexican Constitution prohibits foreigners from direct acquisition of land and waterways within a distance of 100 kilometers from any frontier and 50 kilometers from any coast. Such regions are known as "Restricted Zones". This means that, for example, the entire Baja California peninsula is in this restricted zone. However, given that most foreigners wish property in the coastal areas, in 1993 Mexico liberated ownership provisions of property in the Restricted Zone and passed the Foreign Investment Law.
Outside the Restricted Zone or within Mexico, foreigners can acquire direct ownership and buy any kind of real estate they like. This is as long as they abide by Mexican law and waiver their rights to any foreign government intervention in case of legal conflict.
Foreign Investment Law
The purpose of the Foreign Investment Law (FIL) is to promote Mexican and foreign investments in Mexico. It was passed with the intention of encouraging fair and balanced development, all the while maintaining the country's economic independence. The FIL specifies the rights and obligations of foreign capital when it comes to investments.
FIL and the Restricted Zone: The FIL specifies that by establishing a bank trust (or a “fideicomiso”) foreigners can obtain the rights of ownership of real estate within the Restricted Zone. This also includes property intended for industrial or tourism purposes. These rights of ownership means that foreigners can use, improve, rent or even sell their property as though they directly owned the property.
For non-residential or commercial property, another way to invest instead of setting up a bank trust is to buy the property through a Mexican corporation. Depending on the nature of the business, a foreigner can own 100% of the corporation as long as they agree to be subject exclusively to Mexican Law.
Pursuant to the civil codes of each of the states of the Mexican Republic, in order for a lease agreement to be valid, it must be executed in writing. Although the civil codes of the states generally establish the obligations of the landlord, it is advisable that the following obligations be included in the lease agreement that is executed:
As was indicated, the restrictions on the acquisition of real estate by foreign individuals, foreign companies, and Mexican companies with foreign investment must be taken into account.
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Along with the above, it is equally important to determine the best location to acquire property in Mexico before making the purchase. In order to make that determination, the following should be taken into account:
Acquisition of real estate by foreign individuals or entities: The right of foreigners, whether individuals or entities, to acquire real estate in Mexican territory depends on the location of such real estate:
The city booms and has been registered as the fastest growing community in all Latin America. What's bringing people and the growth to this specific region of the Mayan Riviera? The main factor is coming from the increase in tourism, the increase in hotel rooms being constructed and therefore increases in employment.
For those brave souls who are building their home in Mexico, an important part of the process is the Manifestation. This is a notification made before the local property tax department. It signals the termination of the construction and tells the world that the houseis ready to be occupied.
Buying and selling property can be stressful. Here in Mexico it can be both stressful and challenging, As in any country, if you do your homework and use the service of a professional title service company, life will be easier for you. Unfortunately some sellers don’t have all their title documents in order.
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