There are 2 ways most foreigners will title their properties in Mexico.

1. Fideicomiso – Single Property Purchase

2. Mexican Corporation – Multiple Property Purchases

The Fideicomiso is the most common option chosen by foreigners buying property in Mexico. A Fedeicomiso is unique because it does not have an exact equivalent English, so an exact translation is impossible, but is very similar to a “real estate trust.”

What is a Fideicomiso?

A Fideicomiso de Zona Restringida (Real Estate Trust of a Restricted Zone) is a legal document with which a Mexican bank will “lend” you their name so you can use and manage the property you purchase in Mexico. Technically the property will be under the bank’s name, but the Fideicomiso deed explains how, by paying a yearly fee of around $450 USD, the bank will be responsible for the ownership of the land, but the Trustee (Purchaser) is 100% responsible for the use, administration, maintenance, civil responsibility, rental income, mortgage loans, and income from its sale and all belongs are exclusively that of the Trustee. The trust institution makes very clear that they have no responsibility to the property and Trustees are the sole responsible party for said property.

One of the best benefits to a Fideicomiso is that it works like a will. In the deed, you designate your beneficiaries who will inherit the trust upon your death, by simply presenting a death certificate and a short letter of request.

The initial bank fees of a Fideicomiso (initially includes the permit, one yearly fee in advance, and legal expenses) are between $2,000 and $2,500 USD, which you pay in addition to your Buyer closing costs (acquisition property tax, rights, certificates, notary and attorney fees, etc.). It takes approximately two to three months to formalize a Fideicomiso.

MEXICAN CORPORATIONS are usually only recommended for Buyers interested in starting a business in Mexico. A Mexican corporation can be formed in two weeks with at least two partners (they can both be foreigners; no Mexican citizen is needed), it costs a maximum of $1,500 USD and is used to acquire property as a Mexican national would. Everything you buy through a Mexican Corporation has to be done through a check and or wire transfer made from the corporate bank account. If you intend to open a business or even buy property for a non-residential reason, a corporation is the best route. It will save you some money on income tax, and most of all, it will allow you to create a legal source of income in the country.

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