What Is a Fideicomiso in Mexico?

With house costs shooting upwards in America, around half the country’s citizens able to buy a home say the difficulty of buying property in America is now a serious problem. In response, many people are turning to Mexico. 

Due to a surge in purchases, the country has limited foreigners’ ability to invest in popular locations. Instead, to secure property in these areas, one must set up a fideicomiso in Mexico. However, do you know what this is, what it does, and how to set it up?

Read on to learn more about:

• – Overcoming restricted buying zones and securing the home of your dreams
• – Unlocking the benefits of leveraging fideicomisos to protect your investment
• – Simplifying the process of forming a fideicomiso in Mexico

– Discover how to secure a piece of paradise in some of Mexico’s most beautiful locations and how you can trust Azul Mexico Realty to help you get there.

Why do U.S. Property Buyers Need a Fideicomiso in Mexico?

Mexican law allows foreigners to invest in property within the country. However, to ensure doing so is fair for Mexico citizens, they have put limits on private individuals or foreign corporations from buying up land within:

• – 50km of the coast
• – 100km of the Mexican border

However, to overcome this challenge and access some of the country’s most appealing homes, you can use a fideicomiso. Fideicomisos in English is “trust” and defines a formal relationship between two parties that allows one person to oversee something on an official basis. 

In this kind of Fideicomiso trust, a Mexican bank oversees the property, managing the ownership details while ensuring the buyer complies with Mexican property laws. This relationship ensures that the foreign buyer still has rights and protections that match those a local would get. 

Fideicomisos also allow for long-term property management. They are not rentals, but they typically last for 50 years and have terms allowing the buyer to renew these terms when the initial ones are over. 

With a fideicomiso, you are buying more than a home. You are investing in a future for those you care about. As such, rest assured they can do anything that they might be able to with a standard property, such as:

• – Create a home for your family
• – Pass the property on as an inheritance
• – Transfer the property to another in a sale

As the bank oversees such transfers, you can expect the process to be well-organized and to fulfill legal requirements. To help with this further, it may benefit you to engage with a professional realtor, who can also go over the process in detail, focusing on property ownership processes.

What Is a Fideicomiso in Mexico?

Fideicomisos are not a relationship unique to foreign investment. Instead, they originally existed for Mexican citizens for:

• – Estate planning
• – Inheritance management
• – Commercial property ownership
• – Investment asset control
• – Handling multi-party ownership
• – Protection of assets in legal disputes

As such, there is a long-standing tradition of using these for various purposes. If someone sees a property exists in a fideicomiso, it will not be outside of the ordinary.

How Fideicomisos Work

In the case of buying property, the arrangement in a fideicomiso is between three groups:

• – The foreign buyer (you)
• – The Mexican bank
• – The Mexican government

When you sign up for a fideicomiso and buy the property, the terms of the arrangement will state that you obtain complete ownership rights while the bank holds the title in trust. It will also state that you retain all rights to decision-making involving the property, including:

• – Improving the property
• – Selling or leasing

As such, you can even rent out the location if you wish, either as a long-term arrangement or as a vacation property.

Make sure to research the bank you wish to use before selecting one. However, if you are still trying to work out where to start, you can always work with us here at Azul Mexico Realty to help you find one that matches your needs. 

What Does Using a Fideicomiso Entail?

To set up the fideicomiso, you will need to take several legal steps involving the bank and your own records.

1. After you’ve found a property that speaks to you, you need to find a trusted partner, like Azul Mexico Realty, who can guide you through the rest of the legal details and negotiation process.
2. You should then hire a Notary Public to validate all the legal steps you take. They can prepare any documents you require.
3. After selecting a bank, you can start preparing all the required documents for the property. These include:

• – Your passport
• – Your immigration documents
• – Your proof of address and tax ID
• – The seller’s title deed
• – The seller’s tax receipts
• – The seller’s proof of no debts or liens on the property

For a complete list of these items and what you need them for, make sure to discuss them with your realtor.

4. The next step is to negotiate an agreement with the seller to set the purchase terms. Once this is confirmed, you can apply for any appropriate permits for the location and start drafting the fideicomiso with the bank. 
5. After signing and registering the trust and paying the initial fees on the fideicomiso. You will then receive all the documents for that property you can use to confirm ownership moving forward.

Work with Azul Mexico Realty to Invest in the Property You Deserve

At Azul Mexico Realty, we know how important it is to feel confident and relaxed in your property. For this reason, we are ready to help you with every step in setting up a fideicomiso in Mexico, offering security and stability while ensuring compliance with Mexican laws. Working with us, you can ensure the process is as straightforward as possible.

Our expertise can prevent each step from becoming too complicated, helping you confidently purchase the new home you’ve been looking for. Contact us at Azul Mexico Realty today to start the process and secure your perfect future.