Ownership in Mexico

Fideicomiso is a 50-year perpetually renewable and transferable Bank Trust through which Foreigners acquire irrevocable and absolute ownership rights to property in Mexico. This Trust is a legal substitute for deeded (fee simple) ownership and is provided specifically for non-nationals to own property in the formerly restricted zones (border and beach areas.) The Trust system of ownership is sanctioned by the Mexican government, provided for under the Mexican Constitution, and secured by the Central Bank of Mexico.

The Mechanics

There are specific Banks authorized by the Mexican government to hold the Real Estate Fideicomiso. Title is delivered to the Bank authorized to act as the Trustee, designating the foreign buyer as the Beneficiary of the Trust (you). The Beneficiary (you) retains the use and control of the property and makes all the investment decisions. It is your Trust and not the property of the government or the Bank. The Bank reviews all paperwork of the current owner/developer to ensure that the documents are complete and legal. The Fideicomiso is not an asset of the bank's. If the Bank should ever fail, the Fideicomiso is simply transferred to another authorized Bank.

Notary Services

Notarios are attorneys who oversee the transition of title on properties who cannot represent you in litigation but can advise you in preventing litigation. These attorneys give up private practice to become agents of record. They are required by law to assure that the property in question is free of liens "Certification Libre de Gravamen" and that the true property owner is the seller. The notario must receive an appraisal by a licensed appraiser to determine the tax obligations in transferring title. He assures the state that the foreign buyer is properly represented by a Mexican bank in a property trust or that the foreign owned Mexican corporation that acquires the property is duly constituted and registered.

Since public notaries are quasi government agents and recorders, they assist the authorities by verifying the legal capacity of the parties to exercise their rights to sell and acquire the real estate; record of ownership to the real estate to be transferred at the corresponding public registry of property; and payment of real estate property taxes and water contribution fees; they will even register the transfer of the real estate property.

The Political and Economic Environment

The political and economic climate of Mexico is poised for growth. Mexico has also gone through its first election cycle since 1970 without currency devaluation. Even with the current economic slowdown, due to close ties with the United States, the peso is strong and the banking system is solid. The new administration is proactive in promoting economic growth, especially along the coastal areas. Mexico has a free market economy. State owned enterprises in Mexico have fallen from 1000 to fewer than 200 in the last 18 years. The Zedillo administration privatized and expanded competition among seaports, railroads, telecommunications, electricity, natural gas distribution and airports. Trade with the US and Canada has tripled since NAFTA was implemented in 1994.

Mexico claims 5,797 miles of coastline. On February 21, 2002, President Vicente Fox approved a strategy for coastline development. He has committed $220 million dollars to a project entitled, La Escalera Nautica (Espanol) or The Nautical Staircase (English) which is shown below. These funds will be used to improve marinas and roads along the coastline with hopes to entice $1.7 billion in private investment. This project is already underway with the construction of a three million dollar breakwater and a land bridge from Santa Rosaliita on the Pacific Ocean to the Sea of Cortez. The land bridge will allow Pacific Ocean traffic to enter the Project area without traveling the entire 1000 mile length of the Baja Peninsula.