What is a Fideicomiso?

A Fideicomiso is the name of a real estate trust in Mexico which enables foreign nationals to own property within the restricted zones in Mexico. The Trustee is a Mexican bank of the individual’s choosing, though the foreign national remains the named beneficiary of the trust. This means that the beneficiary retains all control of the leasing, improvement, assignment, and sale of the property; it’s not a lease, but similar to a Living Trust in the US. Simply put, the property is placed into a trust owned by the individual, but administered by the bank.

Why do I need a Fideicomiso?

If you are intending to buy real estate in Mexico’s “restricted zones,” which includes land around the coasts and borders of Mexico you will need to enter this arrangement. The purpose is to protect Mexican land and prevent the kind of massive land loss that was experienced in the past whilst still allowing for foreign nationals to own land in the restricted areas of the country. This was made an option as an alternative to amending the Mexican Constitution; homes over 62 miles from the coasts and borders can be bought without a Fideicomiso, though some people opt to have one anyway as there are some additional benefits.

Is your trust an asset of the bank?

No. If you have a Fideicomiso the trust is not an asset of your chosen bank. The bank are stewards of the trust, and you and those you designate are the beneficiaries of this trust. This means that, because your trust is not an asset of the bank, it is not exposed or vulnerable to any legal action against the bank.

For how long does the Fideicomiso last?

The trust is initially established for 50 years after which it can be renewed with a simple form and fee. All trusts are set in 50-year increments and the possibility of renewal is guaranteed in perpetuity.

How much does a fideicomiso cost?

At present, it costs around $500 USD per year.

Can the Government take my property?

Not without good reason, fair compensation, and a legal condemnation proceeding, just like any land in Mexico.

Foreigners often worry about their land and property being vulnerable to expropriation by the Mexican Government, but under the North American Free Trade Agreement (NAFTA) Mexico may not directly or indirectly expropriate property except for a public purpose like road building. Fair compensation means the inclusion of accrued interest and market values.

Can I get a fideicomiso for ejido land?

No. Any land dubbed “ejido” is land that only a Mexican National can own legally, and even then only when they meet strict criteria and in certain circumstances. Ejido land is the only land in Mexico without a title and is intended for those Mexicans who work the land.