THE
FIDEICOMISO (TRUST) WHY: For historical reasons, in 1917 the
Mexican Congress considered it a matter of national security to limit foreigners from
owning property within 100 kilometers (62 Miles) of the borders, and 50 kilometers (31
Miles) from the coast, this has hence been included in the Constitution. Currently, even
though it is true that foreigners still cannot record direct title in the so-called
"Restricted Zone", as of 1971 they can establish a Trust of Ownership using a
Mexican bank's trust services (in Mexico, only financial institutions can act as
trustees). Also, Mexican companies in which foreigners hold stock no longer need a trust
as long as the property is for business purposes (commercial, industrial, agricultural,
etc.) HOW: On the one hand, the bank holds the title but by law it can only act under
instructions of the Beneficiary ("owner", for practical purposes) of the trust.
On the other hand, the owner can act just as if he had recorded direct title, with the
only "limitation" in case he/she sells the property,to have the bank sign the
transfer documents to the new owner. Of course, all real estate rights, obligations and
profits belong to the owner. HOW MUCH? The bank charge for (first)
establishing and (yearly) maintaining the trust, varies from one institution to another,
ranging from flat fees to 1 - 1.5% on the assessed value at the time of purchase. These
charges are usually in Pesos and can be updated yearly. HOW LONG? Trusts are contracted for up to
50 years and the cost to establish it is now the same regardless of the specified period;
thus the bank automatically drafts a conract for the longest term, unless the client
instructs otherwise. WILL IT CHANGE? Given the trend of new laws
and Mexican politics, it is almost sure that in 15 years or less, this procedure will not
be mandatory. When this happens, canceling the trust will take only some paperwork that
can be handled by mail plus a small notary fee. If you think you might be interested contact: ACIT
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