Real estate trusts explained is a common request among foreigners looking to invest in Mexico, especially in coastal or border areas. This legal structure allows non-Mexican citizens to acquire property in restricted zones without holding direct ownership.

What Is a Real Estate Trust?
In Mexico, the Constitution prohibits foreigners from directly owning property within 50 km of the coast or 100 km from borders. However, through a real estate trust (known in Spanish as “fideicomiso”), foreign buyers can safely purchase and use property. In this setup, a Mexican bank becomes the trustee, holding the title while the buyer retains full control of the property, including the right to sell, lease, remodel, or inherit it.

How the Trust Works
The seller transfers ownership to a bank, which acts as the trustee. The buyer becomes the beneficiary of the trust, with legal rights to use and enjoy the property. Moreover, the trust is valid for 50 years and can be renewed. Importantly, you don’t need to be a resident; entering Mexico as a tourist is enough to create the trust.

Costs and Legal Protection
Setting up a trust includes a permit from the Ministry of Foreign Affairs (about $1,100 USD), notary fees (typically 1.5–2% of property value), and an annual trustee fee (~$600 USD). Additionally, all trusts allow you to name beneficiaries who inherit the rights upon your death, simplifying succession.

Why Trusts Are the Best Option
Some buyers consider creating a Mexican corporation to bypass the trust, but this method is complex and involves accounting, taxes, partners, and government reporting. Comparatively, trusts are faster, safer, and more practical for residential property purchases.

In summary, real estate trusts explained gives you the clarity needed to invest confidently. With the support of a notary public and a clear legal path, owning property in Mexico becomes accessible and secure.

Have questions? Talk to a notary today and start your property journey the right way.