Understanding the Bank Trust (Fideicomiso): How foreigners can own property in Mexico

If you are a foreigner and dream of owning beachfront property in Mexico, especially in coastal towns like San Carlos, you have probably heard the term Fideicomiso, but what exactly is it?

Let's break it down in simple terms so you can feel safe and informed as you explore property in Mexico's beautiful "restricted zone".

What is the Restricted Zone?

First, it is important to understand that the Mexican Constitution restricts direct ownership of land by foreigners within the Mexican territory. 50 kilometers (about 31 miles) from the coast and 100 kilometers (about 62 miles) from international borders. San Carlos, being a coastal jewel, falls within this "restricted zone".

But don't worry: this doesn't mean you can't own property here. It just means that you'll have to do it through a special legal structure: the Fideicomiso.

What is a Fideicomiso?

A Fideicomiso is a legal trust agreement entered into with a Mexican bank who holds title to the property in your name. The bank is the trustee, you are the beneficiary.

As beneficiary, you retain all ownership rights:

• You can live on the property.
• It can be rented.
• You can improve it, sell it or bequeath it to your heirs.

This configuration is 100% legal and secure. It has been in place for decades and has allowed thousands of foreigners to safely invest and enjoy property in the most desirable areas of Mexico.

How does it work?

Here is a brief summary of how the process unfolds:

1. Find a property: Work with a licensed and experienced real estate professional (like our team at RE/MAX First Choice Realty!) to find your ideal property.
2. Establish the trust: Once the property is selected, the trust is established through a Mexican bank authorized to act as trustee.
3. Sign the trust agreement: The bank becomes the legal titleholder, but you are named as the beneficiary with total control.
4. Annual dues: The bank charges an annual trust administration fee - typically between $500 and $700 USD, depending on the institution.
5. Renewable for 50 years: The trust has a term of 50 years and it is renewable for another 50 - indefinitely.

Why is the Trust Important?

• ✅ Legal ownership: Gives you legal rights to use and control the property.
• ✅ Security: The Trust is backed by Mexican property law and regulated by the government.
• ✅ Estate planning: You can name heirs and pass on property without going through probate in Mexico.

Can I Buy Through a Mexican Corporation?

In some cases, yes - particularly if your purchase is for commercial purposes. But for residential property in the restricted zone, the Fideicomiso is the most common and straightforward route for foreign buyers.

Work with the Right Experts

Navigating through international property can be overwhelming, but you don't have to do it alone. At RE/MAX First Choice Realty, we specialize in helping foreign nationals to buy properties in San Carlos and the surrounding area. We guide you through every step - from choosing the right property to setting up your fideicomiso, so you can enjoy the home of your dreams with total peace of mind.

Do you have any questions about the Trust?

Contact us at today - we are here to help you realize your dream of owning property in Mexico.

RE/MAX First Choice Realty - San Carlos, Sonora