Rights of ownership for real property in Mexico's restricted zone

While the Mexican Constitution prohibits foreign ownership of real estate within its Restricted Zone (100 kilometers from international borders and 50 kilometers from coastlines), the country's miles of pristine shoreline, endless summer and fabulous resort destinations, coupled with dramatically growing growth and demand, provide the foreign visitor with a desirable and very attractive investment opportunity. Recognizing the value of foreign real estate investment in these areas, in 1973 the Mexican government officially liberalized these restrictions with the advent of the ¬'fideicomiso', or trust mechanism for ownership.

Mexico's mechanism for establishing rights of ownership in the restricted zone for foreigners is the fideicomiso, or bank trust. This legal instrument, similar to an estate trust, allows the foreign trust beneficiary all the rights and privileges of fee simple ownership. The rights to build, lease, and sell and even to pass the rights on to an heir are all established in the terms of the trust agreement. A Mexican bank acts as trustee, taking direction from the buyer who is established as beneficiary of the trust. These secure, buyer-friendly revisions to the laws governing foreign investment in Mexico, have allowed sophisticated investors throughout the United States and Canada, to enjoy the benefits of property ownership in Mexico's restricted zone.