Escape Artist
  • Features
    • Interviews
    • News
    • Field Notes
    • Trending
  • Your Escape Plan
    • Finance
    • Real Estate
    • Second Citizenship
    • Digital Nomadism
  • Destinations
    • Europe
      • Spain
      • Portugal
      • Italy
      • France
      • UK
      • Rest of Europe
    • Central America
      • Panama
      • Costa Rica
      • Nicaragua
      • Honduras
      • Belize
      • El Salvador
      • Guatemala
    • Others
      • North America
      • South America
      • Australia
      • Africa
      • Asia
  • Travel Tips
    • Know Before You Go
    • Packing List
    • Food + Culture
    • Health + Wellness
  • Subscribe
Escape Artist
  • Features
    • Interviews
    • News
    • Field Notes
    • Trending
  • Your Escape Plan
    • Finance
    • Real Estate
    • Second Citizenship
    • Digital Nomadism
  • Destinations
    • Europe
      • Spain
      • Portugal
      • Italy
      • France
      • UK
      • Rest of Europe
    • Central America
      • Panama
      • Costa Rica
      • Nicaragua
      • Honduras
      • Belize
      • El Salvador
      • Guatemala
    • Others
      • North America
      • South America
      • Australia
      • Africa
      • Asia
  • Travel Tips
    • Know Before You Go
    • Packing List
    • Food + Culture
    • Health + Wellness
  • Subscribe
👤

LIFE WITHOUT BOUNDARIES

THE NUMBER ONE SOURCE FOR EXPATS, DIGITAL NOMADS, AND DREAMERS.

  • North America

What is a Mexican Fideicomiso?

  • October 9, 2018
  • BY EA Editors
Total
0
Shares
0
0
0

What is a Mexican Fideicomiso?

The fideicomiso is a legal constrict similar to a trust to which which a person gives ownership of certain assets for it to administer. The fideicomiso, sometimes referred to as a bankers trust, is  most commonly used to hold real estate in Mexico. Such a fideicomiso is a real estate trust that is held under your name in a Mexican bank (Scotia Bank, HSBC [the world’s largest bank] Banamex {citigroup}, Santander [the largest bank in Spain], etc). The bank acts as the fiduciary, you and your heirs and assigns are the beneficiaries of the fideicomiso.

As the beneficiary of the fideicomiso you absolutely and irrevocably maintain control of the property, use, maintenance, control over all property decisions. The fideicomiso is not a lease, it is equivalent to a fiduciary in the US.

The fideicomiso gives the beneficiary absolute control of the property. So you can enjoy it, lease it, improve it, mortgage, sell, inherit, give away. Basically, your property is under a fiduciary of which you are the owner to be managed by a bank in Mexico on your behalf.

The purpose of a fideicomiso is to authorize foreigners the power to buy real estate in Mexico within the “restricted” zone and ensure a secure transaction. The “restricted” zone is land 31 miles (50 km) from the coast and 62 miles (100 km) from the border. When the Mexican Constitution was written it was designed to protect this land and prevent the great loss of land that had occurred throughout its history.

In order not to amend the Mexican constitution, they created and added the fideicomiso to promote high demand international investments, especially on the coast. Residential properties outside the restricted zone can be acquired directly by foreigners without a fiduciary, however, some buyers decide to obtain it.

Your fiduciary is not owned by the bank; they are simply administrators. You and your kin are the beneficiaries. The fideicomiso of your Mexican property is granted to you, the beneficiary and is not considered as property of the bank. In this way your property is not exposed to legal problems in which the bank can be found. You are the beneficiary of the fiduciary.

Americans usually worry that their property may be taken over by the Mexican government. Under the North American Free Trade Agreement (NAFTA), Mexico can not, directly or indirectly, expropriate. The only exception is when the government needs the land for public works (example: road construction).

Only through legal condemnation is this possible. In the rare case that it is necessary to expropriate land, the government will pay the current price with interest to the owner of the land. This is known as Eminent Domain in the US, Compulsory Purchase in the UK or Expropriation in Canada.

If you have heard one of those stories of people buying property that was re-taken by the Mexican government, it is because the unfortunate person bought land Ejidatario, which is land without title and only a Mexican citizen is authorized to buy it. Ejidatario land in land without title.

We recommend hiring a lawyer because we believe it is the most prudent. A lawyer represents you and will protect your legal interests. The lawyer will draft the contracts and review the terms and conditions of the sale. Legally only a lawyer with a degree can provide legal advice. International lawyers who do not have a degree to practice law in Mexico should not be advised in Mexican law.

Many investors choose to buy property through a corporation if their intention is to work and transact business. This would be the case in situations such as buying and selling land, renting your property or owning more than one property.

Banks in Mexico are protected by the government in case of bankruptcy. The fideicomiso is indirectly guaranteed by the government. Properties in a fideicomiso are not owned by the bank. In the rare case that a bank in Mexico is economically in trouble, the property will be transferred to another fiduciary bank. The new bank will be responsible for managing the fideicomiso. These laws were created by the federal government.

We can also assist you to buy property within a fideicomiso using your US retirement account or an offshore corporation for maximum protection and privacy. Both of these options will add significant value to your Mexican property.

The IRA can be used when you will buy a property and rent it out. In that case, rental income and capital gains will flow back into your IRA account free of US tax. When and if you wish to live in the property, you will distribute it out to yourself as a taxable event. For more on real estate in an IRA, see: Guide to Buying and Owning Mexico Real Estate

As for an offshore corporation, we typically form an entity in Cayman, BVI or Panama for this purpose. While these jurisdictions are more expensive that Nevis and Belize, they tend to work  best with Mexico.

I hope you’ve found this article on What is a Mexican Fideicomiso? to be helpful. For more information, or for assistance in buying real estate in Mexico or opening an offshore company, please contact us HERE. We’ll be happy to assist you with your international tax plan and support you.

Here are some additional articles I believe you will enjoy reading:

Real Estate in Mexico City

Living in Mexico for Work, Retirement, or the Mexican Lifestyle

Legal Requirements for Working in Mexico

 

Total
0
Shares
Share 0
Tweet 0
Pin it 0
Previous Article
  • Asia

Residency Options in Japan

  • June 24, 2018
  • BY EA Editors
View Post
Next Article
  • Asia

Things to Know Before Starting to Look For a Job in Asia

  • March 1, 2019
  • BY EA Editors
View Post
You May Also Like
Slow sunsets match Hawaii’s relaxed island pace. Photo Courtesy of Shutterstock/oulashin
View Post
  • North America
Top 10 Things to Know if You’re Moving to Hawaii
  • BY Elizabeth McGonagle
  • March 28, 2025
Vancouver, British Columbia, Canada.
View Post
  • Field Notes
The Top Expat Destinations 20 Years From Now
  • BY EA Editorial Staff
  • March 24, 2025
Wildlife faces new threats as Amazon road moves ahead. Credit: iStock.
View Post
  • News
Borders, Business, and the Battle for Resources
  • BY EA Editorial Staff
  • March 13, 2025
The world is more connected than ever, but taxation remains complicated. Credit: iStock.
View Post
  • Digital Nomadism
How to Avoid Double Taxation
  • BY EA Editorial Staff
  • March 12, 2025
Penguins on South Georgia as iceberg A23a looms, posing a threat to marine life.
View Post
  • News
Global Roundup: Migration, Markets, and Tourism Shifts
  • BY EA Editorial Staff
  • March 6, 2025
Caribou in front of Denali Mountain.
View Post
  • News
Surviving the American Frontier
  • BY Emily Pennington
  • January 13, 2025
Expatsi scouting trip in Porto, Portugal. All photos courtesy of Jen Barnett and Brett Andrews.
View Post
  • News
The New American Dream? It’s Moving Abroad
  • BY David Lepeska
  • December 4, 2024
Trump and Harris Target Expats
View Post
  • News
Presidential Candidates Make Last-Second Appeal to Americans Abroad
  • BY Aaron Kenedi
  • October 30, 2024
Trending Posts
  • Auckland’s peace begins with the landscape. 1
    • Field Notes
    Falling for Love and Life in Auckland
    • June 2, 2025
  • Moving abroad can be a fresh start—but only if you do it with your eyes wide open. 2
    • Plan B
    Moving Abroad to Reinvent Yourself
    • May 28, 2025
  • A new generation claims space through movement. 3
    • Africa
    How Ethiopia’s Girls Are Rewriting the Rules on Wheels
    • May 30, 2025
  • A large mural adorns the exterior of the London Graphic Centre. 4
    • Art & Culture
    The Coolest Art Scenes Around the World
    • May 26, 2025
  • Tourist visas remain the simplest path to setting foot abroad. 5
    • Plan B
    Living on a Tourist Visa – How Long Can You Stay?
    • June 4, 2025
Know Before You Go
  • A new generation claims space through movement. 1
    • Africa
    How Ethiopia’s Girls Are Rewriting the Rules on Wheels
    • May 30, 2025
  • Residency programs worldwide are undergoing rapid transformation. 2
    • Second Citizenship
    Beyond the Golden Visa – The Future of Residency
    • May 7, 2025
  • A typical crosswalk in Tokyo. 3
    • Blue Zone
    Top 10 Things to Know if You’re Moving to Japan
    • April 18, 2025
  • Photo courtesy of iStock/Kosamtu. 4
    • Digital Nomadism
    The Ultimate Guide to Becoming a Successful Digital Nomad
    • April 16, 2025
  • Every day life unfolds on Australia’s golden sands. 5
    • Australia
    Top 10 Things to Know if You’re Moving to Australia
    • April 7, 2025
Learn More
  • About Us
  • Contact Us
  • Subscribe
Why Subscribe

The newly imagined Escape Artist brings you fresh content with a global focus, and sharp, up-to-the-minute coverage of the joys, challenges, and opportunities of life abroad.

For a limited time, we’re offering a special discount on all subscription deals, so be sure to lock-in these incredible savings and start receiving top-notch travel and expat content today!

Sign up for the EA Newsletter

Get important news delivered directly to your inbox and stay connected!

This field is for validation purposes and should be left unchanged.
Escape Artist
  • Terms & Conditions
  • Privacy Policy
  • Cookies Policy
  • Disclaimer

Input your search keywords and press Enter.

Newsletter Subscription
Our Spring Sale Has Started

You can see how this popup was set up in our step-by-step guide: https://wppopupmaker.com/guides/auto-opening-announcement-popups/