Ownership Interest in Mexico Property

A fideicomiso is a trust arrangement commonly used in Mexico to allow foreign individuals, particularly non-Mexican citizens, to own residential property within the "restricted zone," which generally includes areas within 50 kilometers (about 31 miles) of the coastline or 100 kilometers (about 62 miles) from the border. The restricted zone was originally established to protect Mexico's national security and sovereignty.

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Under the fideicomiso structure, a Mexican bank, acting as the trustee, holds legal title to the property on behalf of the foreign beneficiary (the homeowner). The trustee is bound by the terms of the fideicomiso, which typically grant the beneficiary all rights and privileges associated with property ownership, including the ability to sell, lease, mortgage, or pass the property to heirs. The beneficiary retains full control and use of the property and is responsible for all property expenses, such as maintenance, property taxes, and utilities.

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The fideicomiso is established through a trust agreement, which is authorized by the Mexican Ministry of Foreign Affairs. The initial term of the trust is 50 years and can be renewed for an additional 50-year period, providing long-term security for the beneficiary and their heirs.

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For American citizens, the fideicomiso provides a legal means to own property in Mexico's restricted zone while complying with Mexican laws. This arrangement has facilitated real estate investments and vacation home ownership for many foreigners in Mexico's popular coastal and border regions.