FAQs – Buying Property in Mexico

It is a common misconception that foreigners cannot own Real Estate in Mexico, but the reality is that they can. However, there are restrictive zones, as described below, and we have to consider the following alternatives:

Outside the Restricted Zone, a foreigner or foreign corporation can acquire any type of real estate as any Mexican National, holding the property as a direct owner complying with Mexican law.

Within the Restricted Zone, a foreigner or foreign corporation may obtain all the rights of ownership but it must be in a bank trust known as Fideicomiso.

Another alternative is to purchase non-residential property through a Mexican corporation which can be, under certain conditions, 100% foreign-owned, with a provision in its by-laws that the foreigners accept to be subject to Mexican laws and agree not to invoke the laws of their own country. Also, that the real estate acquired be registered with the Foreign Affairs Ministry and is used for non-residential activities. In other words, under said conditions, foreigners can acquire, directly, properties destined for tourist, commercial and industrial use.

The Mexican Constitution regulates the ownership of the land and establishes that “…in a zone of 100 kilometers along the border or 50 kilometers along the coast, a foreigner cannot acquire the direct ownership of the land.” These areas are known as the “Restricted or Prohibited Zones”. Nevertheless, the latest Mexican Foreign Investment Law, which became law on December 28, 1993, makes the allowances mentioned above.

Any foreigner or Mexican National can constitute a Fideicomiso (the equivalent to an American beneficial trust) through a Mexican bank in order to purchase real estate anywhere in Mexico, including the Restricted Zone. To do so, the buyer requests a Mexican bank of his/her choice to act as a trustee on his/her behalf.The bank, as a matter of normal course, obtains the permit from the Ministry of Foreign Affairs to acquire the chosen property in trust. The Fideicomiso can be established for a maximum term of 50 years and can be continually renewed every 50 years. During these periods you have the right to transfer the title to any other party, including a member of your family. The bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary who has all the benefits of a direct owner, including the possibility of leasing or transferring his/her rights to the property to a third party or to a pre-appointed heir. During this period, the foreigner is considered as a Mexican National.

The trustee is responsible to the buyer beneficiary to ensure precise fulfillment of the trust, according to Mexican Law, assuming full technical, legal and administrative supervision in order to protect the interests of the buyer/beneficiary. Fideicomisos are not held be the trustee as an asset of the bank. For practical purposes, even in unrestricted zones many foreigners and Mexican Nationals, for that matter, prefer to hold their property under a Fideicomiso.

Most real estate transactions are “opened” after a written purchase offer is accepted by the seller and when a purchase-sale agreement (promissory contract) is signed by both parties. In most cases, a deposit is required by the broker in order to transmit the offer to the seller. If the transaction is being conducted directly with the seller, it is highly recommended that a real estate broker or a lawyer be consulted before signing any papers or handing over any money. However, this is the benefit of purchasing your property from International Land Alliance.. YOU KNOW YOUR SELLER! We are a US corporation that provides US title insurance. We will walk you through the entire transaction. Doing so will help you make sure that you do not run into any problems during the purchase process. Also,in some areas it is common practice to deliver to the seller, as an advance payment, the equivalent to a 20-50% (including the initial deposit) of the total price upon signing the purchase-sale agreement which should contain a penalty clause applicable in case there is a breach of contract by any of the parties. Normally, when signing the escritura or official deed, which needs to be certified by a Notario Publico or notary public, the balance is paid and the property is delivered. But, with International Land Alliance’s developer financing program, we can offer low down payments and no qualifying payment plans; property ownership is in reach for most everyone.

The Notario Publico is a government appointed lawyer who processes and certifies all real estate transactions, including the drawing and review of all real estate closing documents, thus insuring their proper transfer. Furthermore, all powers of attorney, the formation of corporations, wills, official witnessing, etc. are handled and duly registered through the office of the Notario Publico, who is also responsible to the government for the collection of all taxes involved. In connection to real estate transactions, the Notario Publico, upon request, receives the following official documents, which, by law, are required for any transfer:

A nonlien certificate from the Public Property Registry based on a complete title search.

A statement from the Treasury or Municipality regarding property assessments, water bills, and other pertinent taxes that might be due.

An appraisal of the property for tax purposes.

Mexico has a comprehensive legal and statutory Immigration Policy affecting Mexicans and foreign nationals. This guide gives an overview of the Mexican immigration system and outlines the principal visas and options open to persons seeking to visit Mexico for leisure, for retirement, for living, working as well as those seeking permanent residence in Mexico or Mexican Citizenship.

IMPORTANT NOTICE (Updated March 2013)

The Mexican government has announced a root-and-branch review of its immigration law, with changes announced in May 2011. Changes came into force in November 2012. This guide has been updated to reflect the new permits and an outline of new laws.

Mexico’s General Law of Population sets out the rights and obligations of foreigners, as well as the different statuses associated with foreign immigration.

There are two kinds of permit: Non-Immigrant and Immigrant:

• Non Immigrant Permits are for people who intend to visit Mexico for a specific purpose and then depart;
• Immigrant Permits are for people who wish to gain long term permanent residence in Mexico.

You may apply for your visa(s) in person, or you may hire a representative to advise you, make the application on your behalf and do all of the paperwork.

Please Note: The information on this page is intended as a summary of basic principles and immigration procedures in Mexico. For detailed information contact an immigration lawyer.

There are various classifications of Non-Immigrant visitors to Mexico – the main ones are listed below.

The Visitante Visa replaced the old FMM/FMT visa and is intended for visitors (usually tourists) to Mexico on short term (six months or less) visits. For trips of longer than six months, a non-immigrant or immigrant visa should be considered—see the sections below for details. FMM visas are issued by airlines and are also available at ports of entry. This visa is valid for up to 180 days and cannot be renewed. Upon its expiry you will need to leave the country*. There is a fee of about US$20 for this visa, which is usually included in the price if your flight (under taxes and fees). If you arrive by road or ship, and travel beyond the border zone, you will have to pay for this permit separately.

*The exception to this rule is if you have close family relatives (parents, spouse, children in Mexico) or you apply for residency for humanitarian reasons: in these circumstances a visitor’s visa can be exchanged for a resident visa.

Mexico operates what is known as a Temporary Resident Visa, intended for people who wish to live in Mexico for more than 6 months and not longer than 4 years. The Temporary Resident Visa is a renewable long term (more than six months) permit which gives non-immigrant temporary residency status to the holder. The visa can be issued for 1, 2, 3 or 4 years (max), can give work permissions, allows unlimited entries to and exits from Mexico. This means that it gives a person the right to live in Mexico for up to 4 years under terms as set out in the visa. There are various categories under which Resident Visa visas are granted, and these relate to the activities you intend to undertake while in Mexico. Under the terms of the Temporary Resident Visa, you are authorized to only undertake certain, specific activities which may be lucrative or non-lucrative, depending on the visa’s classification. One of the criteria that the Mexican authorities require for the issuance of a Temporary Resident Visa is that the applicant prove that they have ‘sufficient funds to sustain themselves while in Mexico’ and/or a proven steady income. The financial requirements have been tightened-up following the introduction of the new immigration law that was enacted in 2012.

The Temporary Resident Visa cannot be issued in Mexico, unless you are exchanging an existing FM3 visa. This is a change to the old regime, where Visitor Visas could previously be exchanged for Resident Visas if the person(s) fulfilled the criteria. There are only two exceptions to this if you are currently hold a Visitor’s Visa and want a residency visa: 1) if you have close family in Mexico (parents, spouse, children) or, 2) if you apply for residency on humanitarian grounds, then you are able to change your status from visitor to resident. The Temporary Visa itself is not issued by foreign consulates. Instead, they process and pre-approve the application and when you arrive in Mexico you have to register at your local immigration office and acquire the Visa (a plastic card) in Mexico. Once applied for and granted, the Temporary Resident Visa may issued for up to 4 years (or yearly, with annual renewals required in Mexico) and after this four year period, it cannot be renewed: at the end of the four year period you must apply for a Permanent Resident Visa or leave the country.

Permanent Resident Immigrant Visas are issued to foreign nationals who have the intention of living in Mexico for long periods of time (over six months) AND who intend to seek permanent residency in Mexico.

The Permanent Resident Visa is intended for people seeking permanent residency status in Mexico or those who may seek eventual Mexican Citizenship.

To apply for and be granted this visa, the applicants must:

• have certain family connections in Mexico, or
• apply for retirement status and prove they have sufficient monthly income (or substantial assets) to support themselves, or
• Have 4 years of regular status as Temporary Resident (2 years if legally married to a Mexican spouse or permanent resident) or
• meet a minimum score under the Points System*, or
• be granted residency on humanitarian grounds.

If your goal is to seek long-term residency in Mexico, or to become a Mexican Citizen, you should apply for a Permanent Resident Visa. Upon receiving immigrated status, you will receive a plastic card that looks like a driver’s license. This card enables you to pass through Mexico’s borders as if you were a Mexican national.

*Details of the points system have yet to be announced by the government (March 2013).

Acquiring Mexican Citizenship (naturalization) is an involved process. As a minimum you must have applied for, and been granted, permanent resident status, although exceptions to this rule may apply, depending upon a variety of circumstances: marriage to a Mexican national, for example, might enable naturalization with a shorter qualification period. You will be asked to undertake an exam, which you must pass, in order to acquire naturalization/citizenship. The examination is of a “multiple choice” type, comprises of some fifteen questions, and is not hard—although you will need a basic grasp of the Spanish language to pass it.

Below are some examples of situations and the type of visa you may consider applying for.

Temporary Visitor: When you do NOT want to seek permanent residence in Mexico

For Vacations and Casual Trips to Mexico: Simply fill out and use the Visitor’s Visa permit, available from the airline you travel with or the port of entry*

For Work Placements: If you plan to live and work in Mexico for a defined period, a Temporary Resident Visa, valid for up to 4 years is probably your best option.

For Other Activities: You should apply for a Temporary Resident Visa commensurate with your activity (e.g. Student, Journalist, Scientist, Professional, etc.)

Immigrant, Economically Active: When you want to acquire permanent residency AND you want to work in Mexico:

You should apply for a Permanent Resident Visa commensurate with the economic activity you want to undertake. Some common examples of economic activities which qualify for this visa are: a company-sponsored job, or an invitation to carry out academic or scientific research. If you have several hundred thousand US dollars to invest in a Mexican company you can apply for an investor’s visa under this category.

Immigrant, Not Economically Active: When you want to acquire permanent residency but DO NOT want to work in Mexico:

If you have a regular source of income from abroad (e.g. investments, savings, pension) then a Permanent Resident Visa will be the most straightforward route. By law, you need to prove that you have sufficient funds or investments to sustain yourself, and the criteria of income levels has been tightened up significantly under the new laws adopted in 2012.

If you want to live permanently but not work in Mexico, you will need apply for a Permanent Resident Visa and satisfy one or more of the requirements (family connections, minimum income/investments, points score or political asylum). As part of your application, you will need to state what you intend to do there, e.g. early retirement due to health, etc.

You may apply for Mexican visas directly, in person, or you may hire a representative to do the paperwork and administration on your behalf.

How you go about applying for your visa will depend on your circumstances, how much Spanish you speak, and how much time you have to deal with the considerable bureaucracy involved in the application process. If you are unsure which visa may be right for your circumstances, if you are having trouble with the application you made on your own, or if your Spanish language skills are rusty, then you may do well to hire the services of an immigration lawyer in Mexico.

A good immigration lawyer will be up-to-speed on the latest legislation as well as the latest “on the ground” policies being implemented at a local level. A lawyer will also be able to assess your individual circumstances and suggest a proper course of action, based on your personal situation, that will have the best chance of leading to a successful application. A good lawyer will also advise you if it is not possible for a person in your circumstance to make a successful application. Hiring an immigration lawyer and representative will also avoid you having to make repeated trips to the immigration office, standing in line and dealing with the bureaucracy and extensive paperwork involved in acquiring your immigration documents. If your presence is required at the immigration office, such as to sign documents or give fingerprints, your lawyer will advise you and arrange to meet you there. The support offered by a good lawyer can save you a considerable amount of time, especially if your application is complex. If you don’t speak good Spanish then you will almost certainly require representation to expedite your visa(s).