People find the buying process in Mexico to be an exceedingly professional and pleasurable experience. The most significant part of this process is to make sure that you are represented by experienced professionals such as your realtor and lawyer. In Mexico it is always sensible to ask for a referral to find the most competent person to represent you.
HOW DO I BUY PROPERTY IN MEXICO?
You can buy property situated within 100 kilometers of any border or within 50 kilometers of the coastline through either a bank trust or by creating a Mexican corporation.
FOR ALL RESIDENTIAL/TOURISM PROPERTY: BANK TRUST OR FIDEICOMISO
The fideicomiso (bank trust) is a trust agreement established with a bank in order to hold title to a property (the property wner and the bank are named in the title documents). This trust deed assures foreign buyers of all the rights and privileges of possession.
Advantages of the fideicomiso:
- The property owner is allowed to hold the property in perpetuity.
- Fideicomiso is a 50-year trust agreement that is renewable every 50 years by you or your heirs.
- Fideicomiso rights can be transferred to another foreign buyer.
- One contract can be used for more than one property in the same deed.
- Property can be rented, sold or upgraded.
- Heirs can inherit the rights to the fideicomiso by passing probate, should you depart without a proper will.
- When you sell there are tax advantages pertaining to capital gains taxes.
- Fideicomiso is very easy to maintain by paying an annual fee to the bank.
FOR ALL COMMERCIAL/TOURISM PROPERTY : Foreign Owned Mexican Corporation (FOMC)
FOMC allows foreigners to open a business, work in Mexico and since it is a Mexican entity, it can hold direct title ownership to real estate. We can facilitate your FOMC set up easily.
It is important to know what your goals are in respect to the property, business and type of investment before setting up the corporation. Creating an FOMC requires a minimum of two persons (shareholders), of any nationality, which are at least 18 years of age. One of the shareholders will be the managing partner. The managing partner is required to obtain and maintain an FM-3 or FM-2 visa. This visa must be renewed annually. In addition, the corporation is required to make monthly reports of income and expenditures to HACIENDA which is the Mexican Department of the Treasury. The reporting must be done by a qualified accountant.
Advantages of the FOMC:
- Properties larger than 2000 square metres can be purchased.
- There’s no limit to the number of properties you can own.
- One or more of the shareholders can legally live and work in Mexico all year round.
- Managing partner needs to have FM-3/FM-2 Visa.
- Monthly reporting of financial activity through a qualified accountant.
CLOSING PROCESS WHEN USING A BANK TRUST
It usually takes 30 business days from the date Inter Lex Mexico starts the paperwork until you are able to get the title. It is imperative that the buyer supplies all the necessary documents in a timely manner so as to close the deal on time.
Such documents include:
- A copy of your passport
- A copy of a current utility bill showing your home address
- Completed buyers data form provided by Inter Lex Mexico
- First payment must be made towards the legal services proposal and the initial payment to set up the bank trust.
Once the lawyer has all of the buyers data and the initial payments has been made, the process will start with the trust bank by ordering the Permit from the Secretary of the Foreign Relations Office. This process takes roughly 10 business days. Throughout this time the lawyer will also be starting the title search and the review of the title history of the property. Additionally, all permits and certifications needed for the closing will be collected from the municipal and state authorities.
When the bank receives the permit from the Secretary of the Foreign Relations Office your lawyer will then start the drafts for the actual closing deed. The final deed will then be reviewed by the three legal groups working for you the lawyer, the Notario and the trust area of the bank. This ensures that everything is 100% correct. Once all of the closing paperwork is ready, you will then be notified of the actual date of closing and the final sum of the closing costs. Normally the total closing costs will run approximately 5 to 6 % of the purchase price.
FOMC CLOSING PROCESS
Foreign nationals can be 100% the sole and exclusive stockholders In a Mexican corporation for all non-residential or tourism/residential real estate. Since the corporation is a Mexican entity, hence, has the right to hold direct ownership/title to real estate in the restricted zone: (100km. along all borders, 50 km. along all coastlines.)
CONSIDERATIONS:
- It is vital to know what your goals and objectives are in respect to the property, business and type of investment before setting up the corporation.
- Establishing the corporation requires a minimum of two individuals (stockholders), of any nationalities, who are at least 18-years of age.
- One of the stockholders is required to be the managing partner. The managing partner must have and maintain an FM-3 visa. The visa must be renewed annually.
- One or more of the stockholders can legally live and work in Mexico all year round.
- It is mandatory for the corporation to make monthly reports of income, expenditures or dormant state to HACIENDA (the Mexican Department of the Treasury/Local Tax Offices). The reporting needs to be done by a Mexican public accountant monthly.
- Foreign purchasers must always register their ownership interest with the Secretary of Foreign Affairs in any type of real estate acquisition in Mexico.
The procedures through FOMC usually takes 7 to 15 business days.
CLOSING DEALS
In closing deals, the Public Notary issues a notarized copy of the closing deed. This document will be your first proof of ownership. This document can be used to change your utility accounts. You may also engage us to provide this service. Within three months the final deed will be issued to you by the Public Registry
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