In 1917 the Mexican government establishes restrictions on foreign individuals or companies to owning property in Mexico. In 1973, a constitutional amendment known as the Foreign Investment Law allowed foreigners to purchase property anywhere in Mexico, except in the restricted zone. The restricted zone, stated in article 27, is 50 km (32 miles) from high tide and 100 km (64 miles) from any border.

In January of 1994 NAFTA had been finalized, and in succession with NAFTA Mexico passed another amendment to the constitution that foreigners could now own property in the restricted zone with a bank trust or fideicomiso. The trust system circumvents the constitution allowing foreigners to legally own in the restricted zone.

The bank (know as the trustee) holds the trust deed for the person or persons purchasing the property (know as the beneficiaries). This property is not part of the bank’s assets and cannot be subject to any lien or attachment for any bank obligations The beneficiaries has all ownership rights to the property and may sell, lease, mortgage or pass on to their heirs as desired under law.

The bank, as well as the notary, checks the documents before allowing the closing, providing further protection to the foreign owner. With the new laws and the influx of professional real estate agents your transactions are now safe and protected.

A trust may be granted and extended in 50-year periods. If you purchase property currently held in a trust deed, a new 50-year period can be established or the existing trust deed may be assigned to the purchaser. Trusts are renewable at any time by simple application with the bank. Fees must be paid to the Trustee to set up the trust and the Trustee also charges yearly administration fees.

Total Closing Costs including: taxes, Notario fees, setting up the escrow, appraisal fees, origination fee, application, establishing the trust, obtaining the SRE Permit will cost around 5%-7% of the Sale's Price.