Acquiring properties by the beach as a foreigner in Mexico

Mexico is famous for its beautiful beaches, with pristine waters, lush wildlife, and vibrant cultures. Mexican shores have become a very attractive tourist and investment opportunity for people from around the world. As such, many foreigners have looked at places like Puerto Vallarta, Cancun, Cabos, or Careyes as very important business opportunities, or simply as an exotic paradise to rest.

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The problem is, as some people know, Mexican law forbids any non-Mexicans from buying and owning properties near beaches and international borders, within Mexican territory. This causes many American, Canadian and European entrepreneurs to believe that they could never truly invest in the aforementioned shoreside opportunities. This however, could not be any further from the truth, as there is a legal tool that can help any foreign investor to take advantage of the huge benefits that come with acquiring properties on Mexican beaches.

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TRUSTS

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Simply put, a “trust” is a legal figure very similar to a “Trust” used in other legal systems. Here, a person can grant the usage and/or property of a good to a financial institution, giving it a set of legally binding instructions. The institution then executes these instructions, in favor of a third party. This tool does have many other uses and functions, but for the purpose of the matter at hand, this information will suffice.

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These “trusts” are usually foreseen through a private contract between the three parties, and then notarized for further legal security. The rights acquired by the third party can then be sold or granted to a different third party, if they so wish.

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TRUSTS APPLIED TO ACQUIRING PROPERTIES BY THE BEACH

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As previously mentioned, the Mexican constitution prohibits any foreign person or entity from directly purchasing and owning any land near Mexican beaches. However, the aforementioned “trust” can be used as a tool to invest in properties in any beach, from Cabos, to Cancun.

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With the “trust” a Mexican national can sell the rights to any property to any foreign citizen, by granting the ownership of it to a financial institution, with the instruction of allowing the foreign national to use, develop, build on, rent or do whatever they want with the property. The foreign investor then pays the Mexican national the agreed upon amount, and would be able to use and enjoy the property without just as if they had purchased it directly.

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If, at some point, they want to sell the right of property to another third party, they can do so by either celebrating a new right concession contract, or, if the third party is a Mexican national, simply extinguishing the original “trust”, and doing a direct sale with the financial institution.  

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As stated then, the “trust” is a very helpful tool for people from all around the world that are looking to take advantage of the many opportunities put forth by investing in Mexican beaches.

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At RMG Attorneys at Law, we want to help you to seize these opportunities, by offering our legal services and expertise in commercial law, so that you can easily and comfortably acquire and invest in some of the most beautiful beachside properties of the world.

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Send us an e-mail j.adams@rmgsc.com