Acquisition of beach real estate as a foreigner in Mexico

Mexico is famous for its beautiful beaches, with crystal clear waters, lush wildlife and vibrant cultures. The Mexican coast has become a very attractive tourist and investment opportunity for people from all over the world. As such, many foreigners have seen places like Puerto Vallarta, Cancun, Cabos or Careyes as very important business opportunities, or simply as an exotic paradise to rest.

The problem is that, as some know, Mexican law prohibits any non-Mexican person from buying and owning property 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 these coastal opportunities. However, this couldn't be further from the truth, as there is a legal tool that can help any foreign investor take advantage of the enormous benefits that come with acquiring property on Mexican beaches.

The Trust

In simple terms, the Trust It is a legal figure very similar to a “Trust” used in other legal systems. In this scheme, a person can grant the use and/or ownership of an asset to a financial institution, giving him a set of legally binding instructions. The institution then executes these instructions on behalf of a third party. This tool has many other uses and functions, but for the purpose of the topic at hand, this information will suffice.

These trusts are generally provided for by a private contract between the three parties and are then notarized for greater legal security. The rights acquired by the third party can then be sold or transferred to a different third party, if they so choose.

The Trust applied to the acquisition of beach properties

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

With the Trust, a Mexican national can sell the rights to any property to any foreign citizen, by granting ownership of it to a financial institution, with the instruction to allow the foreign national to use, develop, build, rent or do what he wishes with the property. The foreign investor then pays the Mexican national the agreed amount and can use and enjoy the property exactly as if he had purchased it directly.

If, at any time, they wish to sell the property right to another third party, they can do so either by entering into a new contract for the transfer of rights or, if the third party is a Mexican national, simply by extinguishing the original trust and making a direct sale with the financial institution.

As has been said, the trust is a very useful tool for people from all over the world who seek to take advantage of the many opportunities offered by investing in Mexican beaches.

At RMG Abogados, we want to help you take advantage of these opportunities, offering our legal services and experience in commercial law, so that you can easily and comfortably acquire and invest in some of the most beautiful coastal properties in the world.

Email us at j.adams@rmgsc.com