ALL OF BAJA IS IN THE RESTRICTED ZONE
Legal ownership is possible by using one of two methods which is generally determined by the intended use of the land.
For residential real estate, a bank trust, known in Spanish as a fideicomiso, is the most common method. In this scenario, the buyer has complete control of the property and owns the beneficial interest in the trust. While the bank has technical “ownership”, for a 50 year term, it has no rights to the property, and is mandated that any dealings with the property are to be solely at the instruction by and for the benefit of the beneficiary which may be an individual or corporation. The fideicomiso allows a buyer to avoid inheritance taxes and to put the property in a will, as well as the obvious rights of real estate ownership including building or developing the property and renting out or selling the property. Foreigners are required to obtain a permit to own the land, as is the case with ‘direct deeds’, from the Secretary of the State, which is essentially an endorsement from the
Mexican government of ownership of the property. As such, a fideicomiso affords foreigners the same rights and responsibilities full and direct ownership gives. Upon the sale of the property the buyer can assume the current fideicomiso or can take out another one.
For commercial real estate, a foreigner will generally form a Mexican corporation, also known as a Sociedad Anonima (SA), that buys the property, as the law permits a foreigner 100% ownership of a corporation. One requirement is that at least one of the owners must have their FM3 immigration status. Otherwise, a Mexican citizen that may be, but is not required to be, an owner of the corporation, must be chosen to act as an agent of the corporation for the signing of papers related to the purchase of such property.
The property is deeded directly to the corporation and required to be used in a commercial capacity. There are annual corporate fees and tax reports to be filed by an accountant, but this approach avoids the initial costs of setting up and the annual fees, approximately US$300 to $500 per year, that are associated with a fideicomiso.