La Ventana del Mar offers the foreign investor one of the most secure forms of property ownership in all of Mexico. The following information describes the process of Mexican Property Ownership. We offer you the options of ....
How Foreigners can own Real Estate in Mexico:
Alternatives
The Restricted Zone
Fideicomiso or Bank Trust
Process
Notario Publico or Notary Public
Cost of the Fideicomiso
FAQ's
Visas - FM2 & FM3
Alternatives:
It is a common misconception that foreigners cannot own Real Estate in Mexico, but the reality is that they can. However, there are restrictive zones, as described below, and we have to consider the following alternatives:
Outside the Restricted Zone, a foreigner or foreign corporation can acquire any type of real estate as any Mexican National, holding the property as a direct owner complying with Mexican law.
Within the Restricted Zone, a foreigner or foreign corporation may obtain all the rights of ownership but it must be in a bank trust known as Fideicomiso.
Another alternative is to purchase non-residential property through a Mexican corporation which can be, under certain conditions, 100% foreign-owned, with a provision in its by-laws that the foreigners accept to be subject to Mexican laws and agree not to invoke the laws of their own country.
Also, that the real estate acquired be registered with the Foreign Affairs Ministry and is used for non-residential activities. In other words, under said conditions, foreigners can acquire, directly, properties destined for tourist, commercial and industrial use.
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The Restricted Zone
The Mexican Constitution regulates the ownership of the land and establishes that "...in a zone of 100 kilometers along the border or 50 kilometers along the coast, a foreigner cannot acquire the direct ownership of the land." These areas are known as the "Restricted or Prohibited Zones". Nevertheless, the latest Mexican Foreign Investment Law, which became law on December 28, 1993, makes the allowances mentioned above.
Fideicomiso or Bank Trust:
Any foreigner or Mexican National can constitute a Fideicomiso (the equivalent to an American beneficial trust) through a Mexican bank in order to purchase real estate anywhere in Mexico, including the Restricted Zone. To do so, the buyer requests a Mexican bank of his/her choice to act as a trustee on his/her behalf.
The bank, as a matter of normal course, obtains the permit from the Ministry of Foreign Affairs to acquire the chosen property in trust. The Fideicomiso can be established for a maximum term of 50 years and can be continually renewed every 50 years. During these periods you have the right to transfer the title to any other party, including a member of your family.
The bank becomes the legal owner of the property for the exclusive use of the buyer/beneficiary who has all the benefits of a direct owner, including the possibility of leasing or transferring his/her rights to the property to a third party or to a pre-appointed heir. During this period, the foreigner is considered as a Mexican National.
The trustee is responsible to the buyer beneficiary to ensure precise fulfillment of the trust, according to Mexican Law, assuming full technical, legal and administrative supervision in order to protect the interests of the buyer/beneficiary. Fideicomisos are not held be the trustee as an asset of the bank.
For practical purposes, even in unrestricted zones many foreigners and Mexican Nationals, for that matter, prefer to hold their property under a Fideicomiso.
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Process:
Most real estate transactions are "opened" after a written purchase offer is accepted by the seller and when a purchase-sale agreement (promissory contract) is signed by both parties. In most cases, a deposit is required by the broker in order to transmit the offer to the seller. If the transaction is being conducted directly with the seller, it is highly recommended that a real estate broker or a lawyer be consulted before signing any papers or handing over any money.
In some areas it is common practice to deliver to the seller, as an advance payment, the equivalent to a 20-50% (including the initial deposit) of the total price upon signing the purchase-sale agreement which should contain a penalty clause applicable in case there is a breach of contract by any of the parties.
Normally, when signing the escritura or official deed, which needs to be certified by a Notario Publico or notary public, the balance is paid and the property is delivered. This should not take more than 45 days. In certain resort areas the custom of using "escrows" is being implemented.
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Notario Publico or Notary Public:
The Notario Publico is a government appointed lawyer who processes and certifies all real estate transactions, including the drawing and review of all real estate closing documents, thus insuring their proper transfer.
Furthermore, all powers of attorney, the formation of corporations, wills, official witnessing, etc. are handled and duly registered through the office of the Notario Publico, who is also responsible to the government for the collection of all taxes involved.
In connection to real estate transactions, the Notario Publico, upon request, receives the following official documents, which, by law, are required for any transfer:
A nonlien certificate from the Public Property Registry based on a complete title search.
A statement from the Treasury or Municipality regarding property assessments, water bills, and other pertinent taxes that might be due.
An appraisal of the property for tax purposes.
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FAQ's
Do I need an FM-3 and if so, how do I obtain one?
Mexican law states: If you sign a contract, rent a house, buy a house, or lease property (i.e., campo’s), you are no longer a "tourist" and therefore, are required to apply for an FM-3. For further information, please click:
How soon should I move furniture down?
According to immigration, after obtaining your FM-3, you have 90 days to move furniture across the border duty free. Otherwise it is wise to hire an importer.
What about vehicle registration?
It must be current, check with your insurance agent to see if you are covered in Mexico, otherwise you must purchase Mexican insurance before entering the country, either on-line, at the border in Calexico, etc.
Which border crossing should we use for RV's/moving vans, etc?
Use the new border crossing as it has less turns, bigger lanes and is generally more convenient.
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VISA COST INFORMATION AS OF 02/02/04:
FM-3 VISA: 1,455.00 pesos for first time without working papers; 2,031.00 pesos for first time with working papers.
FM-2 VISA: 2,282.00 pesos for first time without working papers; 2,718.00 pesos for first time with working papers.
Call the San Felipe immigration office for more detailed explanations at telephone number 577-1083.
2/1/03 NOTICE ...Tourist visas are no longer required for car trips of up to 7 days to San Felipe!!
WHAT'S REQUIRED TO OBTAIN AN FM-3 OR FM-2 VISA?
For those of you who either lease lots, rent houses, or have purchased property through a Fideicomiso Irrevocable, you must have an FM-3 Visa to be legal in Mexico. Once you have signed any sort of contract, you are no longer a tourist. I would like to say at the outset, that if you do not have an FM-3 Visa and you find yourself in a property dispute or other entanglement which puts you in the arms of jurisprudence, you literally have no rights as an "illegal alien". This means your property, bank accounts, vehicles and personal belongings, are in jeopardy. The very minimum you need for owning or leasing property is the FM-3 Visa which is renewable every year for 5 years. The following is a list of items you will need to obtain your FM-3 or FM-2 Visa:
1. PROOF OF INCOME: $1,000.00 per person, or 1,500.00 per couple deposited into either a Mexican or American bank account. If not deposited into a Mexican bank, you must obtain a letter from your bank, translated into Spanish stating you have funds available in that bank. This letter must have an APOSTILLE from the Secretary of State's office and is not the same thing as a notary seal. The letter should be signed and sealed from a valid notary of your state, but in addition, you must have Apostille from your state secretary's office. You can contact the Secretary of State's office of your home state for more information on obtaining the Apostille.
2. PETITION LETTER: Letter from you requesting a change of your characteristic (from tourist to resident);
3. RESIDENT LETTER: Letter from camp or development manager, or copy of current Mexico electric, water or telephone bill verifying your current address in Mexico.
4. FMT TOURIST VISA: Can be purchased at any Immigration Office or local airport in Mexico for a current cost of 250.00 pesos for a period of 6 months.
5. PHOTOS: Three front and two of the side, in black and white. A specific infantile size is required and you can get these photos only at the Copicentro stationary store in San Felipe or any other shop that is familiar with this size.
6. The necessary "Form #5" (can be purchased in any stationery store in Mexico). You need three (3) originals for each visa applicant.
7. A current passport.
8. FM-1 APPLICATION: A form which must be carefully typewritten in Spanish. You can obtain this form at any Immigration office. We strongly recommend that the Immigration office or a visa service prepare this form for you (a minimal fee will be charged).
Take all these documents and letters to the Immigration office or visa service. Upon completion of your file, you will be asked to take the "Form # 5" to the bank where the appropriate fees are paid and receipted. They will keep 1 copy, and you will return the rest to the Immigration office. Now you're finished. It will take about 1 month for your file to go to Mexicali and be returned with your new FM-2 or FM-3.
ANNUAL RENEWAL FEES
FM-3 Visa without working papers is 1,055.00 pesos; FM-3 Visa with working papers is 1,713.00 pesos; FM-2 Visa without working papers is 2,194.00 pesos; FM-2 Visa with working papers is 2,194.00 pesos. The same requirements for money in the bank, etc. are necessary, except for the application and photos.
You can do all the paperwork and running around yourself or you can contact one of the following visa preparation services: San Felipe Immigration Office, Yolanda at yetmaill@telnor.net or Lupita Mora Foudy on Mar de Caribe (577-1804) for assistance in filling out the required paperwork.
THERE ARE 3 CLASSES OF PERMITS: FMT, FM-2 and FM-3
FMT: Is a Tourist Visa. If you stay MORE THAN 7 days in Baja (other regions in Mexico require a tourist visa upon entry) you will need a Tourist Visa. The cost is 205.00 pesos. Passport & I. D. required. This can be picked up at any Immigration office or at the airport.
FM-3: is a Visa for temporary residents up to 5 years or longer if desired. You can get your first FM-3 from your local Mexican Consulate in the states. It's quicker and you don't need the Apostille, but you must have your visa book in Mexico at any Immigration Office within 60 - 90 days (exact time will be stamped by the Consulate in your book) after the date your visa was received. If you don't do this, your FM-3 isn't valid and you will need to start over from the beginning.
FM-2: is a Visa for permanent residents. Requirements for FM-2 are the same but you must live in Mexico FULL TIME (residing no less than 9 months in Mexico).
For further information, concerns, or complaints contact the Secretary of Immigration office,
Sub-Delegado Local Lic. Ramiro Ulises Contreras, or one of the very helpful, English speaking assistants in that office at 577-1083.
The office is located at the Glorieta (traffic circle) on the right hand side of the street as you are heading out of town. If you have any further questions, please email us and we will try to answer your questions.
Just a helpful hint from long-time returnees: After you get your FM-3, before you leave the country, you may want to get it date stamped at Immigration. This will facilitate the renewal process and late fines if you return later than the one year expiration date.
View the La Ventana del Mar Map for Real Estate
If you have questions please contact us
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