As we have mention before on our past article about the purchasing process, there are some extra requirements for foreigners who want to buy a property in Mexico. Some of these demands happen when you want to acquire a property or a land in the restricted zone. Below, we will explain in detail what is the restricted zone; as well as what is a bank trust and to buy a new property in Mexico.
Bank trust and Restricted Zones
The restricted zone is described as all the territory located within 50 kilometers from the Mexican coastlines and all of the Mexican borders with the United States and Central America. This would include all areas within 100 kilometers of the boarders.
We will show you the two methods available for foreigners to hold title of a property within these zones. First of all, these two entities are: The Bank Trust and the Mexican Corporation.
In addition, we’ll outline the details and advantages of the Bank Trust. It is also important to mention that buying a property through a bank trust is as safe as direct ownership. In some ways, it is even safer.
What is a bank trust and how it relates to the restricted zone?
The Mexican government established a trust system to protect foreigners who wanted to purchase a land o property in the restricted zone. This system is known as the bank trust.
It is important to know that a Bank Trust is not a lease. The Mexican Bank takes instruction only from the Beneficiary of the trust (the purchaser). In other words, the Beneficiary has the right to use, occupy, lease and possess de property, as well as build on it.
Moreover, the beneficiary can also sell the property by instructing the trustee to transfer the rights to another purchaser or to an inheritor.
Nevertheless, there is no need to use a bank trust to acquire a property in Mexico outside the restricted zone. Now, even when a foreigner can acquire direct ownership in central Mexico, there are some benefits to use this method.
Should I use a Bank Trust or a Mexican Corporation?
In most cases, we recommend to use a bank trust. However, if the buyer is going to use the property for business, it is better to set up a corporation.
However, each option has an advantage and of course, a disadvantage. To have a full and completely idea of how each entity works, get in touch with us. Our professional trained agents will be happy to help you and answer all your questions. We will guide you through all the purchasing process and help you to buy safely in Mexico.
You can make your dreams come true! Visit out website and start looking for your dream house in Mexico. Remember, at Top Mexico Real Estate… We make it happen!
