A foreign national cannot acquire direct ownership of property in Mexico's coastal and border strip, but can buy there through a fideicomiso: a Mexican bank acquires the rights over the property as trustee, with a permit from the Ministry of Foreign Affairs, and the foreign buyer becomes the beneficiary, with the right to use and enjoy it and to take its income. It is not a shortcut around the Constitution: it is the route the law itself provides.
The constitutional rule: the restricted zone
Article 27, subsection I, of the Political Constitution of the United Mexican States provides that within a strip of one hundred kilometres along the borders and fifty along the beaches, foreigners may not under any circumstances acquire direct ownership of land and waters. This is the so-called restricted zone, and it contains much of the coastline a European buyer has in mind when picturing a house by the sea in Mexico.
The prohibition is absolute as far as direct ownership is concerned. Precisely for that reason the Foreign Investment Law regulates a different arrangement, which transfers to the foreigner not ownership but the rights to use and take benefit from the property.
The legal route: the fideicomiso
The Foreign Investment Law requires a permit from the Ministry of Foreign Affairs for a credit institution to acquire, as trustee, rights over property located in the restricted zone, where the purpose of the trust is to allow the use and enjoyment of those assets without creating rights in rem over them, and where the beneficiaries are foreign individuals or entities (or Mexican companies without a foreigner exclusion clause, in the case of residential property).
The scope of that right is broad. Article 12 of the law defines use and enjoyment as the rights to use or benefit from the property, including, where applicable, obtaining its fruits, products and, in general, any return resulting from its operation and commercial exploitation, whether through third parties or through the trustee institution itself. In other words: the fideicomiso does not prevent you from renting the property out or earning income from it.
The bank acts as trustee in accordance with what is agreed in the trust deed. That deed is worth reading closely, because it is the document that governs how use, letting or a future sale are exercised in practice.
Three facts that shape the decision
Duration: fifty years, renewable
The fideicomiso lasts a maximum of fifty years, and that term may be extended on the beneficiary's application. The same rule allows the Ministry of Foreign Affairs to verify at any time that the conditions on which it granted the permit are being met.
Permit deadlines and favourable silence
The Ministry must decide the permit application within the five working days following its filing before the competent central administrative unit, or within thirty working days where it is filed at a state delegation. If those periods end without a decision, the application is deemed approved. Where it is filed therefore changes the transaction's timetable appreciably.
Who decides
The trustee administers in accordance with the deed; the rights of use and enjoyment belong to the beneficiary. Choosing the trustee institution and the terms of the deed is therefore a central part of the purchase, not a mere formality.
The costliest mistake: thinking a Mexican company solves everything
It is often said that all you need to do is set up a Mexican company and buy in its name. The law defines this precisely. Mexican companies whose articles include the agreement provided for in article 27 of the Constitution may acquire ownership of property in the restricted zone only where it is intended for non-residential activities, and they must give notice of the acquisition to the Ministry of Foreign Affairs within the following sixty working days. Where the intended use is residential, those same companies may acquire rights over the property only through a fideicomiso. For a house or a flat for your own use, a company does not avoid the trust.
Outside the strip, no fideicomiso is needed
Inland, outside the restricted zone, a foreign national may indeed acquire ownership, but must first file with the Ministry of Foreign Affairs a document agreeing to the terms of article 27, subsection I, of the Constitution (to be considered as a national in respect of those assets and not to invoke the protection of their government over them, on pain of forfeiting them to the Nation) and obtain the corresponding permit, except in the cases where the Ministry, through general resolutions published in the Official Gazette of the Federation, requires only the document (article 10 A of the Foreign Investment Law).
- If the property is in a municipality entirely outside the restricted zone, the permit is deemed granted if the Ministry does not publish its refusal in the Official Gazette of the Federation within the five working days following the filing of the application.
- If the municipality is partly inside the restricted zone, the Ministry decides within the thirty working days following filing.
Common mistakes
- Thinking the fideicomiso is a way of getting round the Constitution. It is the route the Foreign Investment Law itself establishes for the restricted zone.
- Believing the fideicomiso prevents letting. The law expressly includes the fruits and returns from commercial exploitation of the property.
- Buying in the name of a Mexican company for residential use. Direct ownership in the restricted zone is allowed to those companies only for non-residential activities.
- Forgetting the permit outside the strip. Even where no fideicomiso is needed, the foreign national must file the agreement with the Ministry and, unless a general resolution dispenses with it, obtain the permit.
Sources
- Political Constitution of the United Mexican States, article 27, subsection I (text in force published by the Chamber of Deputies, consulted in September 2026)
- Foreign Investment Law, articles 10, 10 A, 11, 12, 13 and 14 (DOF 27 December 1993, last amended DOF 27 May 2024; text in force published by the Chamber of Deputies, consulted in September 2026)