How to Buy and Own Coastal Property
Two Options
Foreigners can purchase and own Mexican property in a restricted manner in one of two options:
1. Bank Trust (ideal for live in residents)
a. You, or a legal representative with power of attorney on your behalf using a Notary Public, must apply for a special permit. This permit is granted by the Mexican government at a cost no less than $24,000 MXN Pesos (about $1,200 USD)through the Secretaria de Relaciones Exteriores SRE (Secretary of Foreign Relations) via their Legal Department (Direction General de Asuntos Jurídicos).
b. Once you have the permit, you will need to set up a Fideicomiso or Bank Trust (similar to a real estate Trust). Costs will vary by financial institution and are connected to the payment for the rights given by the SRE, but are usually about USD $406 to $550 annually.
c. The Fideicomiso holds the legal title as your trustee and you as the beneficiary acquire the use and enjoyment of the property located in the restricted area. Technically the bank owns it, however, you as the beneficiary still hold and remain in absolute control of the property. This type of Trust generally has a maximum duration of 50 years, and it can be extended for 50 more. That way you can enjoy the use of the property for 100 years. After the original maximum duration, or the extension as applicable, the property should be transmitted to a capable person to acquire it in said restricted zone. The special requisites for contracting a Trust in restricted areas can be found in the article 11 of the Regulations of the LIE (Ley de Inversion Extranjera- Law of Foreign Investment) where certain requirements are established, like the CALVO Clause; where the foreign individual manifests to convene in considering himself Mexican in respect to his rights as trustees, and not invoke protection from his government.
2. Mexican Corporation (ideal for vacation rental properties)
a. Set up a Mexican corporation (~3 weeks).
b. Process should be completed in 2 to 3 months with a cost no less than $2,500 USD but likely less than $3,000 USD.
c. Once the process is completed, you can acquire property in the same manner as a Mexican national, with the Mexican corporation being given similar rights as a Mexican person. If you are considering starting a business, then proceed to step "d"
d. Open a Mexican bank account.
e. Purchase everything through the Mexican corporation. This option will allow you to have a legal source of income in Mexico.
f. Contact Paravi about property management and maintenance plans.
Constitution of Mexico, Article 27:
...Foreign nationals cannot own land within 100 km of the borders or 50 km of the coast; however, foreigners can have a beneficial interest in such land through a trust (fideicomiso), where the legal ownership of the land is held by a Mexican financial institution. The only precondition sine qua non to granting such a beneficial interest is that the foreigner agree that all matters relating to such land are the exclusive domain of Mexican courts and Mexican jurisdiction, and that in all issues pertaining to such land, the foreigner will conduct him or herself as a Mexican, and settle any issues arising from their interest in such land exclusively through Mexican courts and institutions. The stipulated consequence of a failure to abide by these terms is forfeiture to the nation of their interests in all lands where the foreigner has such beneficial interests.
That an area of land at the coast (20 meters from the highest tide line) is federal property that cannot be sold.
Do I need a Mexican Bank Account?
Mexican Pesos
Zihua, like everywhere in Mexico, accepts Mexican Pesos. You can bring pesos or convert your local currency to pesos at any of the local banks downtown at the current exchange rates. You can also use local ATMs to withdraw pesos.
Most foreigners that settle in Zihua will set up a local bank account through Intercam Banco or a similar international bank to directly transfer funds and convert them into pesos.
You do not need a Mexican bank account to buy property in Mexico, that can be arranged via transfer from your bank in the USA. However if you are planning on buying a property in Mexico and residing there, it is much more convenient to have a Mexican bank account in order to pay bills, utilities, groceries, and anything else you need to buy locally.
Although larger bars, restaurants, and stores accept Visa and Mastercard, more businesses will accept debit cards issued from Mexican banks, and it's always best to have pesos on hand for taxis, local merchants, and smaller businesses. Word to the wise: the smaller the bills, the happier the local business owners. Try to carry $200, $100, $50, and $20 peso bills as often as possible.