Yes, absolutely.

In fact, foreigners are not only allowed to legally purchase property in Mexico, the Mexican government has gone to great lengths to make it safe and simple.

It is legal and 100% secure and we are here to guide you through each step.

You will own your slice of paradise in one of two ways: either through a Fideicomiso (FEE-day-coh-MEE-soh) which is a bank-held trust, or through a Mexican corporation.

A fideicomiso is a real estate trust held on your behalf by a Mexican bank of your choosing (Scotia Bank, HSBC [largest bank in the world], Banamex [Citigroup], Santander [largest Spanish bank], etc.). The bank acts as the Trustee, and you and those you designate are the Beneficiaries of the trust. As the beneficiary of the trust, you maintain complete control over it, retaining the use of the property and making all investment decisions. This is not a lease, it is equivalent to a Living Trust in the US. A fideicomiso bestows upon the Beneficiary of the Trust (you) absolute and irrevocable control over the property: to enjoy, lease, improve, mortgage, sell, inherit and will.

Simply stated, your property is placed in a trust that you own to be administered by a Mexican bank on your behalf.

The Property is NOT an asset of the bank and can never be aquired, or resold by the bank even in the rare case the Bank declares bankruptcy.

The purpose of the fideicomiso is to allow foreigners to buy prime Mexico real estate inside the "restricted zone," and ensure a safe and secure transaction. The "restricted zone" is any land within 31 miles (50 km) of the coastline and 62 miles (100 km) of the borders. The Mexican constitution, when created, was designed to protect their land and prevent the kind of massive land loss they had endured through their history. Rather than amend their constitution, Mexico created and added the fideicomiso to encourage foreign investment in the highly desirable areas, particularly along the coastline. Residential properties outside of the restricted zone can be acquired directly by foreigners without the need for a bank trust, although some buyers opt to use it.

No. Your trust is not an asset of the bank; they are merely the stewards of the trust. You and those you designate are the beneficiaries. The trust to your Mexico real estate property is held by the bank for the beneficiary (you) and is not considered an asset of the bank therefore not exposed to any legal action that the bank might find itself in. The trust is the beneficiary's property.

A Fideicomiso is usually set up by a Licensed Notario and is approximately the following;

• Initinital Legal cost for Notario: $1500 US one time payment

• Initial Registration Fee: $500 US one time payment

• Ongoing Annual Fee: $500 US per year

Also each year you will have to do a tax return and report any rental income and associated costs to the tax office.

The Trust is initially established for a period of 50 years and can be renewed at any time by a very simple form and a nominal fee. The trust is set in 50-year increments guaranteed renewable for perpetuity. The current cost is about $500 USD

Some of the benefits that come when using a fideicomiso to buy a property in Mexico include:

• It allows expats to buy properties within the restricted zone (you can buy a house in one of the many beautiful beach destinations in Mexico!)

• It gives foreigners the same rights as Mexican citizens when it comes to owning property. This means you can buy, sell, rent, or modify it.

• The trust can be used to purchase multiple properties in the country.

• In the case of your passing, you can designate the rights to pass on to whomever you choose.

• It can be renewed every 50 years.

• It also makes it easier to sell to another foreign buyer if you choose to do so, simply by going through a name-changing process in the trust.

Note: If you intend to sell one property and keep one property, you may want to consider setting up a Fideicomiso for each property. This method makes the sales process much simpler and smoother for the buyer as they will become the new Beneficiary of the Bank Trust.

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Foreigners often worry about their land being expropriated by the Mexican government. Under the North American Free Trade Agreement, NAFTA, Mexico may not directly or indirectly, expropriate property except for a public purpose (i.e. building roads). And only through a legal condemnation proceeding will this be possible. In the rare case where it is necessary to expropriate land, the government will pay swift and fair market compensation to the owner, together with accrued interest. This is the same process known as Eminent Domain in the USA, Compulsory Purchase in the UK or Expropriation in Canada.

Insider Tip: If you have ever heard one of those stories about someone getting their property taken by the Mexican government, it is because the unfortunate person bought Ejido land, which is untitled land that only a Mexican national can legally own. Ejido land is the only land in Mexico that is without title.

Many investors choose to purchase property though a corporation if the intent is to conduct the investment as a business. This would be the case in situations such as buying and selling land, renting their property or when owning more than one property.

The Corporation also protects the Shareholders and allows ease of on-selling your Investment when the time is right

There are several different types of Mexican corporations, however the two most common are similar to a limited liability corporation (LLC) and a limited liability partnership (LLP).

In Mexico the designation is known as S.A de C.V. (Not LLC)

A corporation is an organization similar to the Sociedad Anonima (“S.A.”) and the Sociedad Anonima de Capital Variable (“S.A. de C.V.”) that exist in Mexico. It is the most commonly used entity because the shareholders' liability is limited to their capital contributions and the stock ownership is freely transferable.

Choosing which type of corporation to set up is important for tax purposes in both the US and Mexico, and you should speak with an attorney or accountant on both sides of the border to understand the benefits and costs each one entails. Making sure the choice is made correctly from the beginning will save you time and money.

Fideicomiso (Bank Trust)

All foreign individuals purchasing property in a restricted zone (within 100 km of the Mexican border or 50 km from the coast) must purchase the property using a Fideicomiso (Bank Trust).

Fideicomisos should be considered by foreigners who:

✔ Will use their property for personal use (will not receive rental income). ✔ Are considering obtaining Mexican residency. ✔ Will rent their property for income and have Mexican residency.

If you plan on renting your property for income, you need to consider your Mexican tax obligations. One of the requirements for anyone earning income in Mexico is that you must declare any and all income with the tax authorities. To declare taxes, you must register with the authorities and obtain a Mexican tax ID known as an RFC. RFCs are only available for foreigners with Mexican residency, Mexican citizens, or Mexican corporations.

Some property owners without residency who rent their properties held in a bank trust do so via online rental companies such as AirBnb. However, without an RFC, the online rental companies are required to retain 36% in taxes.

If you are planning on renting your property but not planning on obtaining Mexican Residency, you may want to consider the next option.

Mexican Corporation

Another option for foreigners buying real estate is to open a Mexican corporation. By creating a Mexican corporation, foreigners can avoid the fideicomiso process as the property would be purchased by the Mexican Corporation.

Mexican corporations should be considered by foreigners who:

✔ Plan to rent their Mexican property for income ✔ Plan to purchase more than one rental property ✔ Have no plans to obtain Mexican residency

When renting a property owned by a Mexican corporation, the corporation will be issued a Mexican tax ID (RFC) and make monthly income declarations. There is a lot more involved in owning a Mexican corporation so it is important to discuss this option in detail with a Qualified Mexican Attorney.

There are 6 parties involved in a Mexico real estate transaction inside the restricted zone. All are helpful in their respective areas and each serves a purpose in assisting you with your real estate transaction.

• Developer

• Real Estate Company

• Buyer's Attorney

• Corporation Attorney or

• Bank (if buying through a Fideicomiso)

• Notary

To answer your question, Xmex Investments protects your interest.

Xmex Investments.

The process of buying property in Mexico will inevitably have differences from what you may be accustomed to. That is why having the right people on your side is so important. Not only will it make all the difference in your experience, having a team of experienced, knowledgeable agents dedicated to guiding you through each step, ensures that you buy smart and buy secure.

We at Xmex Investments pride ourselves on the personalized dedication we love to provide our clients. More often than not, we develop great friendships with our clients as we take them through to realizing their dream.

We recommend using an attorney because we believe it is in your best interest. An attorney will represent you and protect all your legal transactions. The attorney will draw up contracts and review the terms and conditions of the sale. Legally, only a licensed Mexican attorney should provide advice on the laws. Foreign attorneys are not licensed to practice law in Mexico and should not give advice on Mexican law.

Insider Tip: Buyers Beware - A common story in Mexico: sometimes well-intentioned, but more likely unscrupulous people, will promise a better deal saying they have a friend or relative who can offer discounted costs and save you money. This is NEVER the case. Allowing inappropriate people to become involved opens the door to improper documentation. Having to go back and fix what was done incorrectly will end up costing you thousands of dollars as opposed to having an attorney represent and protect your interests from the beginning.

In addition to representing your best interests and protecting your legal transactions, an attorney can be very helpful in saving you money. This is because attorneys are involved in many of the different transactions necessary and have contacts with banks, notaries and the Mexican government. They are aware of the most competitive costs and fees involved and make sure the buyer is given the best possible prices.

You will also receive your attorney's advice on legal options to be sure no opportunities are missed, such as tax planning, closing costs that should be paid by the seller and ways of taking title. Very often one piece of good advice can save buyers thousands of dollars in tax or other savings when the buyer eventually decides to sell the property.

A Mexican Notary (Notario Publico) is a licensed attorney, certified by the state and Federal government to act as an official and unbiased representative of the government of Mexico. A Mexican Notary is very similar to a notary in Canada and has far greater responsibility than a notary in the US. A Mexican Notary has passed stringent exams required by the Mexican government and is a government official. They provide strict security of original records and documents and they record the documents with the Public Registry of Property. A Notary's role is taken very seriously in Mexico in that the Notary could be held liable in both civil and criminal terms.

The notary performs a variety of tasks including the authentication of legal documents, the calculation of capital gains tax and is responsible for ratifying ALL real estate transactions in Mexico. Any real estate transaction not ratified before a notary and duly recorded in the Public Registry is considered invalid and not enforceable.

In a real estate transaction, the notary is equally responsible to the buyer and the seller and ultimately responsible to the Mexican government. Their job is to ensure the legality of the transfer of title, to calculate and retain the seller's capital gains tax on behalf of the government, collect the purchaser's acquisition tax and pay it to the Department of Foreign Affairs, coordinate appraisals, certificates of no liens, certificates of no debt and request all corresponding permits. After the closing, the Notary must record the transaction at the Public Registry and the Tax (Cadastral) Office. This role is taken very seriously in Mexico in that the Notary could be held liable in both civil and criminal terms.

The Mexican notary is capable and legally authorized to carry out the transaction. However, we recommend also using an attorney to represent all your interests and protect your legal transactions.

The Trustee Bank is the Mexican bank authorized to act as Trustee. The Trustee Bank must be a Mexican registered financial institution with an established trust department. As a buyer, you have the right to select any qualified bank (Scotia Bank, HSBC [largest bank in the world], Banamex [Citigroup], Santander [largest Spanish bank], etc.). The bank ensures that the closing is legal and appropriate.

They will issue a trust for the real estate for your sole use. The Bank Trustee is prohibited by Mexican law from transferring ownership of the property, changing the beneficiary rights or doing anything regarding the property without your written instructions. Having a major bank looking out for your interest is yet another added layer of protection for the buyer.

Yes, absolutely. Mexican banks have government protection against bankruptcy. The trust is guaranteed indirectly by the government.

Properties that are held in trust are NOT assets of the bank. In the rare case that the Mexican bank goes into financial difficulty, the property is transferred to another Trustee Bank. The new Trustee Bank will take care of the existing trust. These are federally imposed laws.

Total Closing Costs including: taxes, Notario fees, setting up the escrow, appraisal fees, origination fee, application, establishing the trust, obtaining the SRE Permit will cost around 5% - 7% of the sale's price.

If you have been approved for financing and choose to mortgage your property, the closing costs will be closer to 7% - 10% of the sale's price. 95% of real estate transactions in Mexico have typically been purchased with cash, but the option for a Mexico mortgage loan, being a fairly recent addition, has become increasingly popular.

• Acquisition fee

  • 2% for Playa del Carmen & Tulum

  • 3% for Cozumel, Cancún & Isla Mujeres

• Recording fee: approximately $6,000.00 pesos

• Notary fee 1-2% based on purchase price

• $3,000 USD attorney fee (minimum, for higher transactions this amount may increase)

• Buying through a Trust

• $1,500 set up fee

• $500 registration fee

• $500 annual fee

• Buying through a Corporation

• $1,500 set up fee

• $100 monthly fee

Property Tax in the State of Quintanaroo varies slighly but for most homes it will range between $400-$500 US per year.

In the State of Quintanaroo as a Property Owner you will have several utility bills each month as follows;

Based on a 2 Bedroom Condo with AC:

• Electricity $100 - $125 p/m Winter Season

• Electricity $150 - $175 p/m Summer Season

• Wifi Gignet $45 p/m

• Sky Channel / Cable $50 p/m

• Water $25 p/m

• Gas Not Usually Aavailable

Title insurance has been available in Mexico since 1993 and its purchase is optional. Because Americans are used to having Title Insurance as part of the US real estate transaction, they feel reassured by having it. It is considered an insurance policy for property ownership and a title policy is the only monetary indemnification a buyer can obtain for property ownership. Similar to a US contract of indemnity, it guarantees that the property is free and clear of any claims, judgments, liens or other legal issues. Title insurance is an extra assurance the ownership rights are held by a Fideicomiso or the Corporation. Your attorney and the notary also both verify that the title is free of any encumbrances.