The restricted area bank trust, known as "fideicomiso" in Mexican legislation, is the only legal recourse that offers judicial security to each one of the parts involved in it.  This contract enables individuals and corporations, regardless of nationality, to purchase the right to legal and risk-free use and enjoyment of a property within the restricted zone.

The Political Constitution of the United Mexican States, in its 27 article, section I, says that foreigners may not, under any circumstances, own land or water on the corridor comprising 62 miles from the border or 31 miles from the beach (which make up to the restricted zone).

However, the Foreign Investment Law, article 11, enables foreign investors to acquire rights over real estate in the restricted zone through fideicomisos, as long as the Ministry of Foreign Affairs grants permission.

According to the fideicomiso, the fiduciary (which in Mexico refers to financial entities authorized by the General Law of Credit Institution) receives one or several real estate properties and allocates them to the legal holders.

How does it work?

The land passed on to the fiduciary, as well as the constructions, buildings or work in progress involved, form the fideicomiso.

The process entails benefits that are very similar to conventional ownership rights.  Beneficiaries obtain the privilege of using and enjoying the property for personal, residential or leisure purposes.  In other words, he is in possession of the property and can live in it, just like an actual owner.

He also has the right to make improvements, develop new constructions or modify existing ones, as long as he presents all required licenses and permits to the fiduciary.  He may also rent the property to any person or entity, according to the permission granted by the Ministry of Foreign Relations.

Beneficiaries may transfer the right and negotiate its price freely, without the intervention of the banking institution. The fiduciary should only intervene in the formal legal procedures transferring the rights.

He also has the power to "sell" the property to Mexican nationals, individuals or corporations.  The first step in the process is to obtain permission, in writing, from the fiduciary.  The transfer can be done to the same beneficiaries, if they are granted Mexican nationality according to the law.  In either case, they may negotiate the amount for the transaction on their own.

Beneficiaries can name substitutes in case of death and they may enjoy the benefits simultaneously or subsequently. In this case, the fiduciary should act as a good parent, saving the cost of lawyers, notaries, agents and other people who may play a part in the succession, whether legal or through will, as well as time.  The fiduciary, fulfilling the will of the beneficiaries, must submit the property to the people appointed as substitute beneficiaries, through a process that is much more efficient than an inheritance.

Important details

Because there are no relationships, emotional commitments, interests or attachments to the beneficiaries, the fiduciary acts as an impartial part in the process.

The restricted zone fideicomiso lasts for 50 years, which can be terminated at any time by agreement of the parts.  The beneficiary may request another 50-year extension, which must be processed through the banking institution at least 90 days before the end of the fideicomiso.

Additional properties may be added to an existing contract.  The only condition is that the land be adjacent to the property already in the fideicomiso.  Permission must be requested from the Ministry of Foreign Affairs.

As you can see, the restricted zone fideicomiso offers judicial security, benefits, reliability and, above all, peace of mind for whoever acquires the use and enjoyment of a property within the restricted zone.