NEW OPPORTUNITY TO INVEST IN MEXICO

MEXICAN LEGISLATION

The Mexican Constitution prohibits foreigners to make direct acquisition of land and waterways within a limit of 100 kilometers from any frontier and 50 kilometers from any coast; such regions are known like “Restricted Zones”.

THE LAW TO PROMOTE MEXICAN INVESTMENT AND REGULATE FOREIGN INVESTMENTS.

The purpose of this law is the promotion of Mexican and Foreign investment, by encouraging fair and balanced development and consolidation of the country’s economic independence. It specifies in which way capital should participate and how, by establishing trusts, foreigners can and exploit Real Estate earmarked for industrial and tourism activities.

INVESTMENTS IN REAL ESTATE

For the benefit and security of foreigners desirous to invest in Real Estate located in Mexican border and coastal regions, the Government has decided to do away with various loopholes that had been used to bypass constitutional restrictions. The most common of those maneuvers, which were jeopardizing foreign investments, were the Mexican interpositions in name only and fated contracts or other legal instruments. The Government will not only take action against such methods but also grant full protection to foreigners who, through trust institution, invest in Real Estate in restricted zones under the provisions of the aforementioned law.

INTERVENTIONS OF TRUST INSTITUTIONS

Through the ministry of Foreign affairs, the Federal Government, after hearing the recommendation of the interministerial consultative commission in charge of studying the economic and social implications of the specific project, to which the law refers can authorize trust institutions to act as trustees in acquiring Real estate where beneficiaries are foreigners.

INDUSTRIAL AND TOURISM DEVELOPMENT

The purpose of this arrangement is to accelerate industrial and tourism development in coastal and border zones in accordance with Mexican Constitution.

The law provides that trust institutions can acquire land in such zones acting as trustees for foreign beneficiaries.

HOW THE TRUST WORKS

When a foreigner wishes to acquire the right of using and exploiting a property, he can instruct to BBVA BANCOMER, S. A., to purchase it and retain it in trust for a term of fifty years, provided the Ministry of Foreign Affairs issues the necessary permit.

OWNERSHIP OF THE PROPERTY AND RIGHTS OF BENEFICIARY.

Upon acquiring a property on trust, the Bank becomes its new legal owner, subject to the clauses of the contract guarantying the beneficiary the rights to use, exploit, rent, sell the property of transfer said rights to a third part. The formalities involved are straightforward and simple.

RENEWAL OF TRUST

At the end of the trust’s term which, as mentioned before can be for a term of fifty years, the beneficiary has the following options:

a) If there is no change in the Mexican Government’s present policy, there is a chance that the trust agreement might be renewed for an additional period for more than fifty years. In case the authorities fail to grant such an extension, the trust will have to be wound up by selling the property. 

b) No matter that alternative result, the beneficiary’s interests will be adequately protected. It should be pointed out that beneficiary is, any time during the term of the trust agreement or at it´s termination, to arrange for the sale of the property to any person legally qualified to purchase it.

STRUCTURE OF THE TRUST: Parties involved in a Trust Contract:

1. The Trustor. A Mexican Citizen or a Mexican corporation with no foreign participation; the original owner of the Real Estate, it is the part who places the property in Trust. 

2. The Trustee. As indicated previously, the trustee is the Banking Institution, which holds the trust over the land for the benefit of the beneficiary. 

3. The Beneficiary. The First beneficiary is normally the promoter, who acquires beneficial rights in order to develop the property and sell its beneficial interest to other parts in turn. The final beneficiary is as usual a foreigner, since Mexican ordinarily will buy direct ownership.

BBVA BANCOMER, S. A. TRUST DIVISION REQUIRES THE NEXT DOCUMENTS FOR CARING OUT A TRUST AGREEMENT.

- Title of the property (dead)

- Map of location of the property

- Receipts of the payment of real estate tax.

- Permit of Foreign Affairs. It is obtained by BBVA Bancomer, S. A.

If you want further information about BBVA Bancomer, S.A Trust Division, please come to our main Office located in Laurel and Costera Miguel Alemán in Acapulco, Gro., México or give us a call, we will be glad to assist you.

Phone Numbers in Acapulco, Gro., México. 

(011-52) 74-81-07-88 

(011-52) 74-84-80-55

B.B.V.A. BANCOMER, S. A. TRUST DIVISION CENTRO REGIONAL ACAPULCO.