Fideicomiso explained: how foreigners buy property in Mexico

If you are buying in Puerto Vallarta or anywhere on the Riviera Nayarit, you will hear one word early: fideicomiso. It sounds bureaucratic, but it is the standard, well-tested way foreigners own coastal property in Mexico.

Why a trust is needed

The Mexican Constitution restricts direct foreign ownership of land within 50 kilometers of the coast and 100 kilometers of the borders. Every beach town in Banderas Bay falls inside that zone. The trust exists so that foreigners can still hold the full benefits of ownership.

How it works

A Mexican bank acts as trustee and holds title. You are the beneficiary. You can live in the property, rent it, renovate it, sell it, and name substitute beneficiaries so it passes to your heirs without a separate Mexican probate process. The trust is granted for up to 50 years and can be renewed. The bank charges an annual administration fee.

The steps, in order

1. Agree terms and sign a promissory purchase agreement, with your deposit held in escrow.
2. Due diligence: title, a certificate showing no liens, and proof that property tax and water are paid up.
3. The bank applies for a permit from the Ministry of Foreign Affairs to set up the trust.
4. Sign the deed before a notario público, who collects the taxes and fees.
5. The notary records the deed in the public property registry.

What to ask before you sign

Ask the notary for a written estimate of closing costs, ask the bank for its annual fee, and make sure your substitute beneficiaries are named in the trust from day one. If you plan to rent the property out, talk to an accountant about tax registration before closing, not after.

Every purchase is different, and none of this is legal advice. It is the map I walk my clients through on our first call.