The Fideicomiso or Mexican Bank Trust is a mechanism that enables foreign persons or companies to purchase property in Mexico. The trust mechanism was created to allow foreign investors to participate in Mexico’s rapidly expanding sectors, while exercising complete and legal control over their investments while complying with Mexico’s investment laws.
Lawsuits, courts and attorneys cause headaches in any country. Mexico is no different. INEGI, the National Statistics Institute, says that there are 33,000 persons in Mexico City for each judge. It isn’t really any better in other parts of the country. We simply do not have enough courts and judges to listen to every complaint, legitimate or not, within a reasonable time. The result is that reasonable claims may take years to be heard and then additional years to be resolved. After that there is an appeal period that adds to the delay. Thus it is not unusual to hear of a civil complaint to force a seller to honor a real estate contract taking five, ten or even fifteen years to resolve.
By Linda Neil and Raul Padilla
Everyday more and more foreigners, people from the U.S., Canada, Asia and Europe, have found Mexico to be an ideal location for healthy retirement. Others have come to Mexico as a result of job transfers. Others still, taking advantage of electronic and wireless communications, seek out delightful areas in which to live and work from their in-home offices and studios.
OR………….. WHAT IS THE VALUE DECLARED IN YOUR DEED?
(When a Foreigner Sells his Mexican Property)
by Linda Neil with Raul Padilla PadillaLic. Mario Valdez, fiscal advisor
Just as in the United States or Canada, the foreigner selling his trust rights in real estate must pay a tax on his profits. to S.A.T., previously known as Hacienda, Mexico’s version of Uncle Sam. None of us like to pay taxes but we’ve become accustomed to paying them in our own countries and, believe it or not, Mexico’s tax is probably no worse than what we would pay in our own native countries.
In Mexico, the ONLY authority who is permitted to draft a deed transferring real property or an interest in real property (such as the fideicomiso) is the Mexican Notary Public. This person is different from a Notary Public in the United States where a simple exam, bond, and a rubber stamp can make a Notary Public out of most people. Nor it is similar to Canada’s Notary Public who must meet a few more stringent requirements to qualify. Not so many, however as the Mexican Notary.
“XYZ Company, S.A. de C.V.” – What does all THAT mean?
By Linda Neil
The Sociedad Anonima de Capital Variable, translated literally is an anonymous society of variable capital. This is equivalent to the U.S. corporation in which there are stockholders. In Mexico it is governed by the Law of Mercantile Societies. More and more, foreigners are forming Mexican mercantile corporations which end with the initials, “S.A. de C.V.”, to do business and to achieve their financial goals in Mexico. The SadeCV is similar to the “Inc.” of the United States and Canada.
By Alicia Parra
For those brave souls who are building their home in Mexico, an important part of the process is the Manifestation. This is a notification made before the local property tax department. It signals the termination of the construction and tells the world that the house is ready to be occupied.
All too often, this notification is not made in a timely manner and can cause problems and additional expense, especially when the house is being sold.
The transfer of title in a Mexican real estate transaction can be confusing for foreign buyers, especially if their understanding of the Spanish language is less than perfect. Prior to the establishment of escrow companies in Mexico, buyers hired attorneys, did the work themselves or, in many cases, just didn’t worry about receiving a title!
Or what to expect when you buy a condominium in Mexico!
The cottage on a tiny individual lot or the mansion built on a grand expanse of land. This type of home ownership has been the dream of many in the Western world where land has been plentiful and where the family lived in ONE home and did not have other properties for vacations, recreation and retirement.
By Linda Neil
Title insurance, so common in many parts of the United States and Canada, is in its infancy in Mexico. While the Public Registry system operates in much the same manner as in other parts of the world, the actual work is still performed manually in many places in Mexico. Deeds are handwritten into large books, a computerized system is still a dream and title plants are non-existent. Maps of subdivisions and properties are often uncommon or incomplete.