Change Affects Ownership of Mexican Property

NEW CHANGE

Now with the advent of the electronic age, things have changed in Mexico as they have elsewhere. No longer are corporation documents and deeds only manually recorded on paper that can fade or deteriorate. Deeds and corporation ownership records in Mexico are now also being recorded on a modern computerized database, thus avoiding the ravages of time.

As a result, corporations in Mexico including LLC's (Limited Liability Corporations) will no longer have a limited life of 99 years. They will live until the stockholders decide to dissolve the corporation and as always, shares of the corporation may be sold or passed to others by gift or bequest as inheritance.

This change to make the life of corporations perpetual just adds further evidence to the long list of advantages of the corporation form of property ownership in Mexico.


HISTORY In 1917, foreign ownership of Mexican real estate along the coast and near the borders was “restricted” under the Mexican Constitution. This law was changed in 1970 with the Trust (Fideicomiso) Law, which allowed foreigners to buy land within the “Restricted Zone” (50 km from the coast and 100 km from a border), provided they used a bank trust. Under the trust system, the foreigner was the beneficiary and the Mexican bank was the trustee. Trusts could last from 20-50 years, depending upon the wishes of the buyer. After expiration, the buyer could renew the trust for a fee, if he still owned the property. In 1994, the new “Corporation Law” was adopted in Mexico, allowing foreigners to own property in the name of their own Mexican corporation, and thus hold the title to the property in their own hands. No middle-man bank and no trustee fees. Plus, the corporations would live for 99 years—twice as long as the trust. Originally, the 99-year life was adopted because all the corporation documents were manually recorded on paper and it was thought that over time, the recording data and ink could fade.
NEW CHANGE Now with the advent of the electronic age, things have changed in Mexico as they have elsewhere. No longer are corporation documents and deeds only manually recorded on paper that can fade or deteriorate. Deeds and corporation ownership records in Mexico are now also being recorded on a modern computerized database, thus avoiding the ravages of time. As a result, corporations in Mexico including LLC's (Limited Liability Corporations) will no longer have a limited life of 99 years. They will live until the stockholders decide to dissolve the corporation and as always, shares of the corporation may be sold or passed to others by gift or bequest as inheritance. This change to make the life of corporations perpetual just adds further evidence to the long list of advantages of the corporation form of property ownership in Mexico.
The buyer, not the bank, is the owner. The buyer holds his own deed. No bank trust fee to create the trust. No permission from the bank is required to build, improve, rent or sell the property. No exit fee to the bank when the property is sold. No annual trustee fee to the bank. The corporation may be used by the buyer to get a working visa (FM-3). The corporation may open bank accounts in USD's and Pesos. The corporation life is unlimited. For further information concerning advantages of the corporate form of property ownership, contact your Trans Caribbean sales representative.
The Trans Caribbean Times is published as a newsletter for the many clients and friends of Trans Caribbean Trust Company. It’s designed to inform its readers of the current developments, general information, plus other interesting tidbits. For those who have invested—congratulations! For more information on new listings and new investment opportunities, contact us at: oceanfront@transcaribbeantrust.com