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Real Estate Playa del Carmen
This is our list of all the real estate in playa del carmen and riviera maya:
condos for sale, apartments for sale, villas for sale, lots for sale, business
for sale.
As locals we will find just the right property to suit your needs. You can buy a
small beachfront studio, condo or a complete home with a yard and a garage on a
golf course. You can even buy a beachfront lot big enough to build a hotel
resort on.
Playa del Carmen has become a hot destination for tourists world-wide.
Currently, the fastest growing city in the world, Playa has a unique charm and a
quirkiness that seem to be almost irresistible to anyone who visits.
Real Estate questions and answers gives you a general ideas of how things
work when you buy properties in Playa del Carmen, Mexico.
1-Can foreigners really own property in
Mexico?
2-Who is involved in real estate transactions in Mexico?
3-What is the restricted zone and " Fideicomiso"
4-Mexican corporations with foreign investment
5-Are the permits that Article Twenty Seven requires of foreigners
hard to get?
6-What about condominiums or houses located in Acapulco, Puerto
Vallarta,
Cancun, or any of the resorts of Mexico'?
7-Are time shares legal to obtain by foreigners in Mexico?
8-What happens if a foreigner decides to sell after some years?
9-Can the foreigner rent or sublet his apartment in these
condominiums or trusts?
10-What happens if the beneficiary dies?
11-How is a trust set up?
12-What are the responsibilities of the beneficiary?
13-Is it true that the new law that regulates foreign investment
is against new investments?
14-Can foreign investors come to Mexico and buy an established
industry?
15-What activities are reserved to Mexican citizens?
16-Which are the activities where capital is welcome?
17-Are the percentages to be owned by foreigners inflexible?
18-What happens with investments already made by foreigners not
linked with
foreign centers of decision?
19-What should you do when buying a home?
20-Incorporating a Business in Mexico
It is extremely important to retain the services of a Mexican attorney, or
Mexican Notary before doing any transaction like the mentioned below.
CAN FOREIGNERS REALLY OWN PROPERTY IN MEXICO?
Yes, Americans and other foreigners may obtain direct ownership of property in
the interior of Mexico. However, under Mexican law, foreigners cannot own
property outright within the restricted zone. Instead, a real estate trust must
be set up to hold title for the foreigner. Since foreigners are not able to
enter into contracts in buy real estate, they must have a bank act on their
behalf, much as a trust is use to hold property for minors because they also can
not contract. The following is a brief outline of the law
regarding such trust, known as "fideicomisos", but potential buyers should
always get advice and have all real estate transactions overview by a licensed
Mexican attorney.
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WHO'S INVOLVED IN REAL ESTATE TRANSACTIONS IN MEXICO?
Normally, there are three to four players involved in any real estate
transaction in the restricted zone:
A real estate company
The buyer's lawyer
A bank
A public notary
All four are helpful in their respective areas in assisting with real estate
transactions. Transactions outside of the restricted zone do not involve a bank
since it is not necessary to establish a real estate trust in those
areas. Otherwise the transactions are much the same. Because of the similarities
of real estate transactions in general, it is easy to assume that the basic
terms and principles which are familiar in the United States also hold true in
Mexico. This assumption becomes easier to make when United States real estate
terminology is adopted for transactions in Mexico. Much of the paperwork is
similar, if not exactly the same, as that used in the US. Although, there are
many aspects of Mexican real estate transactions
that are identical to procedures carried out in the United States, there are
many aspects that are completely different. As a rule, a foreigner should assume
nothing.
Mexican real estate transactions are not carried out in the same manner as
United States real estate transactions. The buyer must retain professionals to
assist in the transaction. Mexico has yet to regulate real estate transactions.
Real estate agents and brokers are not legally licensed in Mexico. Consequently,
a foreign buyer cannot always depend on the normal safeguards that would be
applied to real estate transactions in the United States. The old saying "let
the buyer beware" is very appropriate. Anyone
can set up a real estate company in Mexico. There are no special requirements or
brokerage licenses to obtain. A would-be real estate agent merely has to
establish a Mexican corporation, obtain a work visa, and he is in business.
There are good reasons why the real estate industry in the United States is
highly regulated. Until the real estate industry is regulated in Mexico, there
will always be some real estate companies who prefer that buyers know as little
as possible about real estate transactions. After all, a buyer cannot ask
questions if he does not have any knowledge of the laws.
Currently there is nothing similar to a Real Estate Commissioner or a Department
of Real Estate in Mexico. Some states are beginning to look at some kind of real
estate legislation, but it might be some time before this is a reality. The
American Embassy and the American consulates in Mexico are good places to start
when trying to determine if a real estate company is reputable. Some of the real
estate companies have established quite a reputation for themselves at some of
the Consulates.
A Mexican attorney should be involved to draw up contracts and to review the
conditions and terms of sale. Additionally, an attorney can do a title search
and point out any problems or alternatives a buyer may have. The buyer should
always have his or her own attorney rather than using the attorney of the seller
or some attorney used by a real estate company free of charge. As the old saying
goes, you get what you pay for, and usually if someone's services are offered
free of charge you are probably paying for them in some other way. Legally, only
a licensed Mexican attorney should provide advice on the law. If an attorney is
licensed in Mexico he should be able to produce a "cédula profesional." This
document is a registered
license to practice law in Mexico and includes a photo of the attorney and his
signature. To be sure that an attorney is licensed in Mexico, a foreign buyer
should ask to see the attorney's license, or have the attorney's license number
included in a retainer agreement before employing any services.
American attorneys are not licensed to practice law in Mexico and should not
give advice on Mexican Law. I should clarify, here, that I am referring to
individuals who are licensed to practice law in the United States, and not
merely individuals who are citizens of that country. There are currently very
few Americans who are licensed to practice law in Mexico. The fact that a person
is licensed to practice law in the United States in no way allows him or her to
practice law in Mexico: Mexican or United States law.
Besides formalizing your real estate transaction, an attorney can be very
helpful in saving you money. This is because attorneys are involved in many
different transactions and have contacts with banks, notaries, and the Mexican
government on a regular basis. Because of this they are aware of the most
competitive cost and fees involved in a transaction and can make sure that the
buyer is given the best possible prices. An attorney can also inform the buyer
regarding his or her legal options and by doing so can make
sure that no opportunities are missed: tax planning considerations, closing
costs which should be paid by the seller, and ways of taking title to the trust
rights which make sense for the particular circumstances of a specific buyer.
Very often one piece of good advice can save the buyer thousands of dollars in
tax savings or other savings when the buyer eventually sells the property.
When looking for an attorney it is important to remember that any Mexican
attorney can normally handle a real estate transaction. The buyer is not limited
to only the local attorneys where the property is located. All real estate
transactions involving a trust are governed by federal law. This means that all
such transactions are carried out the same way regardless if the property is in
Cancun or Los Cabos.
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THE RESTRICTED ZONE AND "FIDEICOMISOS"
The law declares that the Mexican nation has original ownership to all land and
water in Mexico, as well as minerals, salts, ore deposits, natural gas and oil;
but that such ownership may be assigned to individuals.
The Mexican Constitution prohibits direct ownership of real estate by foreigners
in what has come to be known as the "restricted zone." The restricted zone
encompasses all land located within 100 kilometers (about 62 miles) of any
Mexican border, and within 50 kilometers (about 31 miles) of any Mexican
coastline. However, in order to permit foreign investment in these areas, the
Mexican government created the "fideicomiso," (FEE-DAY-E-CO-ME-SO) which is,
roughly translated, a real estate trust.
Essentially, this type of trust is similar to trusts set up in the United
States, but a Mexican bank must be designated as the trustee and, as such, has
title to the property and is the owner of record. The Mexican Government created
the "fideicomiso" to reconcile the problems involved in developing the
restricted zone and to attract foreign capital. This enabled foreigners, as
beneficiaries of the trusts, to enjoy unrestricted use of land located in the
restricted zone without violating the law.
A "fideicomiso" is a trust agreement created for the benefit of a foreign buyer,
executed between a Mexican bank and the seller of property in the restricted
zone. Foreign buyers cannot own real estate in the restricted zone due to
Constitutional restrictions. The bank acts on behalf of the foreign buyer,
taking title to real property. The bank, as trustee, buys the property for the
foreigner, then has a fiduciary obligation to follow instructions given by the
foreigner who is the trust beneficiary. The trust beneficiary retains and enjoys
all the rights of ownership while the bank holds title to the property. The
foreigner is entitled to use, enjoy, and even sell the property that is held in
trust at its market value to any eligible buyer.
In order to allow foreigners to enter into the agreement contained in the Calvo
Clause, Mexico requires all foreigners to apply for and obtain a permit from the
Ministry of Foreign Affairs prior to contracting to acquire real estate in
Mexico. This is currently done by the trustee/bank at the time a real estate
trust is set-up.
Given the changes made for 1997 in the foreign investment Law, and the fact that
a buyer can now apply for and obtain a trust permit in a matter of days, it is
always better to secure the trust permit from the Ministry of Foreign Affairs
before entering into any contract.
The bank, as trustee, must get a permit from the Ministry of Foreign Affairs to
establish a real estate trust and acquire rights on real property located within
the restricted zone. The purpose of the trust is to allow the trust's
beneficiary the use and exploitation of the property without constituting real
property rights. The beneficiaries of the trust (fideicomisarios) may be:
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Mexican corporations with foreign investment
Foreign individuals or legal entities
The law defines "use" and "exploitation" as the right to use or possess the
property, including its fruits, products, or any revenue that results from its
operation and exploitation by third parties or from the bank/trustee.
The law does not clarify how trust permits will be issued. Article 14 of the law
states that the Ministry shall decide on issuing the permits "...considering the
economic and social benefit, which the realization of
such operations imply for the nation." The basic criteria used to determine such
benefits are likely to change somewhat with the publication of the new foreign
investment regulations. However, it is reasonable to anticipate that some of the
unwritten rules used by the Mexican government in the area of real estate trusts
will be included in the new foreign investment regulations. It is also possible
that some of the confusing elements will be eliminated. It is important to
understand the application of the current regulations, even if they are going to
be replaced, as well as some of the unwritten policies the government has used
in the past, to better understand what criteria will be used by the Ministry in
the future.
The Ministry of Foreign Affairs must grant any petition for a trust permit that
complies with the stipulated requirements within 5 working days following the
date of its presentation to the Ministry's central office in
Mexico City. It must be granted in 30 days if the application is submitted to
one of the Ministry's state offices. The Ministry of Foreign Affairs must
confirm the registration of any property acquired by foreign-owned Mexican
corporations a maximum period of 15 days following the filing of the petition.
In both cases, if the maximum period passes with no action by the Ministry, the
trust permit or registration are considered authorized.
There is a common misconception among foreigners investing in Mexico that once
the trust expires, the beneficiary loses all rights and benefits of the sale of
the property held in trust. This is not the case. On the contrary, the
beneficiary has a contractual right under the trust agreement with the Mexican
bank to all benefits that may result from the use or sale of that property, even
though he does not hold title to the property. Under Mexican Law, the bank, as
trustee, has a fiduciary obligation to respect the rights of the beneficiary.
A real estate trust is not a lease. The beneficiary can instruct the bank to
sell or lease the property at any time. The beneficiary can develop and use the
property to his liking and benefit, within the provisions of the law. Generally,
the law allows most activities engaged in by foreigners.
Information provided by Dennis Peyton of Peyton, Amador & Connell
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Q: Are the permits that Article Twenty Seven requires of foreigners hard to get?
A: The foreigner applying for permission to buy land must prove his immigrant
status in Mexico. Non-residents and tourists can buy land through a trust. If
the foreigner resides in Mexico, he can acquire directly the property as long as
it is not within thirty-one miles from seashores or sixty-two point five miles
from the borders.
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Q: What about condominiums or houses located in Acapulco, Puerto Vallarta,
Cancun, or any of the resorts of Mexico'?
A: The Constitution forbids direct ownership by foreigners inside thirty-one
miles from the sea or sixty-two point five miles from the borders. However, they
have always been permitted to buy on a trust basis. In this type of purchase, a
bank is the trustee, or owner, of the real estate. The beneficiary, having all
the rights to use, enjoy and sell, is not considered the owner of record. This
is not a violation of what the constitution forbids. The trust is established
for thirty years and can be extended for one additional thirty year period.
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Q: Are time shares legal to obtain by foreigners in Mexico?
A: It is legal for the foreigner to obtain a time share as long as he does not
reside in that time share permanently. The foreigner must obtain a copy of the
property ownership when he buys the time share and club memberships are illegal.
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Q: What happens if a foreigner decides to sell after some years?
A: He may do so, and he should profit by an increasing value.
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Q: Can the foreigner rent or sublet his apartment in these condominiums or
trusts?
A: Yes, he may rent to anyone he desires, keeping the rent for periods not
exceeding ten years.
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Q: What happens if the beneficiary dies?
A: At the time the trust is set up, a substitute beneficiary is named. This
person has the same rights as the first beneficiary in case of his death. No
Will need be probated in this case.
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Q: How is a trust set up?
A: The trust agreement is drawn up before a notary public. The Ministry of
Foreign Affairs and the Commission on Foreign Investments must have approved the
operation, with the trustee requesting this authorisation. The participants in
the transaction are the seller who must have clear title to property, the bank
as trustee, and the buyer or beneficiary of the true, or his representative.
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Q: How much does it cost to buy properly in a trust?
A: There are expenses for the authorisation from the Ministry of Foreign
Affairs, the registration in the Registry of Foreign Investments, and the fees
of the notary public. The bank charges one percent of the amount of the
transaction for the preliminary studies and the drawing up of the agreement.
The total expenses for the transaction should be between 11-1/2 percent and
12-1/2 percent. In addition, there is a yearly fee of one percent of the
property value charged by the bank for its services as trustee.
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Q: What are the responsibilities of the beneficiary?
A: He must pay the trust annual fees punctually. Also, he must pay property
taxes, water, and other utility bills when due.
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Q: Is it true that the new law that regulates foreign investment is against
new investments?
A: Not at all. The new law is not only fair, but even positive in the sense that
now everybody knows where he stands. In the long run, it is going to create a
better atmosphere for mutual respect and understanding. Prospective foreign
investment from now on will require permission from the Commission of Foreign
Investments.
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Q: Can foreign investors come to Mexico and buy an established industry?
A: As long as they acquire forty-nine percent (49%) of that corporation, there
is no required permit.
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Q: What activities are reserved to Mexican citizens?
A: The new law dictates that in radio and television, urban and inter-urban
transportation, gas distribution, and forestry, only Mexican individuals, or
Mexican corporations with a clause that forbids any foreigners to own shares,
can participate.
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Q: Which are the activities where capital is welcome?
A: In almost every thing else.
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Q: Are the percentages to be owned by foreigners inflexible?
A: No. In those fields where foreign investment is permitted the National
Commission on Foreign Investment might decide to increase the percentage if it
is in the national interest.
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Q: What happens with investments already made by foreigners not linked with
foreign centres of decision?
A: Foreign residents not linked with foreign interests or with foreign centres
of decision are considered equal to Mexicans with respect to investments and are
not subject to any percentages.
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Q: What should you do when buying a home?
A: After you make the decision to buy, a first-class notary public of your
choice should take charge. It is customary for the buyer to select the notary
public. The Public Registry of Property has to be checked to
ascertain if the property in question has any liens or encumbrances and if the
title is in good legal standing. The notary does this and also presents the
application to the Ministry of Foreign relations when a foreigner is the buyer.
If everything is clear, then the sale proper takes effect. It is also
recommended that you hire an attorney to review the contract.
Information provided by the Law Offices of Jaime B. Berger Stender,
Tijuana, Baja California, Mexico.
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Incorporating a Business in Mexico
1) How to Incorporate a Business in Mexico
When thinking international, doing business in Mexico is the same as everywhere
else, it is only a different business environment; and as such, one must be
alert to the different rules of the game, be pro-active and do the homework. As
in the U.S., there are a variety of business formats in Mexico in which a
foreign company can operate. The most common type of business entities are
corporations and limited partnerships (under any of these legal entities, a
foreign company may operate an independent company, a branch, affiliate or
subsidiary company in Mexico). For the sake of simplicity, this summary report
will only address the two most common ways of structuring a company: Corporation
(Sociedad Anónima) and Limited Liability Companies (Sociedad de Responsabilidad
Limitada).
Corporation (Sociedad Anónima or Sociedad Anónima de Capital Variable)
Limited Partnership (Sociedad Responsabilidad Limitada)
They may be up to 100% foreign-owned. They may be up to 100% foreign-owned.
Minimum capital requirements is $50,000 Pesos in capital stock. Minimum capital
contribution is $3,000 Pesos.
Minimum of two shareholders in the case of a corporation and no maximum.
Administration maybe entrusted to the Board of Directors. Minimum of two
partners to incorporate a corporation with limited liability.
Management is performed by the partners.
No limit to the life of a corporation. The company exists while there is a
business purpose and partners remain the same.
Free transferability of stock ownership. Restricted transferability of
partnership shares. Any changes in the partnership composition may cause the
partnership to be liquidated.
Operational losses incurred by the Mexican entity or subsidiary may not be used
by the U.S. parent company. If structured properly, it may offer tax advantages
by allowing operational losses incurred by the Mexican entity to be used by the
U.S. parent company.
Limited liability to shareholders. Limited liability is afforded the partners.
In order to select the appropriate corporate structure, one must carefully
assess the fiscal as well as operational benefits of the proposed business
venture.
The process of establishing a corporation "Sociedad Anónima" or a limited
Partnership company "Sociedad de Responsabilidad Limitada" requires of the
following elements:
Name of the Mexican Company.
Capital structure of the Mexican company.
Names of the partners or stockholders of the Mexican company.
Form of management and names of administrators and
Representatives of the Mexican company.
Name of the auditor of the Mexican company.
Name of Company
To incorporate a Mexican company, a permit must be requested before the
Secretariat of Foreign Affairs, which authorizes the use of the name of the
corporation in Mexico. It is customary to submit a list of three possible names
for your Mexican Company.
Capital Structure
The amount and structure of the capital allocation of the company has to be
determined in Pesos (Mexican currency) and stated in the articles of
incorporation and by laws.
Shareholders or Number of Partners
Mexican Law allows that partners or stockholders be individuals or legal
entities.
Administration and Representation
The administration of the Mexican company can be entrusted to either a board of
directors or a general manager. You may also appoint middle managers and
attorneys in fact depending on the company's needs.
Statutory Auditor
Mexican law also requires the appointment of a board of surveillance formed by
two or more statutory auditors, whose main function is the supervision of the
corporation's administration and operations and protecting the partners' or
stockholders' interests.
Before initiating operations in Mexico, it is extremely important to retain
the services of a Mexican attorney, or Mexican Notary. This web site does not
take responsibility for any information distributed and does not take
responsibility if you use this information. Remember Laws Change constantly in
Mexico. It is extremely important to retain the services of a Mexican attorney,
or Mexican Notary before doing any transaction like the mentioned above.
Well if you need a Lawyer here is
his info:
Alberto Alvelais Pizarro
Alvelais, Medina & Lezama S.C.
Av. Nader 40 Despacho 42, Col Centro.
C.P. 77500 Cancun, Quintana Roo
Tel: 52 (998) 8983115
Cel: 52 (998) 1026502
Email Us
Spanish English and French spoken
Immigration document, real-estate transactions, corporations and much more. |
