Buying Property and Land in Mexico Through a Company

Using a company to hold property and land in Mexico can be useful for commercial investments, development projects, rental businesses, or properties owned by multiple investors.

The appropriate structure varies according to the property's location, intended use, and ownership requirements, with additional considerations applying to foreign buyers in areas such as Mexico's Restricted Zone.

Key Takeaways

• Foreign investors can use Mexican companies to hold qualifying property.
• Residential property in the Restricted Zone generally requires a fideicomiso.
• Land purchases require checks on title, ejidal status, zoning, and development rights.
• Company ownership brings additional tax, accounting, and compliance obligations.

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The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.

Can foreigners purchase property in Mexico?

Yes. Foreigners can purchase Mexican real estate, either personally or through an appropriate corporate structure, although restrictions apply based on the property's location and use.

Outside the Restricted Zone, foreigners can acquire real estate after completing the required process with the Mexican government, including the applicable agreement to observe Mexican law concerning the property.

The government's current investment procedure specifically provides for foreign individuals and legal entities to acquire property outside coastal and border areas.

A foreign investor can also establish or use a Mexican company to hold property.

A Mexican company with a foreign admission clause can have foreign shareholders, but its ability to hold property directly depends on the location and purpose of the property.

This distinction becomes particularly important for residential properties in coastal destinations such as Cancún, Playa del Carmen, Puerto Vallarta and Los Cabos.

These areas can fall within the Restricted Zone, meaning that setting up a company does not simply eliminate the restrictions that apply to foreign ownership.

For a buyer considering a company, the main questions are:

• Is the company Mexican or foreign?
• Where exactly is the property located?
• Is it residential or non-residential?
• Will it be used personally, rented out, or operated as part of a business?
• Is the property land, an existing building, or a development project?
• Will there be one investor or multiple shareholders?

These questions should be answered before the purchase agreement is signed.

How does buying property work in Mexico’s Restricted Zone?

Mexico's Restricted Zone covers land within 100 km of the country's international borders and 50 km of its beaches. Under Article 27 of the Mexican Constitution, foreigners cannot acquire direct ownership of land and water within this zone.

For residential property in the Restricted Zone, foreigners can instead obtain the right to use and enjoy the property through a fideicomiso, a Mexican bank trust.

The arrangement can also be used when the beneficiary is a Mexican company with a foreign admission clause, provided the property is intended for residential purposes.

The fideicomiso can run for up to 50 years and may be extended.

This means forming a Mexican company does not by itself allow a foreign investor to take direct title to a residential property in the Restricted Zone.

The rules are different for non-residential property.

A Mexican company with a foreign admission clause can acquire direct ownership of real estate in the Restricted Zone when the property is used for non-residential purposes.

The company must then submit an acquisition notice to the Secretaría de Relaciones Exteriores (SRE) within 60 business days of the acquisition.

A foreign investor purchasing a beachfront condominium for personal or residential use cannot simply establish a Mexican company and take direct title to the property.

A company acquiring qualifying commercial property, however, can use a different ownership structure and comply with the applicable SRE notification requirement.

Mexican company vs fideicomiso for foreign buyers

For foreign buyers, a Mexican company is generally suited to qualifying business and non-residential property ownership, while a fideicomiso is commonly used for residential property in Mexico's Restricted Zone.

A fideicomiso is a Mexican trust arrangement in which a Mexican bank acts as trustee.

For residential property in the Restricted Zone, the bank holds title as trustee while the foreign buyer is the beneficiary, with the right to use and enjoy the property under the trust agreement.

The fideicomiso requires authorization from the Secretaría de Relaciones Exteriores (SRE) and must be formalized through a public deed.

The key differences are:

Buying property in Mexico through a company vs personally

In Mexico, personal ownership is generally simpler for individual residential properties, while company ownership is more relevant to commercial property, development, multiple properties, or investments involving several shareholders.

Personal ownership may be more suitable for:

• A property intended primarily for personal use
• A straightforward purchase with one owner
• Holding an asset without a separate business operation
• Avoiding additional corporate administration and filings

Company ownership may be more relevant for:

• Separating the property from the owner's personal assets
• Allocating ownership among multiple investors
• Reinvesting income within an ongoing property business
• Managing several properties under a single corporate structure

The choice also interacts with Mexico's Restricted Zone and land ownership rules, which can make a fideicomiso more appropriate for certain residential properties or require additional checks for land.

Company ownership also brings additional corporate accounting, tax, and compliance requirements, so these costs should be weighed against the purpose of using a company.

What are the taxes when buying Mexican property through a company?

The main taxes and costs when buying Mexican property through a company include real estate acquisition tax, property taxes, taxes on rental income, and taxes on a future sale, alongside notary, registration, and corporate compliance costs.

The purchase can be subject to a real estate acquisition or transfer tax, generally imposed at the state or municipal level.

Mexico's general VAT rate is 16%, although its application to property depends on the transaction and use of the property.

Residential rent for property used exclusively as a home is generally VAT-exempt, while furnished accommodation, hotels and lodging do not receive the same exemption.

Rates and calculation methods vary by jurisdiction, and both individuals and legal entities can be liable when acquiring real estate.

Additional costs can include:

• Appraisal fees
• Legal and professional fees
• Fideicomiso or bank fees, where applicable
• Property management costs, where applicable
• Corporate formation and maintenance costs, where applicable

Rental income can also have different tax treatment based on how the property is used.

Residential leasing can generally be exempt from VAT when the property is used exclusively as a home, while furnished residential properties, hotels, lodging businesses, and commercial rentals can be subject to VAT under applicable rules.

A company can also create additional corporate accounting and tax compliance requirements that would not apply in the same way to an individual owner.

The relevant comparison is therefore the total tax and ownership cost, rather than whether corporate ownership produces a lower tax bill by itself.

Can a non-resident buy land in Mexico?

Yes, non-residents can buy land in Mexico, subject to the country's foreign ownership rules and the property's location.

Being a non-resident does not by itself prevent a foreigner from acquiring Mexican real estate.

The key distinction is whether the property is within the Restricted Zone and whether the applicable ownership structure allows direct title or requires a fideicomiso.

For land purchased through a company, the company's legal status, the property's intended use, and its location also determine whether it can hold direct title.

What is the step by step process when buying a property or land in Mexico through a company?

Buying property or land in Mexico through a company generally involves choosing the appropriate ownership structure, verifying the property and company's eligibility, completing due diligence, formalizing the purchase before a notary, and registering the transaction.

1. Determine the property and its legal status

Identify whether the asset is residential, commercial, agricultural, or development property, and establish whether it is privately owned or ejidal.

Check whether it falls within Mexico's Restricted Zone, as location and intended use affect the available ownership structure.

2. Establish or prepare the company

If the company does not already exist, establish the appropriate Mexican corporate structure.

For an existing company, confirm that its corporate purpose, constitutional documents, and authorized representative allow it to acquire and hold the property.

3. Confirm acquisition eligibility

Verify that the company can legally acquire the specific property and complete any required foreign-investment or SRE formalities.

For property in the Restricted Zone, confirm whether direct corporate ownership or a fideicomiso applies.

4. Conduct due diligence

Verify the title, seller's authority, liens, boundaries, zoning, permitted use, and registration status.

For land, confirm whether it is private or ejidal and whether the intended development or use is permitted.

5. Negotiate and sign the purchase agreement

Once the structure and due diligence are satisfactory, agree on the purchase price, payment terms, conditions, and completion requirements.

Any deposit should be subject to appropriate contractual and legal protections.

6. Complete the notarial transfer

A Mexican notary formalizes the transaction and prepares the deed, while coordinating the applicable tax and registration requirements.

7. Pay taxes and transaction costs

Settle the applicable acquisition taxes, notary and registration fees, appraisal costs, and other transaction expenses.

The amount varies by property and jurisdiction.

8. Register the property and maintain compliance

After completion, register the transfer with the relevant property registry and update the company's records.

The company must then maintain its applicable tax, accounting, and corporate obligations.

For a property held through a fideicomiso, the relevant trust and bank administration requirements must also be maintained.

What are the risks of buying property or land in Mexico?

The main risks of buying property or land in Mexico include title problems, ejidal ownership, unsuitable corporate structures, regulatory restrictions, unexpected costs, and difficulties with development or resale.

Unclear or defective title

Ownership records should be verified before purchase.

Undisclosed liens, competing claims, boundary issues, or gaps in the property's registration can complicate ownership and resale.

Ejidal land

Land that remains under the ejido regime cannot simply be treated as ordinary private property.

A buyer who acquires land without confirming its legal status and transferability can face significant ownership problems.

Incorrect ownership structure

Using a company does not automatically solve Mexico's property ownership restrictions.

A structure that is unsuitable for the property's location or intended use can create additional legal and administrative complications.

Corporate compliance

Holding property through a company creates ongoing obligations beyond the property itself.

Accounting, tax filings, corporate records, and other compliance requirements must be maintained even when the property generates little or no income.

Unexpected ownership costs

The total cost can extend beyond the purchase price to include taxes, professional fees, maintenance, corporate expenses, financing costs, and, where applicable, fideicomiso or bank fees.

Zoning and development restrictions

Land purchased for construction or development may be subject to zoning, environmental, infrastructure, or permitting requirements.

Failing to verify these before purchase can limit how the property can be used.

Resale and exit risks

Selling a property held through a company can involve additional legal, tax, and corporate considerations.

The intended exit strategy should therefore be considered before choosing the ownership structure.

Is buying property in Mexico a good investment?

Buying property in Mexico can be a worthwhile investment when the purchase price, location, rental potential, operating costs, and exit prospects support the expected return.

Buying through a company does not by itself make a property more profitable. The investment case should account for:

Net return = rental income − taxes − maintenance − management − insurance − financing − corporate or trust costs

Investors should also factor in vacancy, currency movements, and the costs involved in eventually selling the property.

For land, zoning, infrastructure, access, title status, permitted use, and development potential can be more important than the purchase price alone.

The ownership structure should therefore support the investment strategy rather than determine it.

Conclusion

A company can change the economics of a Mexican property investment long after the purchase is completed.

The structure can influence how income is retained or distributed, how multiple investors participate, how additional properties are added, and how easily the investment can eventually be transferred or sold.

That makes the decision especially relevant for investors building a property portfolio or operating a business in Mexico, rather than simply acquiring a single asset.

A structure that works well for one property may become restrictive or unnecessarily expensive as the investment grows.

The broader lesson is to treat the company as part of the investment's long-term architecture.

In Mexico, the real benefit comes when the ownership structure continues to serve the investment as it moves from acquisition to income generation, expansion, and eventual exit.

FAQs

How long can I stay in Mexico if I buy a house?

Buying a house or investing in Mexican property does not automatically grant residency or extend your permitted stay.

You may qualify for temporary or permanent residence under Mexico's immigration rules, but the property purchase or investment itself does not determine how long you can remain in the country.

What is the difference between a fideicomiso and a trust?

A fideicomiso is Mexico's statutory civil law equivalent of a trust, but the two are not legally identical.

A common law trust developed through the Anglo-American legal tradition, while a Mexican fideicomiso is governed by Mexican statutory law and uses a different legal structure.

Where are the best places to buy property in Mexico?

Popular Mexican property markets include Mexico City, Cancún and the Riviera Maya, Puerto Vallarta, Los Cabos, Mérida, and Guadalajara, with each market offering different residential, tourism, commercial, and investment opportunities.

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