¡Why Majahual!
The new four lane, divided highway, currently under construction, connects Mahahual with Chetumal, the capitol of Quintana Roo, and the new Costa Maya international airport. Detailed federal and state planning is now underway to connect Cancun, Chetumal and Escarcega by rail with the intention of accelerating tourism and economic growth on the whole Costa Maya. Moreover the Costa Maya electrification program is nearing completion. The power station in Mahahual is already completed and in use. Not far from this hidden paradise is the beautiful lagoon of seven colors in Bacalar, a body of fresh water, whose breathtaking seven colors and sandy bottom are a stunning replica of the Caribbean Sea.
With the government's development plans, Mahahual is becoming the next important tourist destination in the Caribbean.
Although at the moment, a lot of the area is still a wild, virgin piece of paradise lost in time and some beaches are untouched by the hand of man, there are now all the basic services in the main, center town of Mahahual: electricity, water, sewer, gas, telephone… and the government keeps pushing to develop this area into the next, hot tourist destination.
These government development plans are thought of as a great detonator for the economic activity in this area. Those assigned to the planning and structuring of the area have come up with the concept of eco-arqueo-tourism, the kind that centers on the culture, sports, nature, and adventure.
This major plan for Costa Maya has already been put into gear and is gradually becoming a reality, steadily changing to fulfill the goals planned. The highway is already finished and full-functioning all the way from Mahahual to Chetumal, where the closest international airport is, only an hour and a half away, as well as the highway connecting Mahahual to Xcalak, and construction of this highway north of Mahahual is well under way.
130km of highway with access roads for the whole stretch of Costa Maya is almost complete, potable water system will be installed to supply the demand, electricity to meet the growing needs of this area, and a sewer system to drain all wastes produced.
This is just the beginning. Six golf courses will be built, along with three national airports, as well as three marinas and three docks for cruise ships distributed along the coast.
Costa Maya Mexico is located on the southern Caribbean coast of the State of Quintana Roo, in the heart of the Caribbean Sea and the Mayan World, all along a stretch of white, sandy beaches, framed by turquoise, crystal waters, where ocean and sky intertwine. Costa Maya is 130 km of undeveloped coast and 39,500 hectares of emerald green forests. With a considerable number of incomparably beautiful, untouched beaches, internal lagoons, cenotes in the middle of the jungle, an abundance of wildlife, and a vibrantly alive reef, Costa Maya holds a promise for all those looking for a potential investment with business in mind, as well as for nature lovers seeking for a secluded spot to relax and enjoy life on the beach.
Mexico's Costa Maya is the Last Frontier, where the sounds of nature surround you, and it is not unusual to sight a wide variety of wildlife typical of the region, which includes over 108 different species. It is not uncommon to see turtle nests, ocelots, monkeys, toucans, and other species you'll be discovering for the first time. With a mysterious air that surrounds it, the jungle is an enchantress that beckons you to explore it.
The Costa Maya is the place to forget about tension and stress, a place to lay back on your hammock under majestic palm trees, sipping a cool drink, watching schools of silver fish jump out of the sea and soar the surface. Life is quiet and simple here, with just enough hotels and restaurants to receive those tourists that arrive looking for adventure and a close encounter with nature.
The Costa Maya is intertwined with the routes of the Mundo Maya, its natural forests keep the Maya's secrets, you could be the one to discover a hidden ruin, lost in the ages of time, surrounded by a quiet energy of its own, a mysterious silence disrupted only by the birds calling out to each other, or an occasional monkey screaming out its annoyance for disrupting his peace. Not far from this hidden paradise on Earth is the beautiful lagoon of 7 colors in Bacalar, famous for being witness to fights among pirates, Spaniards, and Mayans centuries ago. The Bacalar Lagoon is a body of fresh water, whose breathtaking seven colors and sandy bottom are a stunning replica of the Caribbean Sea.
A central part of this place's beauty is Banco Chinchorro, a natural wonder renown all over the world by diving lovers and those that do sport fishing. This is a coral reef bank with over 65 species of marine flora and more than 262 different varieties of animal life. It is a vast, wonderful water world of unexplored treasures, where hundreds of years of hidden secrets lie yet undiscovered. Spanish ships have lain in the sea floor for centuries, with untold stories of pirates and treasures within their flooded insides. Now, they are home to beautiful, majestic sea creatures, like the eagle ray, which appears to glide the sea water with an effortless and lithe grace.
With the government having major development plans in mind, Costa Maya promises to become the next important tourist destination in the Caribbean. Development in the Costa Maya has just started to bloom, providing the perfect time to buy, RIGHT NOW, when prices are still affordable. This is the right moment to be insightful and think of the future
EUROPEANS INVEST IN PROGRESO
The international company from Spain” Prointec” has announced an investment of $238 million US to construct an international distribution center outside Progreso , near the community of Flamboyanes. The Distribution center will be a “tax free” zone and will coordinate all the shipping of cargo from Central America and México to the USA through the port of Progreso and the new airport.
Located on the highway Progreso-Merida, construction of phase 1 will begín this year.
REAL ESTATE AND RENTAL PRICE INCREASES PREDICTED
We believe that the next 12 months will see a dramatic increase in prices due to
1) the new 8 lane highway Progreso to Merida
2) The new airport
3) Wal-Mart in Progreso ( opening August 2006)
4) Ferry service from Tampa Bay
5) The new Yucatan country club and Jack Nicholas golf club
6) Holiday Inn coming to,Chelem
7) Rumors of a Hilton Hotel in Progreso
8) Ecological designation of our inland lagunas as Bio-reserves by federal and state governments.
As of July 2006 the roads have been constructed and work has started on some of the 2400 luxury homes, an international hotel and a luxury golf club designed by Jack Nicholas. It is scheduled to open in early 2007.
Lots range from 600 square meters to 3,900 and cost from $130. US to $180.US per square meter. Total investment will be about $36 million US.
The average home will cost about $300,000 for the land and another $400,000 for construction.
$100 MILLION US INVESTMENT IN PROGRESO PORT
The state of the Yucatán has just announced an additional $100 million US investment in the port of Progreso to support the new economic strategy which has resulted in :
A new airport for Merida- Progreso, a new 8-lane highway Merida/Progreso, modernization of the Merida ring road , and the announcement of a major international distribution center for Central America.
The funds will be used to dredge the port so that larger ships will be confident of secure docking at Progreso.
NEW AIRPORT RE-CONFIRMED
The State of Yucatan reconfirmed that the state has purchased the land for the new airport and will be going ahead later this year with its plans. This airport will be located between Chelem and Merida.
Over the next 5 years they will be developing this huge complex into a super medical center with 4 hospitals, clinics, a residential neighborhoods, a hotel, shops and even a car dealership.
SPANISH COMPANY WINS CONTRACT TO MANAGE CONTAINER PORT IN PROGRESO.
It has recently been announced that the Spanish company Container Terminals of Barcelona has been awarded the contract to manage the Progreso port container operations.
NEW CONDO COMPLEXES
IN CHELEM
We are advised that a new 18 unit condo –Marabella Towers complex is soon to start in Chelem. . Its is being constructed by Vista Marabella Corp. of Ft. Myers Florida.
LUXURY TOURISM COMES TO THE YUCATÁN
By plane or by ship, luxury tourism is coming to Progreso.
Early this year we had a visit from the Seadream II, the leading luxury-class ship in the world. On-board condos are sold to individuals and corporation at a cost of $2 to 5 million US each. They travel the world year round. Some of the world’s richest people have luxury suites aboard. The founders of Microsoft are condo owners on this floating palace.
Cost for a 7 day cruise starts at $5,000. per person up to $35,000.US per person.
NEW BRIDGE ACROSS YUCALPETEN NARROWS
Update July, 2006
The construction of this new bridge along the coast crossing the narrows at the west side of Progreso is also soon to be underway. The State of Yucatan officially announced that despite a delay in starting, the project has been confirmed and will go ahead.
This will link Progreso with Yucalpeten, Chelem and Chuburna straight along the coast. Governor Patricio made the official announcement early in 2006.
PARIS HILTON??
The rumor is that Hilton Hotels are looking at a malecon location for a new addition to Progreso’s hotel scene. Word has it that even Paris Hilton has interests in Hilton coming here. It appears that her new “flame” has some roots in Merida. Star watchers followed her walkabouts in Merida when she was recently in town.
HOLIDAY INN NEAR CHELEM ?
Unfortunately, unconfirmed, we have been advise that Holiday Inn will be coming to Progreso and area next year. It is to be located in Chelem on the new highway from Chelem to Merida, which is to pass by the new airport. We’ll let you know when we have more to tell.
YUCALPETEN / PROGRESO DEVELOPMENT MEGAPROJECT
A Mega project is underway to develop underused land in the area known as Fondeport located to the west of Progreso. It is part of the larger Progreso Development Project. The Yucalpetén project will include the development of the residential, commercial, industrial, and service sectors and is supported by the State of the Yucatan. The mega project will be carried out in three stages, and beginning in March 2006. Private land is being acquired by the government for the project, including the acquisition of some properties along Calle 80 in Progreso
The First Stage will consist of the construction of a 525-meter long and 17 meter wide bridge, to be built 15 meters above sea level. The bridge will be connected to a new western access corridor (periferico) for Progreso The Periferico will have a capacity of 6-7 thousand vehicles per day. (! ! !)
The Second Stage of the corridor will connect the western entrance to Progreso to the beach area at Yucalpetén.
During the Third Stage, the area known as Fondeport will be dredged and filled for residential and commercial development.
The State has committed to invest $300 millions for the three stages.
ECO CLEANUP IN PROGRESO.
You may have noticed that in the newly proclaimed ecological zone at the entrance to Progreso along the highway to Chixculub that there has been a major cleaning of the laguna on both sides of the road. This initiative is in support of the expansion of this ecological zone and the expected investment of the federal government and the state based on the expected results of a World Bank study referred to in this newsletter.
REAL ESTATE IN PROGRESO AND THE EMERALD COAST
This year we have seen a boom in real estate sales and rentals for next year. YES, everyone is anticipating a real increase in prices, here on the Emerald coast.
Where in the world can you buy beach-front property , or rent a fantastic beach house for under $2, 000US per month?? NOWHERE!
We who live in and visit the Emerald coast are very spoiled. As North Americans prepare to return north, we raise the question-for how long do we really expect that these LOW prices will last?
We are already seeing prices for purchasing and retails increasing for next year.
If you LOVE our area and plan to return, you should consider BUYING or renting on a long-term agreement.
Can a condo on our coast really sell at $565,000US. Some folks think so.
Last season the new disco Coco Bongo opened near the Plaza del Mar Shopping Mall. Construction is now underway for a second immediately beside Condhotel. Condhotel may be known to some readers as the old “My Beach” condominium apartments. The property had become pretty seedy before its sale a few years ago. After the sale it was quickly spruced up and renamed.
We are not sure if the owners of Condhotel are investors in the new disco, but sure hope they enjoy nightlife
Mexico’s Riviera Maya
In the heart of the Yucatán coast, just 30 miles south but a world away from the noisy flash of Cancún, troubadours glide barefoot from table to table along the soft, white sand. They strum their guitars and belt out popular ballads at a beachfront cafe shaded by coconut palms, where both tourists and locals savor ceviches and down Corona beers.
A few steps away, Mayan girls play on the surf and a young man kicks a soccer ball next to a parked bicycle and a small fishing boat named Escape.
The paradisiacal scene unfolds in Playa del Carmen, once a sleepy fishing village and now the capital of the booming Riviera Maya—a 90-mile strip along the Yucatán coast washed by the turquoise waters of the Caribbean Sea. Made up of a string of villages linked by beaches, archaeological sites and ecological parks, the Riviera Maya has become a trendy destination for Europeans, who first discovered it, as well as Americans and Canadians, who are doing so now in greater numbers.
“The little places that make up the Riviera are beautiful and enchanting. It’s growing differently than Cancún,” says León Bedolla, spokesman for the Mexico Tourism Board. “They want to keep it chic, welcoming and minimalist. It’s growing a lot, but it’s a natural paradise.”
The Riviera Maya, so named by promoters of the Mexican state of Quintana Roo in hopes that it will become as famous a destination as its French namesake, runs roughly from the quiet fishing community of Puerto Morelos, just south of Cancún, to Punta Allen, a village of 600 that hosts one of the world’s largest ecological reserves and is located past the walled city of Tulúm and the park and archaeological site of Xel-Há.
Jungle and sea set the stage for a myriad of activities. Besides the traditional scuba diving and snorkeling in famous reefs like those off the island of Cozumel, tourists can visit the Crococún crocodile farm, the Yaax Che Botanical Garden or learn the art of fly-fishing in the saltwater lagoons of Sian Ka’an Biosphere Reserve.
But no place is more enchanting—or fun—than Playa del Carmen. At the Riviera’s geographical heart, Playa del Carmen moves to modern rhythms but keeps its village feel, an ideal spot for honeymooners who roam the streets and beaches hand-in-hand.
Just a block away from the beach is Quinta Avenida, the town’s main boulevard—and the bustling scene that unfolds there is what gives the Riviera Maya its trendy, cosmopolitan atmosphere.
Electrical cables dangle over newly paved streets in terracota-colored stones. Orange flame trees rise behind cafes and shops, remnants of the lush vegetation that once reigned here. Modern art galleries share the limelight with small outposts of traditional Mexican souvenirs, as do chic boutique hotels and modest pensiones, mom-and-pop cafes, Key West-style bars, and elegant restaurants.
At night, it seems as if everyone is out strolling Quinta Avenida, dining at stylishly decorated places like Apasionado, a bar restaurant that features Latin jazz, dancing at mega clubs like Mambo Café, where the Dominican band Carisma rocks the house one night with heated dance numbers that prompt some tourists to shed clothing, Cancún-style.
“Ten years ago, there was only jungle, sand and sea and Playa del Carmen was just a fishing village,” says Martín Ruiz, head of the Riviera Maya Tourism Board. “The only residents were the fishermen and their families.”
Playa del Carmen “is the geographical heart, but it’s also a heart that beats with life,” Ruiz says. “It’s ideal for honeymooners, for couples who want culture as well as fun. Yes, there’s a lot of tequila Don Julio drank here, but it’s a more sophisticated ambiance than the wet T-shirt crowd of Cancún.”
Only nine years into its development, the Riviera Maya houses some 24,000 hotel rooms in an extraordinary mix of options that includes the best hotel chains in the world, all-inclusives, smaller boutique hotels and traditional pensiones, many of them decorated in the colorful palates of the Maya.
“Our value and strength is in the combination of factors,” Ruiz says. “We have the only beaches in Mexico washed by the Caribbean Sea. We have the richness of Mexican folklore and gastronomy, the festive ambiance, and the heritage of the Mayan communities. The proximity of the archaeological sites, coupled with our Caribbean location, is what makes us different from other traditional Caribbean destinations like Dominican Republic or Jamaica.”
Almost all the Spanish chains—Iberostar, Viva—have invested here, as have the Italians and Germans, giving the area an added European flair. It has made, for instance, topless sunbathing, which is supposed to be against the law in Mexico, an accepted practice. But it’s the personalized, romantic hotels—Ikal del Mar, which means Poetry of the Sea in Mayan; Mosquito Blue; El Deseo—that have the most personality.
And then, there are the local characters who add irrepressible charm to the scene. One of the best-known calls himself “Jimmy No Problem,” a jewelry artisan who works with amber stones and silver and has a store on Quinta Avenida. Jimmy never wears shoes. Whether he’s on concrete or sand, he always walks barefoot, giving tips to storekeepers to borrow their shoes to go into fine-dining establishments or discotheques where shoes are required.
But once he’s inside, Jimmy takes off the borrowed shoes. He dines and dances the night away with tourists au naturale.
“It’s no problem. Everyone knows me,” he says. “I’m Jimmy No Problem.”
Perennially tanned and sporting a Mayan shirt, white pants and silver jewelry, he looks quite the bohemian he is. But make no mistake. He is a businessman, and in this bustling paradise, he does well.
Some tourists who visit here like it so much they are buying properties, Mexican tourism officials and locals say. Puerto Morelos’ flair for the bohemian has attracted a colony of artists and writers. Playa del Carmen hosts an Italian community of investors, who have moved here and operate their own pensiones and stylish little hotels.
The demand for more rooms has accelerated in the last three years since American and Canadian tourists fearful of terrorism in Europe have discovered it as a destination beyond Cancún, Puerto Vallarta and Acapulco.
“American and Canadian tourists like to mingle in an atmosphere that isn’t American, but more European in style—only they also want all the modern comforts they’re accustomed to, and we offer that. We’re a Mexican destination on the Caribbean with a global outlook,” Ruiz says. “Our tourists have a higher level of culture and they like to share conversation, to observe the Mayan culture. We are the option to those places that are pure party.”
In years to come, as the popularity of the Riviera Maya increases and growth inevitably follows, the challenge will be to keep the balance between the ecological beauty that makes this more than just a beach destination and the push for expansion.
Mexican officials acknowledge this and say they’re keeping a watch with tight building regulations. Hotels, for example, are not allowed to be more than three stories high.
“Our challenge will be to make the Riviera Maya a lasting success,” Ruiz says, “but also to take care of the social, ecological and economic issues [that arise with the growth]. All of the hotels are distributed in such a way that no place will become pure concrete. The jungle, the beaches and Mayan history are what dominate and we want to keep it that way.”
Can foreigners 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.
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 buyer, 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.
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:
 |
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.
