Fideicomiso in Mexico: How Foreigners Buy in Puerto Escondido

If you are not Mexican and you want to buy in Puerto Escondido, you will almost certainly hold the property through a fideicomiso, a Mexican bank trust. It is a well-established structure, not a workaround. Here is how it works, what it costs, where it stops working, and why it only applies to properties with an escritura.

The short version

• Puerto Escondido is in Mexico's zona restringida (restricted zone): within 50 km of the coast, foreigners cannot hold dominio directo (direct title) to land. This comes from Article 27 of the Mexican Constitution.
• For residential use, the legal route is a fideicomiso: a Mexican bank holds title, and you are the beneficiary with full use and enjoyment rights.
• It only works with a property that has an escritura pública (a registered public deed). Land held under an acta de posesión, communal or ejido land, cannot go into a trust as it stands.
• Putting the property in a Mexican friend's name is not a shortcut. Mexican law penalizes it.

## What the restricted zone is

Article 27 of the Constitution reserves land ownership to Mexicans and Mexican companies. It adds that "in a strip of one hundred kilometers along the borders and fifty along the beaches," foreigners may not, "for any reason," acquire direct title.

The Ley de Inversión Extranjera (Foreign Investment Law, LIE) defines that strip as the zona restringida in its Article 2. The entire Oaxaca coast, including Puerto Escondido, sits inside it. Outside the zone, a foreigner can buy directly after filing an agreement with the Secretaría de Relaciones Exteriores (SRE, Mexico's foreign ministry), under LIE Article 10-A.

How a fideicomiso works

A fideicomiso is a trust agreement signed before a Mexican notario (a notary, who in Mexico is a senior lawyer appointed by the state). It has three parties:

• Fideicomitente: the seller, who contributes the property to the trust.
• Fiduciario: an authorized Mexican bank, which becomes the legal titleholder.
• Fideicomisario: you, the foreign buyer, holding the rights of use and enjoyment.

LIE Article 12 states that those rights include the proceeds of the property, rental income included. To be precise: you do not hold a direct derecho real (property right) in the land, by design. In practice, the bank acts only on your instructions. People often compare it to a US living trust; the comparison helps, but it only goes so far.

The SRE permit

The bank, not you, requests the permit from the SRE, and only through the ministry's electronic system. The request lists the parties and their nationalities, any substitute beneficiaries, the term, the intended use, the property description and its distance from the federal maritime zone.

By law the SRE has five business days to answer; if it does not, the permit is deemed granted (LIE Art. 14). Once issued, the permit is valid for 180 calendar days and can be extended once. The government fee is MXN 21,650 under the SRE's 2026 schedule.

Term and renewal

A fideicomiso lasts up to 50 years and can be extended at the request of the interested party (LIE Art. 13). An extension is a separate filing with the SRE, with its own fee.

What you can do as beneficiary

• Live in it and improve it, as an owner would.
• Rent it out: rental income is part of the use rights the law describes.
• Sell: your rights are transferable, and the bank carries out the sale on your instructions.
• Pass it on: the trust lets you name fideicomisarios sustitutos (substitute beneficiaries) who step in when you die.

Naming substitute beneficiaries is a real advantage for families. It does not replace estate and tax planning in your home country, so run it past your own advisor.

## What it costs

Only some figures are public. What we can state:

• SRE permit fee: MXN 21,650 (2026 schedule).
• Registration with the Registro Nacional de Inversiones Extranjeras (national foreign investment registry): handled by the bank, within 40 business days of setting up the trust (LIE Art. 32).
• Bank fees: a setup fee, then an annual administration fee. There is no official tariff; they vary by bank, region and file.

On top come the usual purchase costs: notary, public registry, local transfer tax and the annual predial (property tax). These vary by notary and municipality. Ask two or three banks and the notary for written quotes before you sign a purchase agreement, and budget in pesos, since several of these items are billed in MXN.

The alternative: a Mexican company

A foreigner can own up to 100% of a Mexican company whose bylaws include the foreigner admission clause. Under that clause, foreign partners agree not to invoke their own government's diplomatic protection over those assets.

Such a company can hold full title in the restricted zone, but only for non-residential use, and must notify the SRE within 60 business days (LIE Art. 10). For residential use, even a Mexican company goes through a fideicomiso.

When does it make sense? When there is a genuine business: a hotel, a rental operation run as a company, a development project. The LIE regulations classify those uses as non-residential. But a company means bookkeeping, tax filings and corporate formalities kept current, otherwise partners can face personal liability. For a vacation home or a place to live, a fideicomiso is usually the simpler tool.

What does not work

Using a Mexican name

Buying in the name of a Mexican friend or partner means giving them the property. Legally they own it, and you hold no registered right. Their death, divorce or debts become your problem.

The law is explicit. LIE Article 38 penalizes simulated transactions designed to let a foreigner use or dispose of property in the restricted zone, with fines up to the amount of the transaction. The president of Mexico's national college of notaries has also noted these arrangements can lead to forfeiture of the property to the nation.

Ejido and communal land

To be an ejidatario (member of an ejido, a form of collective agrarian land) you must be Mexican (Ley Agraria Art. 15). Ejido parcel rights can only be transferred to other ejidatarios or to avecindados (Art. 80), who are also Mexican by definition (Art. 13). Bienes comunales (communal land) cannot be sold, seized or acquired by prescription (Art. 99).

So a foreigner cannot hold this land through a trust, or "through" a private contract.

Why a fideicomiso requires an escritura

A fideicomiso is built on transferring title to the bank. The trust must be executed as an escritura pública before a notario, and the permit requires an exact description of the property: measurements, boundaries, surface. Without registered title, there is nothing to transfer.

That is why the escritura versus posesión distinction drives so much of the Puerto Escondido market. We break it down in our article on escritura vs acta de posesión. An ejido parcel that has obtained dominio pleno (full private title) and registered it falls under ordinary property law (Ley Agraria Art. 82). That process has to be verified case by case, and we never promise that a posesión property can be converted.

One more practical point: each bank sets its own criteria. One of Mexico's largest banks, for instance, describes its restricted-zone product as covering built homes and condos. If you are buying a lot, confirm early which bank will take the file.

To see only compatible properties, use our deeded properties filter.

Timeline and documents

1. Offer and title review: escritura, registry record, no liens.
2. Bank selection and file: passport, seller's documents, details of substitute beneficiaries, of any attorney-in-fact, and of the property.
3. SRE permit: five business days by law; one bank quotes around 12 business days once the file is complete.
4. Signing the escritura before the notario, which incorporates the trust agreement.
5. Registrations with the public registry and the foreign investment registry, by the notary and the bank.

The overall timeline depends on the notary, the bank and how clean the file is, so we do not quote a universal number. You do not need to be in Mexico for most of it. We have closed purchases entirely remotely: video tours, document review, contracts on recognized e-signature platforms, and a power of attorney or electronic signature for the deed depending on the case. The full process is in our guide to buying in Puerto Escondido.

How we coordinate notaries and banks

At Ocean Puerto, the legal status is shown on every listing. We work with independent notaries and lawyers, gather the documents, and keep the bank's and the notary's timelines aligned. The buyer pays us no commission; it is included in the price.

"A fideicomiso is not something you sort out the week before closing," says Antoine Volatier. "I would rather a buyer know at the first showing whether a property can go into a trust, and walk away from the one that can't."

See our legal support service and the buyer's guide for the full framework.

Talk to an advisor

Looking at a specific property and want to know whether it can go into a fideicomiso? Message us or reach us on WhatsApp and an advisor will answer in English.