Acquisition of real state share
The real property regime in Mexico sets forth that the following shall be considered to acquire ownership of a real property on national territory:
- The location of the real property and its intended purpose (residential or non-residential activities), as well as the nature and nationality of the individual or entity acquiring the property.
Regarding the location of the real property, article 27, fraction I of the Political Constitution of the United Mexican States defines restricted zones of the national territory as follows:
Restricted Zone: The strip of land covering 100 kilometers along the borders and 50 kilometers along the coasts.
Real property acquisition schemes will depend on whether the acquiring individual or entity is:
- A Mexican legal entity with foreigner admission clause.
- A foreign individual or legal entity.
- The intended use of the real property (for residential or non-residential activities).
The Foreigner exclusion clause is an express agreement or covenant that forms integral part of a company’s corporate bylaws, establishing that the former must not allow the direct or indirect participation of foreign investors or partnerships with a foreigner admission clause as partners or shareholders.
Pursuant to article 5 of the Regulation of LIE (Foreign Investment Law) and RNIE (National Registry of Foreign Investment), for the purposes of the provisions of Title Two of LIE, a real property with residential purposes is one exclusively intended for housing use by its owner or by third parties. On the other hand, real properties intended for the execution of non-residential activities include but are not limited to the following:
- Those used as time-share.
- Those used for an industrial, commercial or tourism activity, and simultaneously used for residential purposes as well.
- Those acquired by credit institutions, financial intermediaries and auxiliary credit organizations for the recovery of debts in their favor arising out of transactions related to their purpose.
- Those used by legal entities for the fulfillment of their corporate purpose, consisting in sales, urbanization, construction, housing complex projects and other activities related to real estate project development, up to the time of their transfer or sale to third parties.
- In general terms, real properties intended for commercial, industrial, agricultural, cattle-raising, fishing and forestry-related activities as well as for the rendering of services.
