Mexico has become an attractive destination for foreign investors, especially in tourist areas such as Cancun, Playa del Carmen, Mérida and Los Cabos, due to its climate, culture and high return opportunities in vacation rentals.
1. Benefits of Investing in Mexico
Mexico is attractive to foreign investors due to its relative economic stability, low interest rates, and profitability in the tourism sector. Destinations like Riviera Maya and Los Cabos offer high returns for vacation rentals.
Investment Reasons:
- Rental profitability in tourist destinations.
- Growth in land value in certain urban and rural areas.
- Tax advantages for some investors.
2. Legal Options and Restrictions for Foreigners
- Bank Trust: In the restricted zone (50 km from the coast and 100 km from the border), foreigners must acquire properties through bank trusts, which grant rights of use, but not ownership.
- Incorporation of Companies: Alternative to acquire properties without trust, applicable for foreign companies in non-restricted areas.
3. Tax and Profitability Considerations
- ISR and VAT: Rental income in Mexico is subject to taxes. It is important to review the tax agreements between Mexico and the country of origin to avoid double taxation.
- Maintenance Costs: For rental properties, calculate maintenance and administration costs.
4. Types of Investment Properties
- Residential in Tourist Areas: Areas with high demand for rentals, ideal for vacation rentals and Airbnb.
- Commercial: Investments in growing business areas that can generate recurring income.
Documents Necessary for Foreigners When Buying Properties:
- Bank Trust (for restricted areas): Contract with a Mexican financial institution that allows the foreigner to acquire rights over the property within the restricted area.
- Permit from the Ministry of Foreign Affairs (SRE): Mandatory for foreigners who acquire properties outside the restricted areas.
- Valid Passport: Proof of identity.
- RFC (Federal Taxpayer Registry): Necessary for the payment of property taxes or rental income.
- Proof of Address Abroad: Required for banking and legal procedures in Mexico.
- Appraisal and Certificate of Freedom from Encumbrance: They guarantee the value of the property and its legal status.
Create a Trust
- Objective: Provide a step-by-step plan for foreign buyers to understand and complete the escrow process.
- Structure:
- Necessary Documents: Passport, proof of foreign address, proof of income (if applicable).
- Selection of Financial Institution: Criteria for choosing the bank for the trust.
- Estimated Trust Costs: Includes opening, annual and other bank fees.
- Approval Steps by the SRE: Details of necessary procedures and permits.
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