How to Deal in Mexican Real Estate as a Foreigner Through an SA DE CV or as an Individual
Foreigners can own property in Mexico through an SA DE CV, which is a type of Mexican corporation. To form an SA DE CV, a foreigner will need to file paperwork with the Mexican government and obtain a taxpayer ID number. They will also need to appoint a Mexican resident as the director of the corporation.
Foreigners can also deal in Mexican real estate as individuals. To do this, they will need to obtain a Mexican taxpayer ID number and a "Cláusula Calvo" agreement. The Cláusula Calvo agreement is a document that states that the foreigner agrees to submit to Mexican law in the event of any dispute.
In addition to obtaining a Mexican taxpayer ID number and a Cláusula Calvo agreement, foreigners who want to deal in Mexican real estate as individuals will also need to obtain an FM3 permit from the SRE (Secretaría de Relaciones Exteriores). The FM3 permit is a temporary resident visa that allows foreigners to live and work in Mexico for up to one year. To obtain an FM3 permit, foreigners will need to provide documentation proving their identity, nationality, and financial solvency. They will also need to provide a letter from a Mexican landlord stating that they have rented or purchased property in Mexico.
Here are some of the advantages of dealing in Mexican real estate through an SA DE CV:
- The SA DE CV will have its own taxpayer ID number, making it easier to open bank accounts and conduct other financial transactions.
- The SA DE CV will have its own legal entity, which can protect the foreigner's personal assets in the event of a lawsuit.
- The SA DE CV can be used to own property in restricted zones, which are areas within 50 kilometers of the coastline and 100 kilometers of the border.
Here are some of the advantages of dealing in Mexican real estate as an individual:
- The foreigner does not need to appoint a Mexican resident as the director of the corporation.
- The foreigner does not need to file as many paperwork with the Mexican government.
- The foreigner does not need to obtain a Cláusula Calvo agreement.
- The foreigner does not need to obtain an FM3 permit.
However, there are also some disadvantages to dealing in Mexican real estate as an individual:
- The foreigner's personal assets are not protected in the event of a lawsuit.
- The foreigner cannot own property in restricted zones.
- The foreigner must obtain an FM3 permit, which can be a lengthy and complicated process.
Ultimately, the best way for a foreigner to deal in Mexican real estate depends on their circumstances and goals. If the foreigner is planning to own property in restricted zones or wants to protect their personal assets, then forming an SA DE CV may be the best option. However, if the foreigner is only planning to own property in non-restricted zones and is not concerned about protecting their personal assets, then dealing in real estate as an individual may be a more straightforward option.
Here are some additional tips for foreigners who want to deal in real estate in Mexico:
Do your research. Before you start looking at properties, it is important to do your research and understand the Mexican real estate market. This includes understanding the different types of properties available, the different areas of Mexico, and the legal requirements for foreigners to purchase property.
Get a good real estate agent. A good real estate agent can help you find the right property and navigate the buying process. Make sure to choose an agent who is experienced in working with foreigners.
Be aware of the risks. There are some risks associated with investing in real estate in Mexico. These risks include political instability, economic volatility, and natural disasters.
Hire a lawyer. It is always a good idea to hire a lawyer to review real estate contracts before signing them. This will help to protect your interests and ensure that you understand all of the terms of the transaction.
Dealing in real estate in Mexico can be a complex process, but it can also be a rewarding experience. By following these tips, you can increase your chances of having a successful transaction.