How to invest in Mexico?
Tips for Foreign Investors
When we find our place in the world, in Tulum or wherever, the excitement is so big but is counterbalanced by the problem that we are foreigners and we do not know what are the issues associated with investing outside our country.
In Chakek, we are foreign investors, we have invested in Cancun and Tulum and therefore we have experienced the path, we have faced problems, we have had doubts and fears to the point of thinking about giving up. Now that we have walked the path, we can help you understand the risks, simplify the points to solve and give you information to support you in your decision.
We summarize it in 3 points:
How to become an owner:
It is a very relevant aspect, because having our legal deed guarantees the investment, the possession and usufruct of the property, its possible sale or even facilitates the future transfer to heirs. There are costs and tax aspects that we must take into account when making a purchase decision.
The most relevant aspect if you are a foreigner, is that you must buy by setting up a trust*, and although this may seem complicated, in the end it is one of the simplest aspects due to the fact that there are banking entities that are dedicated to these issues. To create a trust you must consider a one-time cost of usd 800, and an annual maintenance cost of usd 450, which, within the total of the investment, is a minor cost. This point may also have some benefits to manage your assets abroad, or facilitate the transfer of the property to heirs.
Fideicomiso*: trust / escrow
Movements of funds:
We will have here 2 scenarios, the first one related to the purchase transaction, (either in one payment or with a payment plan), where we must complete the source of funds forms. Like in all GAFI member countries we must comply with the regulations and then the purchase/sale transaction is reduced to a transfer from the source account to the seller's bank account. These aspects are regulated by the Mexican Law LFPIORPI, summarizing the point, for the purchase the affidavits* corresponding to real estate purchases must be made, but it is something simple considering that the Resolution 84/23 of the Financial Intelligence Unit (UIF), becomes demanding for operations of more than 7.5 Million dollars, which is not the case of Chakek. (Individuals or legal entities that acquire a property whose value is equal or greater than $MX 136,500,000).
The second aspect to consider is the one related to the local operations to pay expenses, taxes, services, rent collection, etc. Here the recommendation is to open a bank account in Mexico for transactions in Mexican pesos and it is very easy to do it with the same bank that constituted the trust. With the documentation of the property, we can also invite family and friends to stay and spend some time in our home.
*Affidavits: declaración jurada
Migrations and VISAS:
This is a very broad aspect and will obviously depend on the particular situation of each person.
In the case that the property is intended as a vacation home, the recommendation is to enter Mexico as a tourist, presenting documentation of economic solvency and the property in Mexico for accommodation. The entry as a tourist does not require a Visa and has a maximum of 6 months, and that is more than enough when the property is destined to spend a few weeks or months a year on vacation.
When the destination is the permanent residence, the point is more complex, it depends on the situation of the person and the country of origin, we recommend in this case to start the process with an appointment at the Mexican Consulate of the country of origin. We recommend to evaluate the alternatives at:
Recommended option: What can I do to work in Mexico? (FAQ #12).