A key historical overview for foreign investors
The history of foreign investment in real estate in Mexico is marked by constitutional and legislative changes that have defined, restricted, and later enabled access to strategic areas of the country. Below, we explain how this legal framework has evolved and why today it is possible to invest safely, even in the Riviera Maya.
History of Foreign Investment in Real Estate in Mexico: From 1917 to the Present
Before 1917: Total (and Risky) Openness
During the Porfiriato (1876–1911), the Mexican government actively promoted foreign investment. Large tracts of land were granted to companies and individuals from the United States, Europe, and Canada.
- Foreign companies controlled mines, railroads, ports, and agricultural areas.
- Residential and commercial properties were acquired by foreigners with few restrictions.
This model led to land concentration, inequality, and social conflicts that eventually sparked the Mexican Revolution.
1917: The Constitution Protects Territorial Sovereignty
The 1917 Constitution established in its Article 27: Artículo 27:
- The Mexican State is the original owner of all land and water.
- The “restricted zone” is defined: 100 km from borders and 50 km from coastlines.
- Foreigners cannot directly acquire property within this zone.
Consult the official text of Article 27: Political Constitution of the United Mexican States View Document
1973: Formal Regulation of Foreign Investment
The Law to Promote Mexican Investment and Regulate Foreign Investment was enacted:
- The prohibition in the restricted zone was reaffirmed.
- Investment outside this zone was allowed with government authorization.
See analysis: Source: SciELO
1993: Modern Legal Solutions Are Created
The Foreign Investment Law introduced two legal frameworks:
- Bank Trust (Fideicomiso): the bank holds the property title, while the foreigner is the beneficiary with full rights. For more information, see our article on fideicomisos here. aquí.
- Mexican Company:for commercial purposes, it is allowed to acquire property through a legally established company.
Consult the current law: Foreign Investment Law
Chronological Summary
- Before 1917:Free but unregulated investment.
- Since 1917: Foreign ownership is prohibited in strategic zones.
- 1973: Foreign investment is regulated and limited.
- Since 1993: Investment is allowed in any area through a bank trust or a Mexican company.
Frequently Asked Questions (FAQ)
What is the restricted zone in Mexico?
It is a strip of land 100 km from the borders and 50 km from the coastlines where foreigners cannot directly hold property titles. Legal mechanisms exist to invest in these areas.
Can a foreigner invest in the Riviera Maya?
Yes, as long as they use a bank trust or establish a Mexican company.
What is a bank trust (fideicomiso)?
It is an agreement where a Mexican bank holds the legal title, and the foreign buyer is the beneficiary with full rights over the property.
Why hasn’t the Constitution been amended?
Because current mechanisms (trusts and Mexican companies) allow legal investment without the need for reform.
Can one invest outside the restricted zone?
Yes, even before 1993, with authorization from the Ministry of Foreign Affairs (SRE).
Which option is better: bank trust or Mexican company?
It depends on the use: if it is residential or for vacation purposes, a bank trust; if it is commercial or institutional investment, a Mexican company. Consult our comparative article.
Are you ready to invest in the Riviera Maya? At L’agence by Los Socios we guide you every step of the way. Contact Us for personalized consultation.
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