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Non-Mexicans are capable of purchasing property in Mexico with worry about its legality. There are restricted zones, which include 50 km (31 miles) from waterfronts/shorelines and also 100 km (62 miles) from international borders. You can own property by the water or within that distance to the border, however, if you do so under a bank trust or Mexican corporation entity.
What is the difference between a bank trust and a Mexican corporation entity?
This often leads people to believe that they have two perfectly equal avenues when searching for a way to own property within those restricted areas. In reality, there are some important differences in choosing between them.
Going with a bank trust gives you more control over how many people can own the property and who you can bequeath it to when something happens. It offers control over the property’s ownership as effortlessly as possible. However, this is intended for personal use only, with no corporate or business use at all.
If you are going to be using your Mexican property for any kind of business/income use, however, you will need to own the property through a Mexican corporation or company instead of through a bank trust. This helps it become registered properly and also will adjust the expectations of the owner, too.
How to distinguish personal from business use
The reason that this separation is here is to make sure that it’s zoned and taxed properly, and also to make sure that both sides know what their responsibilities are. Sorting out which way you want to use it is going to be important.
For example, personal use would be to enjoy it as a vacation home, a spot where you work from home (ex: remote work), and live with loved ones during your time there. As you can see, you can still work from home, but it would need to be remote work. The reason that remote earning is personal is that the location itself doesn’t matter. Essentially, you could work as easily from a train station or a beach and it would make no difference. However, this means that you can’t claim any kind of “business use of home” expenses, either.
If you are looking to use your Mexican property for any kind of income that involves that property, this is where the Mexican corporation would need to be your choice. For example, if you wanted to offer your services to local customers, or sell products to local clientelle. Even logistics businesses where it’s just shipping and receiving things. All of these would be business use.
Can I purchase property within the restricted zone under a Mexican corporation entity?
Yes, it is easy to own land this way. This is standard procedure in Mexico and it’s legal, safe, and designed for people to navigate through easily. While there will be a bit of extra paperwork to fill out, simply because it is registering you as using the property for business purposes (which have unique conditions and procedures), it is still easy and simple enough to do.
