What is a Fideicomiso?

When it comes to the traditional process of buying property in Mexico, foreigners have a few legal hoops to jump through before they can buy and own land. 

At Kocomo, we do the heavy lifting for our homeowners, streamlining what could be a frustrating, time-consuming process into an easy exchange that allows you to effortlessly purchase property and start your journey of building amazing memories with your friends and family.

The first way we do this is by eliminating the hassle of securing a fideicomiso, a trust required to own and purchase land in Mexico.

What is it?

Simply put, a fideicomiso is a long-term trust where you have all the rights. Specifically, a fideicomiso is a 50-year renewable and transferable bank trust that gives you the rights to own and occupy, remodel, sell, give away or leave the land and the property on it to your heirs.

Why do I need it?

By constitutional provision, foreigners cannot buy or own land set within 50 kilometers (about 30 miles) of the coast and 200 kilometers (about 125 miles) of the border. A fideicomiso gives foreigners the right to buy and own coastal and borderline property in Mexico. The Foreign Investment Act allows foreigners to act as beneficiaries to a Mexican trust by which the bank is the lawful owner of the property, but for the benefit of the beneficiary in the trust. This means you can have all the rights of the owner, without breaking the law or being at risk of losing the property. This process is completely legal and has been in place in Mexico since 1973. 

Are there any risks attached? Is it a safe form of property ownership?

No. Just as in Canada or the United States, the bank holds the legal title to the property but you have all the rights and privileges of ownership. The trust is managed by a bank in Mexico, meaning the government of Mexico can never take away your property.

Additionally, a fideicomiso allows you to assign heirs as beneficiaries of the trust, ensuring land and property stay in your family forever. While the period of a fideicomiso is 50 years, it is perpetually renewable and transferable. The only other maintenance involved in a fideicomiso is a requirement to pay an annual fee to the bank to maintain the trust.

When I buy a Kocomo home, how are fideicomiso involved?

We make it as easy as possible for you to own your dream home in Mexico by taking care of all the legal logistics that would have traditionally been a barrier to ownership.

This is possible because all Kocomo home-buying transactions occur in the United States, meaning you as the homeowner are acquiring an ownership interest in the United States under United States law. Essentially, you’re purchasing a stake in an LLC, which owns property in Mexico. 

This means you as a Kocomo homeowner don’t have to go through the hassle of working with a lawyer to secure your own fideicomiso.

In fact, that’s why we created our homeownership model — to make it as easy and seamless as possible for you to own your dream home in Mexico. Once you select and purchase shares in your residence of choice, all that’s left to do is to go to our portal, reserve your ideal time, and fly to paradise to begin making memories with the ones you love most.