LEGAL MATTERS

What is the legal capacity and immigration status required for foreigners to acquire real estate properties in Mexico?
By Diego Robles García, Elías Morán Giacoman & Paloma Arámburo Muñoz
• Photos by Jesús de Avila • October 2009

The purpose of this essay is to analyze foreigners’ capacity to acquire real estate in Mexico, as well as the necessary immigration status to appear in the corresponding deed.

According to the articles 1 and 33 of our Constitution, foreigners enjoy the same human rights as the Mexicans, what be understood mean that foreigners have full freedom to operate in Mexico, but in particular for acquisition of real estate, their capacity is limited depending on the location of the property intending to buy. In regards to the acquisition of real estate in Mexico by foreigners, Mexico is divided in two zones, the restricted zone and the rest of the country. The first one covers a swathe of territory of 100 kilometers along the borders and 50 kilometers along the seashore. Within the restricted zone, foreigners are banned from direct purchase of real estate, so they can only have the use rights through trusts. In the rest of the country, foreigners do have capacity to acquire real estate, provided they obtain a permission to purchase granted by the Department of Foreign Relations, and conclude a pact called “Calvo Clause”, which consists in an agreement that a foreigner holds with the Mexican State through the said Department, in which he or she shall be deemed a Mexican nationality with regards to real estate acquired, it being further understood that such foreigner agrees not to invoke the protection of his or her government, under penalty of forfeiting the real estate acquired to the Mexican State.  

Before 1990, besides the permission of the Department of Foreign Relations, foreigners required a permit from the Department of Internal Affairs to acquire property located outside the restricted zone. In accordance with article 14 of the General Law of Population, in force until July 17, 1990, permits to acquire real estate granted by the Department of Internal Affairs were given to immigrants, only when their migratory documents proved that they do not have such limitation; to immigrants primarily to buy houses; and to non-immigrants who were interned in Mexico as political refugees or students, but in any case the said Department granted a permit to acquire real estate to non-immigrants who were interned in the country as tourists, transmigrants or visitors. The need for such permission disappeared with the reforms to the General Law of Population of July 17, 1990 and its Regulations of August 31 of that year, which allowed foreigners to acquire property outside the restricted, zone without a permit granted by the Department of Internal Affairs.

Nowadays, in addition to the limitations faced by foreigners who intend to acquire properties in Mexico, because of the location of the property they intend to buy, their capacity is limited by a series of “special prohibitions” or “legal incapacities”. Therefore, they can do in Mexico only those acts expressly authorized by law or Mexican immigration authorities.

Therefore, we can state that foreigners can perform in Mexico only the following activities:
 

1. Activities expressly permitted by law, arising from the category of their immigration status;
   
   
2. Activities expressly authorized in their migratory document, or those specifically authorized by the Department of Internal Affairs; and
   
   
3. Those acts and contracts, that as an exception, the law permits to conclude, regardless the immigration status and without a permission from the Department of Internal Affairs.

The first two mentioned principles result from the interpretation of Articles 34 and 60 of the General Population Law and Articles 139 and 140 of its Regulations.

The third principle, in other words, the faculty to perform or execute acts and contracts established by law, regardless the immigration status and without permission from the Department of the Interior, is provided for in Section II of Chapter VII of the General Rules of Population, which refers to execute "Acts and Contracts”, among which real estate property acquisitions are included.

Therefore we may safely conclude that foreigners have the faculty to acquire real estate property and rights in rem, regardless of their immigration status and without the Department of the Interior permission, but with the restrictions stated in Article 27 of the Constitution, the Foreign Investment Law and other related laws, as ruled by Article 66 of the General Population Act and 147 of its Regulations.

Those articles outline the activities which foreigners may participate in our country with any immigration status. We must point out the inconsistency between those two precepts. The General Population Act article refers only to urban real estate property, while its Regulations include rustic ones. Taking into consideration that the Regulations must not exceed the law that it regulates, the possibility for foreigners to acquire rustic real estate property with any immigration status is uncertain.

The migration status is the legal condition or quality with which the immigration authorities allow the entry or residence of a person in a foreign country, namely: non-immigrant and immigrant, according to purpose to reside or not in Mexico. Temporary residents, who reside legally in Mexico for five years and after achieving other legal requirements, can acquire the status of immigrants and reside permanently in the country.

Migration category as a concept outlines a division of the first two mentioned immigration statuses. In non-immigrants categories (Immigration Categories for Non-Residents), there are 11 migratory categories: tourist, trans-migrant, visitor, minister or religious associate, political refugee, refugee, student, distinguished visitor, local visitor, provisional visitor and correspondent, while in migration categories for immigrants there are 9 categories, namely: revenue, investor, professional positions of trust, scientific, technical, family, and similar artists or athletes.

Finally, the visitor migration categories has 8 "variations" that are business and investment visitors, technical or scientific visitors, visitor revenue, professional visitor, trust visitor, human rights observers, visitors that learn about elections and consultant visitors.

In conclusion, foreigners may acquire real estate property located outside the restricted or prohibited zone with any immigration status, for example, as an immigrant, nonimmigrant or immigrant, and with any of the mentioned categories, even as a tourist or any other, with the exception from trans-migrants expressly stated in the last fraction of Article 66 of the General Law of Population.

Regardless of the faculty of foreigners to acquire real estate property despite of their immigration status as previously mentioned, he or she must appear before the notary public to sign the acquisition public deed, and the notary public shall require the documents that evidence such foreigners right to legally be and remain in the country. General Population Act in its Article 67, outlines that notary publics and commercial brokers are obligated to require foreigners to previously exhibit the documents that evidence such foreigners right to legally enter and remain in the country.

The Rules of the General Population Act, in its Article 149 restates the obligation of notary publics to require the documents that evidence such foreigners right to legally enter and remain in the country, but the foreigners are not required to evidence their lawful stay in the country in the following events: to grant or execute a will, to grant a power of attorney, cross-checking or comparing documents and notarial certifications.

However there is a confusion regarding Article 151 of the Regulations, because it obligates notary publics not only to ask foreigners to evidence their lawful stay in the country, but to evidence their immigration status and category that allows them to execute the act or contract that they intend to, and at the end adds that this obligation will operate only in two cases: to prove that the foreign is not a trans-migrant and in legal proceedings regarding divorce or nullity of marriage.

Said article makes no sense because the foreigners´ immigrant status is evidenced with its immigration form and in the same way Article 66 of the General Population Act prohibits trans-migrants to acquire real estate property, besides notary publics are not involved in legal proceedings regarding divorce or nullity of marriage.

In order to evidence their lawful stay in the country, foreigners must exhibit any type of migration forms "FM", generated by the immigration authorities to give foreigners an option to evidence their lawful stay in the country.  Email to a friend

Robles, Lazo y Gallardo - Law Firm
E-mail: jgallardo@rlg.com.mx

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• Robles, Lazo y Gallardo, S.C. is a Law Firm of specialists in various areas of Law, including Corporate Law, Real Estate, Immigration, Foreign Investment, among others. The Firm is integrated with a group of highly qualified attorneys and has offices in Guadalajara (Privada del Niño No. 676, Fraccionamiento Camino Real, telephone number  33-3121-3010  33-3121-3010 ) and Puerto Vallarta (Carretera a Mismaloya No. 479 interior 107, Edificio Scala. Telephone number  322-223-3218  322-223-3218 ).E-mail: jgallardo@rlg.com.mx

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