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Fideicomiso

Article 27 of the Mexican Constitution states that foreigners may have ownership rights to lands in Mexico provided that foreigners agree before the Secretary of Foreign Relations (SRE) to consider themselves as Mexican nationals with respect to such property, and not to invoke the protection of their own government in matters relating to the property under penalty of forfeiting the property if they fail to comply with this provision (this provision is known as the "Calvo Clause").

Furthermore, Article 27 establishes an outright prohibition against foreigners acquiring direct ownership of real estate within 100 kilometers of the national borders or 50 kilometers of the coastline (this zone is now known as the "Restricted Zone"). These constitutional restrictions have been softened by Mexico's foreign investment laws and regulations. If the land is located within the Restricted Zone and is used for residential purposes, foreigners may only acquire the rights to use and enjoy the land through a Fideicomiso (Bank Trust).

For real estate within the Restricted Zone used for non-residential activities (i.e. tourism, real estate development, commercial or industrial purposes), foreigners may acquire the land through a 100% foreign-owned Mexican legal entity (a Mexican corporation or limited liability company) that is authorized to have foreign ownership by the SRE and whose bylaws contain the Calvo Clause.

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