Another option for foreigners buying real estate is to use a Mexican corporation. This corporation must be formed with at least two shareholders, and it can have 100% foreign ownership. Through this approach, you can avoid the need for a fideicomiso, as the property would be purchased by a Mexican corporation. The acquisition would occur through a standard purchase and sale process, just like any Mexican citizen would follow.

This option is particularly beneficial if you intend to generate rental income from the property, have no plans to acquire Mexican nationality in the future, or if you are considering subdividing and developing the land.

However, forming a corporation in Mexico will involve additional responsibilities. These include obtaining a federal taxpayer registry and acquiring residency status, unless you intend to handle everything through proxies. Additionally, all payments must be supported by bank wire transfers or checks to ensure fiscal compliance. Annual and monthly tax returns need to be filed, and you will be responsible for paying your accountant’s fees, which can sometimes be expensive. Using a corporation can also result in higher capital gains taxes, with greater challenges in reducing the tax burden, among other potential issues.

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