What Is a Fideicomiso?
A fideicomiso is a Mexican bank trust that allows foreign buyers to own real estate within the country's coastal Restricted Zone. In Los Cabos, it is the standard ownership vehicle for nearly every international buyer. The trust gives you full beneficial ownership while a Mexican bank holds legal title purely as an administrative trustee. This guide explains how it works, what it costs, and how to set one up.
Why the Fideicomiso Exists
Mexican law restricts direct foreign ownership of land within 50 kilometers of the coast. All of Los Cabos sits inside that band. Rather than excluding foreign investment, the government created the fideicomiso so non-citizens could own coastal property with full legal protection.
How the Trust Is Structured
The Three Parties
- The trustee: a Mexican bank that holds legal title.
- The beneficiary: you, the buyer, holding all ownership rights.
- Substitute beneficiaries: the heirs you name to receive the property.
What You Can Do With the Property
As beneficiary you can live in the home, rent it, renovate it, sell it, or pass it to your heirs. The bank cannot interfere with any of these decisions and has no financial claim on the property.
Fideicomiso Costs in Los Cabos
| Item | Typical Cost (USD) | Frequency |
|---|---|---|
| Trust permit / setup | $1,000 – $2,000 | One-time |
| Annual trustee fee | $500 – $800 | Yearly |
| Trust term | 50 years | Renewable |
How to Set Up a Fideicomiso
- Sign the purchase agreement and place funds in escrow.
- The bank applies for the trust permit from the Ministry of Foreign Affairs.
- A notary public completes the title search and prepares the deed.
- At closing, the trust is established and recorded in the public registry.
Renewing or Transferring the Trust
The 50-year term can be renewed indefinitely, and the renewal is a straightforward administrative step. When you sell, the trust is either transferred to the new owner or cancelled and replaced with a new one in their name.
Fideicomiso vs. Mexican Corporation
For a personal residence or second home, the fideicomiso is simpler and less expensive. A Mexican corporation makes sense mainly for commercial property or a portfolio of income-generating units, where the additional accounting obligations are justified.
Frequently Asked Questions
Is a fideicomiso the same as renting?
No. A fideicomiso grants full ownership rights — you can sell, rent, renovate, and inherit the property. The bank only holds legal title as a trustee and has no ownership claim.
What happens to the fideicomiso when I die?
The property passes directly to the substitute beneficiaries named in the trust, avoiding Mexican probate. This is one of the fideicomiso's biggest practical advantages for estate planning.
Can I get a mortgage on a fideicomiso property?
Yes. Several Mexican banks and cross-border lenders offer financing on fideicomiso-held property, though many foreign buyers in Los Cabos purchase with cash.
Have questions about setting up a fideicomiso for a Los Cabos purchase? Contact Properties in Cabo and a local specialist will walk you through it.