How Foreign Buyers Can Legally Own Property in Puerto Vallarta

Puerto Vallarta is located within Mexico’s coastal area, which falls under what the Mexican Constitution defines as the Restricted Zone. Under the 1917 Constitution, foreigners cannot hold direct title to residential property within 50 km (31 miles) of the coastline or 100 km (62 miles) from international borders. This area was once called the Prohibited Zone, but modern legislation has made foreign ownership fully possible through secure legal structures.

The Solution: The Fideicomiso (Bank Trust)

To allow foreign investment while respecting constitutional law, Mexico created the Fideicomiso, a bank trust that provides foreigners with full ownership rights in practice.

Here’s how it works:

• A Mexican bank holds legal title to the property as the trustee.

• The foreign buyer is the beneficiary of the trust.

• The bank acts only on the instructions of the beneficiary.

• The trust exists exclusively for the benefit of the foreign owner.

What Rights Does the Beneficiary Have?

As a beneficiary, you can:

• Live in the property

• Rent it (short or long term)

• Remodel or develop it

• Sell it at any time

• Use it as collateral for a loan

• Pass it on to heirs through a will or inheritance

In every practical sense, the beneficiary is the true owner of the property.

Who Can Be a Beneficiary?

• A foreign individual

• A foreign legal entity (such as a corporation)

Corporate Ownership Option

The Foreign Investment Law of 1993 expanded ownership options even further. It allows foreigners to own non-residential property in the Restricted Zone through a Mexican corporation, which can be 100% foreign-owned. Since the corporation is legally Mexican, it can hold direct title to the land. This structure is commonly used for:

• Commercial properties

• Development projects

• Properties intended for resale to foreign buyers

In Summary

Mexico offers clear, legal, and well-established pathways for foreigners to invest in real estate — especially in desirable coastal markets like Puerto Vallarta. With the right guidance, the process is secure, transparent, and investor-friendly.