What is a Fideicomiso
The fideicomiso is a legal constrict similar to a trust to which which a person gives ownership of certain assets for it to administer. The fideicomiso, sometimes referred to as a bankers trust, is most commonly used to hold real estate in Mexico. Such a fideicomiso is a real estate trust that is held under your name in a Mexican bank (Scotia Bank, HSBC [the world’s largest bank] Banamex {citigroup}, Santander [the largest bank in Spain], etc). The bank acts as the fiduciary, you and your heirs and assigns are the beneficiaries of the fideicomiso.
As the beneficiary of the fideicomiso you absolutely and irrevocably maintain control of the property, use, maintenance, control over all property decisions. The fideicomiso is not a lease, it is equivalent to a fiduciary in the US.
The fideicomiso gives the beneficiary absolute control of the property. So you can enjoy it, lease it, improve it, mortgage, sell, inherit, give away. Basically, your property is under a fiduciary of which you are the owner to be managed by a bank in Mexico on your behalf.
The purpose of a fideicomiso is to authorize foreigners the power to buy real estate in Mexico within the “restricted” zone and ensure a secure transaction. The “restricted” zone is land 31 miles (50 km) from the coast and 62 miles (100 km) from the border. When the Mexican Constitution was written it was designed to protect this land and prevent the great loss of land that had occurred throughout its history.
In order not to amend the Mexican constitution, they created and added the fideicomiso to promote high demand international investments, especially on the coast. Residential properties outside the restricted zone can be acquired directly by foreigners without a fiduciary, however, some buyers decide to obtain it.
Your fiduciary is not owned by the bank; they are simply administrators. You and your kin are the beneficiaries. The fideicomiso of your Mexican property is granted to you, the beneficiary and is not considered as property of the bank. In this way your property is not exposed to legal problems in which the bank can be found. You are the beneficiary of the fiduciary.
Americans usually worry that their property may be taken over by the Mexican government. Under the North American Free Trade Agreement (NAFTA), Mexico can not, directly or indirectly, expropriate. The only exception is when the government needs the land for public works (example: road construction).