FAQ

a. Can foreigners own property in Mexico?
Decades ago the law did not allow foreigners to own property within 30 miles of the coastal waters or 50 miles of any land border, but the situation has changed dramatically with the New Foreign Investment Law. The Mexican government now permits two ways in which non-Mexicans can safely and legally own coastal property.

One way to own property in Mexico is to create a Mexican Corporation (Sociedad Anónima) completely owned by the non-Mexican investors. The corporation holds title to the property, so the non-Mexicans actually hold title to their property. Such a corporation needs the following:
• be 100% foreign owned
• have a minimum capital requirement of 50,000 Mexican pesos in capital stock
• have a minimum of two shareholders and no maximum (administration may be entrusted to the Board of Directors)
• have no limit to the life of a corporation
• have free transferability of stock ownership
• have limited liability to shareholders.

The Process of establishing a corporation requires the following elements:
• name of a Mexican company
• capital structure of the Mexican company
• names of the partners or stockholders
• form of management and names of administrators and representatives of the corporation
• name of the auditor of the Mexican company

The second way to own property in Mexico is through a bank trust (fideicomiso) whereby a Mexican bank holds title to the property in a trust with the non-Mexican as the beneficiary of the trust.

The trust is set up as 50-year renewable lease without limitations. Just like in other countries, in Mexico the owner is the beneficiary of the trust, administers the trust and therefore controls the property. He or she may transfer ownership, lease or improve the property at will. Foreign owners may also enjoy capital gains on sold property and can also instruct the trust to pass on the property to future generations without the cost of inheritance tax.

The trust is the most frequent option to own property in Mexico by American and Canadians.

For both options, it is highly recomended to use help of a real estate firm and of Mexican licensed attorney.

At La Papaya we have a lot experience in selling properties to foreigners, more than 60% or our buyers are from America, Canada and Europe, and we can give you all the support and information related to trusts, and buying in Mexico.

b. Can I rent my property while I’m not using it?
Yes. Playa del Carmen is one of the hottest destination of the new millennium making it very attractive for vacation rentals. There are a number of rental organizations that contribute to a high occupancy rate. Property rental is an excellent way to quickly recover your initial investment.

Furthermore, Playa del Carmen has very high demand and you can have two options for rental: Vacational Rental and Long Term Rental.

In Vacational Rental you can rent your property for short term when you are not going to use it. The period could be very flexible: 1 week, 1 month, 6 months. You can hire a specialized company to administrate and promote your apartment for Vacational Rental, or you can promote your apartment by yourself and ask for “Property Management” support, that we can offer you at La Papaya.

In relation with the Long Term Rental, you can rent your apartment for long periods: 6 months, 1 or 2 years, etc; and you can guarantee regular income for yourself.

If you want more information on Vacational Rental and Long Term Rental, you can contact us.

c. What kind of financing is available in a real estate purchase?
Presently there are some American and Canadian institutions providing financing to Americans and Canadians in order to purchase houses or condominiums that are already built. Most transactions are cash with the buyer making arrangements back home.

At La Papaya we have some experience on financing for American and Canadians with GE Money and Scotiabank. We will happily provide you with more information.

d. How can I provide maintenance to the property and cover the expenses if I don’t live in Mexico?
There are two different options for maintenance and payment of the expenses.

The “Maintenance of Common Areas” and the “Property Management”.

The difference between “Maintenance of Common Areas” and “Property Management” is that, one the one hand, all the owners of apartments are committed to pay an establish maintenance fee to cover all the expenses of the common areas such as the swimming pool, the lobby, the garden, the garage, etc. Otherwise, the Property Management, is related with the administration of the private areas and is optional.

At La Papaya we provide an on site administrator who takes care of the property. A monthly “maintenance fee” is paid by each unit to cover a regular maintenance of the common areas, the cleaning of the building, the payment of the concierge and cleaning staff, the insurance of the common areas of the building, the regular cleaning and treatment of the swimming pool, and the gardening, among other issues.

At La Papaya we charge the lowest maintenance fee of the local market, if you want more information on this issue you can contact us.

In relation with “Property Management”, at La Papaya we can take care of your property if you live abroad. We offer a “Property Management” scheme that include a regular cleaning of your apartment, the payment of your bills, preventive maintenance of your equipment, and minor repairs, and a periodical information of your “client account”, so your property will be always in excellent conditions. If you want more information of our “Property Management” scheme, please contact us.

e. Can I bring my own furniture and appliances from a foreign country to Mexico?
Yes. You can ship furniture and appliances to the property. However, accurate paperwork is required. You can also find in Cancun and Playa del Carmen a good variety of just about everything you need. Stores such as WalMart, Costco, Liverpool, Sears, Office Max, Office Depot, Home Mart, Sam’s Club, City Club as well as state-of-the-art furniture stores are all available in the area.

At La Papaya we have some discounts up to 15% in the best stores of Playa del Carmen and we can transfer this discount to our clients. Also we can put in contact with the best interior designers to help you to furnish your second home.

f. Can I import my vehicle from a foreign country?
Yes. According to the law, the maximum time you can import your car is 6 months. Recent legislation states that you do not have to leave the country and renew your vehicles papers as long as you have a valid tourist or FM3 visa.

In any case, a trip to the southern border at Chetumal is only 2.5 hours from Tulum. In Chetumal you can renew your importation certificate. On the way there are some interesting places to visit. You can either drive your car into Mexico, or have your vehicle shipped from Tampa to Puerto Morelos.

g. How complicated is it to retire in Mexico?
The Riviera Maya is becoming ideal for retired people. There is a growing International community attracted by the beauty of the area, the warm winters and stress free lifestyle. Cancun airport provides daily direct flights to the major cities of the United States, Canada and Europe.

You may obtain your immigration status as a retiree in a matter of a few days. We recommend using a lawyer to facilitate the process.

There is an “International Retirement Index” that measured the quality of life and the cost of retirement all over the world, and Mexico during 2008 and 2009 obtained the highest rate for retirement, due to the sum of different issues such as: cost of living, climate, infrastructure, cultural aspects, real estate etc. If you want more information you can access the web page of the “International Retirement Index” in order to compare the advantages that Mexico offer for retirement.

h. How complicated is to move and work in Mexico?
It is not complicated. You can either work for a corporation or open your own corporation. If you are working for someone else you will need a letter where they are offering you the job, explaining your position in the organization and the salary you will receive.

If you are opening a Mexican Corporation you can get your immigration papers as the administrator of your company and you will need a notary and reliable accountant firm.

We recommend using a lawyer to facilitate the process.