What is a Restricted Zone?
Restricted Zone (Zona Restringida)
Zona Restringida: /SOH-nah reh-streen-HEE-dah/
Quick Definition: A restricted zone (zona restringida) is an area in Mexico where foreign nationals cannot own property directly and must use a fideicomiso (bank trust) for legal ownership. These zones include areas within 100 kilometers of international borders and 50 kilometers of coastlines, established by Mexico's Constitution to protect national sovereignty over strategic territories.
Where Special Ownership Rules Apply
Restricted zones represent Mexico's constitutional approach to balancing foreign investment opportunities with national security and sovereignty concerns. These geographic limitations, established in Article 27 of the Mexican Constitution, reflect historical experiences with foreign land ownership and the desire to maintain Mexican control over strategically important coastal and border areas. The restrictions don't prohibit foreign ownership but require it to be structured through fideicomiso bank trusts that provide legal protections while ensuring Mexican institutional oversight.
Understanding restricted zones is crucial for international buyers because it determines the legal structure required for property ownership and affects transaction complexity, costs, and ongoing obligations. While these zones include some of Mexico's most desirable resort and coastal areas, they also involve additional legal requirements that buyers must understand before making purchase decisions.
Why Understanding Restricted Zones Matters for Bajío Buyers
For international buyers considering Mexico's Bajío region, understanding restricted zones helps appreciate the advantages of direct ownership available in non-restricted areas. While most Bajío properties allow fee simple ownership, buyers often explore coastal properties or may encounter developments using trust structures for other reasons.
Geographic Boundaries of Restricted Zones
Restricted Zone Map and Coverage
Mexico's restricted zones cover significant portions of the country's most desirable real estate areas:
Popular Tourist Destinations in Restricted Zones:
- Pacific Coast: Puerto Vallarta, Mazatlán, Acapulco, Cabo San Lucas, Sayulita
- Caribbean Coast: Cancún, Playa del Carmen, Tulum, Cozumel, Isla Mujeres
- Gulf Coast: Veracruz, Tampico, Campeche coastal areas
- Northern Border: Tijuana, Mexicali, Ciudad Juárez, Nuevo Laredo, Matamoros
- Southern Border: Tapachula, Chetumal, border communities with Guatemala and Belize
Bajío Region Benefits:
- San Miguel de Allende: 280+ km from nearest coast, direct ownership available
- Querétaro: 350+ km from coast, fee simple ownership for foreigners
- Guanajuato: 250+ km from coast, direct property ownership permitted
- León: 300+ km from coast, no fideicomiso requirements
- Celaya: 400+ km from coast, straightforward ownership process
Measuring from Restricted Zones:
Official measurements are taken from the high tide line on coasts and international boundary markers on borders, calculated using straight-line distances rather than travel routes. Properties near zone boundaries require professional verification to confirm their status.
Legal Requirements in Restricted Zones
Foreign ownership in restricted zones requires specific legal structures and ongoing obligations:
Bank Trust Structure:
- Mexican Bank Trustee: Authorized Mexican bank holds legal title to the property
- Foreign Beneficiary: International buyer receives all beneficial ownership rights
- Trust Duration: Initial 50-year term, renewable for additional 50-year periods
- Annual Fees: $500-800 USD paid annually to the trustee bank
- Legal Rights: Full ownership rights including sale, rental, inheritance, and modification
- Government Oversight: Regulated by Mexican banking and foreign investment authorities
Restricted Zone Purchase Steps:
- Bank Selection: Choose authorized Mexican bank to serve as trustee
- Trust Application: Submit required documentation and establish fideicomiso
- Due Diligence: Complete standard property investigation and title verification
- Government Permits: Obtain required foreign investment authorizations
- Property Transfer: Complete purchase with bank holding title in trust
- Annual Maintenance: Pay ongoing fees and comply with reporting requirements
Fideicomiso Responsibilities:
- Annual trust fees paid to the Mexican bank trustee
- Compliance with foreign investment reporting requirements
- Trust renewal procedures before expiration dates
- Proper documentation for any property transfers or modifications
- Communication with bank trustee for routine property matters
Benefits and Limitations of Fideicomiso Ownership
Understanding fideicomiso advantages and restrictions helps buyers make informed decisions:
Advantages of Trust Ownership:
Restrictions and Considerations:
Restricted Zones vs. Non-Restricted Areas
Comparing ownership options helps buyers understand their choices:
Restricted Zone Ownership:
- Fideicomiso bank trust required for foreign ownership
- Annual fees of $500-800 USD for trust administration
- 50-year renewable terms with renewal procedures
- Bank involvement in major property transactions
- More complex documentation and legal processes
- Government oversight of foreign investment activity
Non-Restricted Area Ownership (Bajío Region):
- Direct fee simple ownership available for foreigners
- No annual trust fees or bank trustee requirements
- Indefinite ownership terms with no renewal needed
- Direct owner control over all property decisions
- Simpler documentation and transaction processes
- Standard property ownership similar to home countries
Choosing Between Areas:
- Coastal Access: Restricted zones include prime beach and waterfront properties
- Cost Structure: Non-restricted areas avoid ongoing fideicomiso fees
- Transaction Simplicity: Direct ownership offers straightforward legal processes
- Investment Goals: Consider total cost of ownership including ongoing fees
- Lifestyle Preferences: Beach vs. inland living based on personal priorities
Planning for Multi-Property Ownership
Many international buyers consider properties in both restricted and non-restricted areas:
Multi-Location Investment:
- Primary Residence: Often in non-restricted areas for direct ownership simplicity
- Vacation Properties: May include restricted zone coastal properties for beach access
- Investment Properties: Diversification across different markets and ownership structures
- Cost Management: Balancing fideicomiso fees with investment returns
- Legal Complexity: Managing different ownership structures and requirements
Expert Guidance for Multiple Properties:
- Experienced attorneys familiar with both ownership structures
- Tax advisors understanding implications of different property types
- Property managers capable of handling various ownership requirements
- Financial planners incorporating ongoing costs and obligations
- Insurance specialists providing coverage for different ownership structures
Evaluating Property Locations:
- Lifestyle Goals: Beach access vs. inland living preferences
- Financial Analysis: Total cost of ownership including ongoing fees
- Legal Complexity: Comfort level with different ownership structures
- Investment Strategy: Portfolio diversification and risk management
- Long-term Plans: Residency goals and property use intentions
Frequently Asked Questions
Restricted zone boundaries are established by Mexico's Constitution and are unlikely to change significantly. However, specific interpretations and measurement methods may be clarified through legislation or court decisions. Properties near boundaries should always be professionally verified.
This situation requires immediate legal attention to correct the ownership structure. Professional due diligence before purchase should prevent this problem, but if it occurs, you may need to establish a fideicomiso retroactively or face legal challenges to your ownership.
Some developers use fideicomiso structures for financing or legal reasons even in non-restricted areas, but direct ownership is generally simpler and less expensive. Any fideicomiso outside restricted zones should be carefully evaluated for necessity and benefits.
Yes, Mexican citizens and Mexican corporations can own property directly anywhere in Mexico, including restricted zones. The fideicomiso requirement applies only to foreign individuals and foreign-controlled entities.
Related Terms
Fideicomiso
Bank trust structure required for foreign ownership in restricted zones
Fee Simple Ownership
Direct ownership available in non-restricted areas
Foreign Investment Law
Legal framework governing international property ownership
Constitutional Restrictions
Article 27 provisions establishing restricted zones
Bank Trustee
Mexican bank holding property title in fideicomiso structure
Beneficial Ownership
Foreign buyer's rights under fideicomiso arrangement
Ready for Direct Property Ownership?
Enjoy the simplicity of direct ownership in Mexico's Bajío region. Our team specializes in non-restricted area properties where international buyers can own property directly without fideicomiso complexity or ongoing trust fees.