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Canadian or American notary public is a public officer who is licensed to serve the public in non-contentious affairs and whose principal duties are to witness and authenticate certain documents, also known as notarization. A Notary may take testimony, affidavits, administer oaths, deal with matters concerning estates and perform other official acts depending on the jurisdiction. The term of notary public refers to common-law notaries.

The Difference between a Notary Public and a Notario Publico in Mexico is that the Notary in Mexico is an experienced lawyer who has been selected and appointed by the Mexican state after practicing law, completing a rigorous application process, passing a stringent exam and also meeting all qualifications set by the government. A Notario designation carries a great deal of responsibility as all real estate purchases must be registered with a Notario; they are legally responsible to ensure the deed title is clear and recorded at the Public Registry.

They provide security for original records and documents and are responsible for filing the documents with the Public Registry of Property. A Notario can be held liable in both civil and criminal terms.  

If a Notario Publico is required to finalize my real estate deal, do I still need to have a Lawyer? The answer is yes!

If you are buying Real Estate in any country you will hire a lawyer to finalize the deal; it is also a crucial step here in Mexico. When purchasing property in a foreign country you need a professional on your side, someone that knows the rules and regulations.

There have been incidents in Mexico where people have unknowingly purchased property that is encumbered by liens or cannot be owned or titled, using a lawyer that is licensed to practice in Mexico could have saved the buyer a great deal of grief and money.

A local Mexican lawyer can not only protect your investment but also save you time and money. With valuable contacts and resources—such as financial institutions, experienced accountants, and recommendations for trusted Notarios—they provide the support you’ll need.

They are well informed of the market and will work to provide you with the best-priced options.

During the real estate purchase, the Notario Publico will authenticate all the legal documents, transfer of title, calculate the capital gains tax and ratify all Real Estate transactions in Mexico. If a real estate transaction was not recorded in the Public Registry by a Notario is not valid.

Although a Notario is a lawyer they will not function as your lawyer, their job in this situation is to be neutral, as the Notario is working for the buyer, the seller and the government, we recommend also using a lawyer to represent your interests.

The lawyer will also ensure there is no human error and that your property title is properly registered, verifying taxes and utilities have been paid in full. Be sure to hire a lawyer who will provide a Title Guaranty verifying the title is free and clear.

To ensure your real estate transactions in Mexico proceed smoothly, it’s essential to have the support of an expert lawyer and a trusted Notario. At MexLaw, our firm is here to guide you every step of the way, protecting your interests with the experience and knowledge you need. Trust MexLaw for your investments in Mexico — contact us today.

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Is it safe for a foreigner to purchase land in Mexico?

Property that lies within 50 kilometers (31 miles) of the coastline or within 100 kilometers (62 miles) the borders of Mexico is in what is considered to be the Mexican Restricted Zone. In the past 30 years Mexican laws have changed and are more accommodating to foreigners, including citizens from the United States and all other countries, allowing them to buy, indirectly, the rights to hold and develop or make improvements, to occupy, sell or rent the property.

How can I buy real estate within a Mexican Restricted zone if I am a foreigner?

Legal ownership is possible by using one of two methods which is generally determined by the intended use of the land.

For residential real estate, a bank trust, known in Spanish as a fideicomiso, is the most common method. While the bank has technical “ownership”, for a 50 year term, it has no rights to the property, and is mandated that any dealings with the property are to be solely at the instruction by and for the benefit of the beneficiary which may be an individual or corporation. The fideicomiso allows a buyer to avoid inheritance taxes and to put the property in a will, as well as the obvious rights of real estate ownership including building or developing the property or selling the property. Foreigners are required to obtain a permit to own the land, as is the case with ‘direct deeds’, from the Secretary of the State, which is essentially an endorsement from the Mexican government of ownership of the property. As such, a fideicomiso affords foreigners the same rights and responsibilities full and direct ownership gives. Upon the sale of the property the buyer can assume the current fideicomiso or can take out another one.

For commercial real estate, a foreigner will generally form a Mexican corporation, also known as a Sociedad Anonima (SA) that buys the property, as the law permits a foreigner 100% ownership of a corporation.

How do I create a Mexican Corporation Sociedad Anonima (SA)?

Once you obtain a permit from The Department of Exterior Relations, whereby you register the name of the Mexican corporation, you then create the articles of incorporation. This requires a “Notario” who is a keeper of the public record appointed by the state, licensed as an attorney who passed the Notario exam and is willing to forgo litigation.

After the articles of incorporation are recorded in the public record, next is the process to obtain necessary permits Tax ID (RFC), any others.

 How can I confirm that a seller has legal title to a property?

A buyer should request a copy of the lien certificate or “certificado de libertad de gravamen” which will indicate the owner of record, including the surface area and classification of the type of property, the legal description and if there are any encumbrances filed against the property. A title search of the property should be performed and a copy of the title to the real estate should be requested of the seller.

In Mexican transactions it is the responsibility of the Notario Publico to perform the title search but the Notary generally examines the current deed and current lien certificate. Accordingly, it may be prudent to hire a Mexican attorney for a legal opinion on the status of title.

What is the role of the Public Registry of Property?

Public instruments in Mexico, such as deeds, can be researched at the local Public Registry of Property which is open to the public and exist in most cities and towns in Mexico.

It is a government office where documents are registered allowing third parties to research land titles and liens on titles. Any Public Instrument is required to be finalized and signed by a Notario Publico. Public Instruments usually identify the property; include the entities involved in the transaction as well as the Notario, seller, buyer, and the bank if there is a fideicomiso.

 Who is involved in real estate transactions in Mexico?

Typically, there are four entities involved when consummating a real estate transaction in the restricted zone: The real estate agent, the attorney representing the buyer, the seller and the Notary Public.

It is advisable to hire a Mexican attorney of your own, as opposed to that of the seller, to perform title searches, write contracts and review the conditions and terms of a sale. The attorney should also be able to provide a “cédula profesional”, a document that is a registered license to practice law in Mexico and will include a signature and photograph of the attorney.

What is the role of Public Notaries (Notarios Publicos)?

Real estate transactions and the legal conveyance of any type of property in Mexico involve the participation of a Notario Publico.

In standard transactions, the Notarios prepare deeds in accordance with the purchase-sale agreement. The buyer and seller get together with the Notario to formalize the transfer of property and authorize the signatures upon execution of the deed. Notario’s record the deed with the public registry of property where the property is located after the property has been transferred. A Notario’s duties before the closing include verification of title, searching public records for status of the title and for liens against the property and to examine the seller’s documents to ensure accuracy and legitimacy.

They are also responsible to collect property taxes and government transfer taxes.

How much should I expect closing costs to be?

Common practice in Mexico is that the seller pays capital gains tax and the real estate broker’s commission. The buyer is responsible for paying the transfer or acquisition tax and all other closing costs including the Notario’s fees.

How do I start the process of buying real estate in Mexico?

The process of buying real estate varies from case to case.
Typically you will find a property you want to purchase and will verbally agree a price. The initial offer to purchase detail the costs, inclusions and exclusions, and any deadlines. A deposit is usually paid by the buyer and any penalties for cancellation are determined.

If the property is inside the Mexican restricted zone, you will need to set up a bank trust / fideicomiso or form a Mexican corporation.

If you are buying a condo or direct from a developer in a residential development it is important to have the Notario Publico ensure the developer’s permits are in order.
You will obtain a copy of the Land / Property Deed from the seller, which will be evaluated and verified by the Notario Publico.

You will need to provide official documents to the Notario Publico that can include a photo ID such as a passport, birth certificates, marriage certificates, and your tourist or other visa to verify that you are in Mexico legally.

The Notario Publico will require the seller to produce documents, including the original property deed, current tax records for the property, paid public utility bills as well as details of land-service fees with zero balance due.

Payment of any capital gains taxes are made at the time when the deed is signed and is done at the Notario Publico’s office.

The Notario Publico’s fees are paid at this time in addition to any other taxes associated with the purchase of the land.

What kind of contracts and agreements are involved in a Mexican real estate transaction?

In Mexico, real estate transactions usually have two contracts. First is an offer to purchase and a promissory agreement. These are preliminary agreements containing the basic transaction information, but not the document in which the property title is transferred to the buyer. The second contract is the agreement to be handled by the Notario which transfers the title to the buyer. This may come in different forms.

The Civil Code defines an agreement as an accord between two or more persons to create, transfer, change or terminate obligations. The buyer’s attorney should write the promissory agreement, after a written offer has been accepted, because this is the most important document in the process determining the terms and conditions of the transaction.

Considering purchasing property in Mexico? Our legal firm specializes in real estate transactions for foreign buyers, offering comprehensive guidance to ensure a secure and compliant process. If you have further questions or are ready to proceed, contact us today. We provide expert legal counsel to help you navigate every aspect of your investment with confidence and peace of mind.

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Doing business in Mexico may be just what your company needs to prosper, with lower wages for skilled workers and lower transportation costs since Mexico is situated closer to the US and Canada, than, China or India for example. Location also ensures faster production turnaround time, not to mention ease of communication, and similar time zones.

Since, Mexico is a part of The North American Free Trade Agreement NAFTA, between Mexico, Canada and the United States there are many benefits to doing business in Mexico. NAFTA eliminates tariffs between the countries and has built in agreements and legal processes, with international rights for business investors.

Foreigners can own 100% of a Mexican corporation and open their business in Mexico. Mexico’s legal system and tax laws for businesses do not discriminate between foreigner-owned businesses or those owned by Mexican nationals. However, it’s important to note that in certain industries, Mexican law requires a minimum percentage of national investment. This means that while foreign ownership is generally unrestricted, there are specific sectors where the law mandates a certain level of Mexican participation.

Owning a business in Mexico can be a lucrative initiative, but make sure you have a Mexican law firm to represent you and your company, they will help you setup your business in Mexico, a law firm like MexLaw can provide important guidance through, creating a corporation, advising you on Mexican labor law, Mexico’s tax laws, and all red tape that goes along with doing business in Mexico.

Anyone who has begun the process of opening a business in Mexico can not stress enough the importance of using a lawyer, you will need to deal with all business aspects, zoning and building permits, taxes, environmental regulations, and even your own immigration status.

Business entity options in Mexico are similar to those in the rest of North America, including Public Limited Companies or Corporations (Sociedad Anónima (S.A.)). These entities must have fixed capital, but there is also the option of variable capital. This entity can have one or more board members and an unlimited number of shareholders. Only the Investment Promotion Public Limited Company (Sociedad Anónima Promotora de Inversión) is required to have at least two board members.

Limited Liability Company (Sociedad de Responsabilidad Limitadada (S.de R.L.) also, have fixed capital but there is the option of variable capital. This entity must have at least 2 partners, but no more than 50.

Sole Trader (Persona Física con actividad empresarial) refers to an individual conducting business under their own name for business and tax purposes.

Professional Service entities (Sociedad Civil (S.C.)) are designed for consultants, translators, lawyers, or accountants. No minimum capital is required. It is primarily for a group of professionals in a field or service that is not predominantly economically driven.

All these types of companies are required to have an accounting firm to ensure proper management and compliance with legal requirements.

Nonprofit entities (Asociación Civil (A.C.)) include charities, organizations, or Homeowner’s Associations (HOAs), not the administration companies.

The most common entities are corporations and limited liability companies. A professional legal team can help you assess which option is best for your business and which will provide the most operational benefits.

Mexico’s Labor Law

It is important to familiarize yourself with Mexico’s labour laws. Foreigners doing business in Mexico need to be cautious of their hiring practices and the  labour laws of Mexico. Mexico has strict labour laws in place to protect the employees, but a Mexican law firm can help you make sense of the labor laws of Mexico.

As an employer, it is in your best interest to hire a Mexican law firm like MexLaw to understand your rights and obligations, develop employee contracts, and adopt best practices for hiring staff. You’ll receive guidance on legal expectations to ensure a happy, productive workforce and avoid issues with the labor board.

All conditions and expectations must be documented in an employment contract between the worker and the employer, with the aim of ensuring the best interests of both parties.

Labor laws can change with each state and update without notice.

As in Canada and the US, there are many labor laws involving, child labor, discrimination, harassment, maternity leave, profit sharing, overtime, yearly wage negotiation, vacation days, and union regulations if applicable.

MEXLAW can assist you in managing employee hiring, helping your company resolve labor disputes and guiding you through Mexican labor laws and proper employee administration. Additionally, our sister company Mextax can provide payroll services to ensure your company complies with all regulations and avoids penalties.

It’s also crucial to familiarize yourself with Mexico’s tax laws, it is important that you have a reliable accountant in Mexico to help you deal with the different taxes and make sure you take advantage of tax breaks and deductibles.

Depending on the business you open, you may be required to pay corporate tax, tax on dividends, asset tax, value added tax, and payroll taxes. Mextax can provide accounting services for your business to help you get the most from your investment.

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Many foreigners invest in real estate in Mexico to benefit from the high returns on investment that this market offers, to enjoy their leisure time here by owning vacation property, to retire, or a combination of all of the above. Ironically, few foreigners give any thought to what will occur to their property in the event of death. The purpose of this article is to provide some insights on how Mexican Law will deal with property owned by foreigners upon death and, hopefully, will provide foreigners with some suggestions on how to deal with this situation.

A foreigner with property in Mexico who dies will have their property distributed to their legal heirs, depending on whether they die without a Will (ab intestate), with a Mexican Will, or with a foreign Will.

If a foreigner with property in Mexico dies without a Will, the law provides that their property is divided proportionately between their legal spouse (and not common-law spouses) and their children. The process is complicated and requires the translation and certification of foreign documents such as marriage certificates, marriage contracts, birth certificates of the children and, if they are minors, the representation of those minors by an independent tutor in Mexico. The process can take more than a year to resolve and the property, in the interim, needs to be administered until they are transferred to the rightful heir. The cost can be considerable.

A foreign Will is legally valid in Mexico. However, it is inconvenient and it can be costly to have it recognized and acknowledged in this country. The process to have a foreign Will recognized in Mexico is as follows, the steps need to be done consecutively and in order: the Will needs to be probated in the jurisdiction or residence of the deceased; once probated, the Will must be legalized in Canada, or apostilled by the Secretary of State in the United States. Other countries have the same process but different government authorities will have the documents apostilled.  

Once this is accomplished, the certificate of death, the Will and the Probate decision must be sent to Mexico to be translated into Spanish by an official translator in the state and district where the property of the deceased is located. This technically constitutes a second Probation of the Will were a judge acknowledges the testator’s directions and, in some cases, will require the presence of the heirs or representatives in Mexico during the reading of the Will.   A judgment is then issued instructing notaries (for real estate) or financial institutions (for bank accounts) to transfer the property to the name and benefit of the heirs.  It can take six to nine months or more for this process to be completed and the costs are determined by a percentage of the value of the assets being transferred (one to three percent) plus expenses, if any.

With a Will made in Mexico, the process is simplified and the delays are shortened. If a foreigner owns property through a Bank Trust, the Trust Deed provides the names of the first and second beneficiaries of the Trust.  In that case, a certificate of death needs to be provided to the Bank Trustee who then is required to change the name of the Trust to the benefit of the named beneficiaries. Property held through a Bank Trust is not included or referred to in a Will made in Mexico. For other property, including real estate that is not held within a Bank Trust, a Will made in Mexico identifies the beneficiaries (general heirs that inherit all the property) and specific legatees (individuals that inherit an identified item or amount of money).  It also appoints an executor who will administer the property until it is transferred to the heirs and will assist the notary with this process.

A foreigner needs to go before a Notary in order to grant his/her Will made in México. Lawyers can act as legal counsel and advise foreigners on how to structure their Wills, transfer their property and consider certain fiscal consequences on the transfer of property. Most lawyers prepare the Will on behalf of their clients, in Spanish, explain the contents to their clients in their language of choice and then have a Notary register it to give it full legal effect. The Will needs to be signed in the presence of the Notary.

There are three steps to follow to Probate a Will made in Mexico. The first step is called Radicación where the Will is opened and the Notary reads it to all the beneficiaries in the presence of the Executor. The Executor of the Will is recognized and acknowledged and they must accept this position as administrator. Beneficiaries need to accept or refuse the inheritance of the estate. The second step is the publication or edictos. At this stage, the Notary will send an official document to two publications that are wildly circulated in the State where the Will is opened and also to the official newspaper of the State informing the general public of the existence of the Will, and to provide them with the right to claim an interest against the estate. If no-one files a claim within 40 working days, then the process will continue to the third and final stage. The final step is referred to as the escritura de adjudicación where the property is officially transferred to the name and benefit of the heirs.

If there is a claim against the estate, or if there are any minors involved, then the process is referred to the local courts who will decide on the claim or who will assist the minors for the transfer of the property.

Finally, property transferred on death is not subject to any capital gains in Mexico but, in some cities, will be subject to transfer duties if it is real estate.

Understanding who will inherit your property in Mexico requires careful consideration and proper legal guidance. The process can vary significantly depending on whether you have a Mexican Will, a foreign Will, or no Will at all, and each scenario comes with its own set of challenges. To ensure that your wishes are honored and that your heirs face minimal complications, it’s crucial to have expert legal advice. Mexlaw is here to assist you in navigating these complexities, offering personalized support to safeguard your investments and secure your legacy. Reach out to Mexlaw today to learn how we can help you protect your property in Mexico.

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