Excerpts from the article:
A new constitutional amendment, proposed by Mexican Senator Mario López Valdez of the Institutional Revolutionary Party (PRI) on March 5, 2009, sets the stage for what could become one of the most dramatic changes in Mexico’s regulations on foreign real estate ownership and investment since the 1971 recognition of the “bank trust,” or fideicomiso.
The fideicomiso being a mechanism for foreigners to control coastal property, as the document gives the trust deed moral Mexican citizenship by law, and as such trust owners may hold the property to the sole benefit of the foreign beneficiary. Prior to 1971, foreigners were relegated to controlling real property through either leases or time-share clubs.
Mexico boasts nearly 7,000 miles of coastline, ranking it the 12th longest coastline in the world. The country’s 1917 Magna Carta reads, in Article 27, Section 1 (in part), “Under no circumstances will foreigners be able to acquire direct ownership of land and waters within a zone of one hundred kilometers [62 miles] along the borders, and fifty (kilometers) [31 miles] along the shores.”¹ (This language was adopted by Mexico in the Constitution of 1917, after hundreds of years of invasions by Spanish, French and even United States forces.)
However, the current global economy and the importance of international tourism make such restrictions anachronistic and inhibitors to investment. The current Constitution has been viewed by many in the business sector as impeding the proper functioning of the tourist sector.
The initiative ensures that foreign ownership would be for habitation purposes only and, as such, will not threaten Mexico’s sovereignty, a major point of contention with more nationalistic voices.
The development of tourism is a national priority for Mexico, given its importance as a development factor and growth engine. Tourism is credited with elevating the country’s productivity, employment opportunities, and generally lifting areas of the country with fewer economic development options, thereby increasing the quality of life of the people.
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