Foreign buyers in Mexico’s restricted zone (within 100 km of the border or 50 km of the coast) cannot hold direct title and need a vehicle.[Constitución Política de los Estados Unidos Mexicanos, Artículo 27, 2026-04][Ley de Inversión Extranjera, Artículos 10–11, 2026-04] The two real options are a bank trust (fideicomiso) authorized by the Secretaría de Relaciones Exteriores, or a Mexican corporation. The math is more lopsided than it looks.
The scorecard
| Dimension | Fideicomiso | Mexican corporation | Edge |
|---|---|---|---|
| Setup cost | ~$2,500 one-time (SRE permit + bank trust + notary) | $2,000–$4,000 incorporation; ongoing legal + accounting | Fideicomiso |
| Annual maintenance | $600–$700/yr bank trustee fee | $2,500–$5,000/yr accounting + SAT filings | Fideicomiso |
| Setup timeline | 4–8 weeks (SRE permit gates the closing) | 6–10 weeks (RFC + NRA registrations + capital deposit) | Fideicomiso |
| Personal-use property allowed | Yes, full economic rights as beneficiary | Restricted; the corp must have a stated business purpose | Fideicomiso |
| Number of properties | One per trust (additional trusts possible) | Unlimited inside the corp | Mexican corporation |
| Tax on rental income | 25% non-resident withholding on gross rent | 30% corporate ISR on net (deductions and depreciation apply) | Mexican corporation |
| Capital gains at sale | 25% on gross or 35% on net gain (documented deductions, primary-home exemption may apply) | 30% corporate ISR on gain; can offset losses | Mexican corporation |
| IRS treatment (US) | Not a foreign trust under Rev. Rul. 2013-14; no Form 3520 | Controlled foreign corporation rules; Form 5471 typically required | Fideicomiso |
| Privacy | Trust is in your name as beneficiary | Corp shields ownership at the public registry | Mexican corporation |
| Inheritance / succession | Substitute beneficiary clause avoids Mexican probate | Shares pass through corporate succession or testamento; more involved | Fideicomiso |
| Exit / wind-down cost | Trust cancellation at sale, ~$500–$1,000 | Corporate dissolution, $2,000–$5,000 plus closing accounting | Fideicomiso |
Q2 2026 published ranges. The Edge column flags the cleaner answer for the use case named.
US tax treatment of the fideicomiso turns on Revenue Ruling 2013-14, which holds the Mexican land trust is not a foreign trust for US tax purposes, meaning no Form 3520 obligation.[IRS, Revenue Ruling 2013-14, 2026-04] A Mexican corporation, by contrast, can trigger Form 5471 controlled foreign corporation reporting whenever a US person owns enough of the shares.[IRS, Instructions for Form 5471, 2026-04] The 30% corporate ISR rate, 25% non-resident withholding on gross rent, and the 25% gross / 35% net capital-gains rules are all from SAT’s published rate tables.[SAT, ISR para personas morales y arrendamiento, 2026-04]
Use a fideicomiso when
You are buying one property in a restricted zone for personal use, a single short-term rental, or both. Lower setup, lower carry, no US-side reporting headache, and the substitute-beneficiary clause is the cleanest inheritance path of any Mexican ownership vehicle. This is the right call for the large majority of cross-border buyers. Walk through the mechanics on our Mexico fideicomiso explainer.
Use a Mexican corporation when
You are running a real-estate business: three or more rental properties, a boutique hotel, mixed-use commercial, or a development play. The corporate structure unlocks expense deductions, loss carryforwards, and entity-level operations on net income rather than gross. The carrying cost makes sense once you have the volume to amortize it.
Don’t use a corporation just for liability shielding
A Mexican S.A. de C.V. does not provide the same liability protection a US LLC offers, especially for foreign owner-operators. If liability is the concern, the cleaner answer is a Mexican homeowner policy plus a US umbrella, not a corporate wrapper that runs $3,000+ a year and triggers Form 5471 filings. For the US side of the picture, see our Mexico tax guide for American buyers.
Our recommendation
Choose the fideicomiso unless you can specifically articulate why a corporation is worth the carrying cost. The break-even is around three properties or a clearly commercial use case.
The fideicomiso is purpose-built for foreign buyers and the system has more than 50 years of precedent. The corporation is a legitimate vehicle for legitimate businesses, but most foreign buyers who use it for a single personal-use home end up paying $30,000+ in extra fees over a 10-year hold for benefits they never realize. Run the math before you incorporate, and pair whichever vehicle you pick with a Mexican will (testamento) so the inheritance path works.
If you want our updated breakdowns when SAT rates or SRE fees change, the newsletter is where those land first.