By Edith ReyesStudent of Public Accounting and Finance at Universidad La Salle, she is currently a member of the Real Legal Research Center and the Legal Department of SIL MÉXICO.

Mexico is a great tourist attraction whose gastronomy, culture, traditions, and beaches stand out.  In recent years, the coastal area has become the preferred destination of residence for foreign tourists, captivated by the majestic views of the beaches. 

However, they face a big problem since it is not possible for them to acquire direct ownership of this land because it is a “Restricted Zone”, this does not mean that it is totally impossible for them to enjoy this as a residence since Mexican laws allow foreigners to acquire properties in this zone through a legal figure called restricted zone trust, but what is the restricted zone, what is the restricted zone trust, what is the restricted zone trust?

The restricted zone is the strip of one hundred kilometers along the borders and fifty kilometers along the beaches, which for no reason may foreigners acquire direct dominion over these lands and waters, as established in Article 27 of the Constitution, section I. 

Now, once the concept of restricted zone is understood, we can go deeper into the restricted zone trust, this is a legal figure, called a contract whose objective is that foreign persons may obtain the use or enjoyment of a real estate property located within what the law establishes as Restricted Zone.

This contract is made up of four essential figures which are:

  • The settlor: 

Understanding the settlor as the person who contributes to the real estate, i.e., the seller of the land (BBVA, 2020).

  • The fiduciary:

The fiduciary can be any credit institution authorized by law, which is going to acquire the domain (BBVA, 2020).

  • The trustee: 

This is the person who has the right to the use and enjoyment of this real estate, also known as the foreign buyer.(BBVA, 2020).

  • The trust property:

It is the real estate on which the trust is constituted.

In order for the trust to allow the use and enjoyment of the trust property, without constituting real rights over it, a permit from the Ministry of Foreign Affairs is required for the credit institutions to acquire as trustees, rights over real estate located within the restricted zone.

In order for these rights of use and exploitation to be granted, the trustees must be foreign individuals or legal entities, as provided in Article 11 of the Foreign Investment Law.

Article 12 of the Foreign Investment Law establishes that the term “use and utilization of real estate” refers to the rights of use or enjoyment of such real estate, including, if applicable, the obtaining of fruits, products, and, in general, any yield resulting from the operation and lucrative exploitation, through third parties or the fiduciary institution.

This figure regulated by Mexican regulations, which confers personal rights of use and enjoyment, represents a great opportunity for people of different nationalities whose objective is to reside or invest and enjoy the benefits that it generates, as long as it is carried out within the required legal framework. It is considered a great legal tool of acquisition since it allows the foreigner to enjoy this type of trust for an initial period of 50 years, extendable, which makes it without a doubt the ideal way to enjoy the wonderful views that the Mexican beaches offer in addition to entering an infinite horizon of gastronomic delicacies and incredible traditions that undoubtedly elevate lifestyle to the maximum.


  1. Cámara de Diputados del H. Congreso de la Unión. (1917). Constitución Política de los Estados Unidos Mexicanos. https://www.diputados.gob.mx/LeyesBiblio/pdf/CPEUM.pdf
  2. BBVA. (2020). Fideicomiso de Zona Restringida. https://www.bbva.mx/content/dam/public-web/mexico/documents/empresas/fideicomisos-bbva/zona-restringida/conceptos-basicos-fideicomiso-zona-restringida.pdf
  3. Cámara de Diputados del H. Congreso de la Unión. (1993). Ley de Inversión Extranjera. https://www.diputados.gob.mx/LeyesBiblio/pdf/44_150618.pdf



By Thorvald Pazos Casas – Law degree from the Universidad Regional del Sureste, is a postulant attorney in criminal, civil, agrarian, and tax matters, and is currently a research attorney and part of the Research Center of SILMEXICO.

Currently, one of the main and beneficial legal vehicles used to carry out large real estate projects and businesses is through trusts, within this attractive legal tool we can highlight the so-called right of reversion, however, what is it, how is it stipulated and what benefits does it provide?

According to the definition provided by BANCOMEXT, reversion is understood as; 

“Act by which the ownership of the assets or rights remaining in a trust at the time of its extinction is returned or retransferred to the original owner”.

The right of reversion refers to the power or right of the settlor to recover the assets contributed but not disposed of to the trust under certain conditions within a specific period of time, this right can be established at the time of the creation of the trust and is subject to the terms and conditions of the trust.

There are several types of reversion rights, among which the following stand out: 

    • TOTAL: Without conditions or reservations, in this case, the trustor exercises it and the trustee complies with the instruction.
    • CONDITIONED: Under certain conditions for the trustor to exercise this right. If you did not obtain the building permits within the first three months of the creation of the trust.
    • PROHIBITED: Due to the type of trust (in guarantee, in restricted zone, transfer of ownership) the parties agree that the settlor will NOT have this right.

How is the reversion right stipulated?

The stipulation of the right of reversion must be in writing and can be agreed upon at the time the trust contract is executed or subsequently by means of a trust amendment agreement.

At the time the contract or agreement is executed, this reservation must be identified in the clause referring to the patrimony, which will explain the manner in which the trustor may request the reversion of its assets or rights.

Legal basis.

It finds its nature in several legal ordinances, among which we highlight the following:

Fiscal Code of the Federation:

Article 14, section V. The contribution of the real estate made by the trustor will not be considered as alienation, as long as he/she reserves the right to reacquire the trust property from the trustee, either at the time of the execution of the contract or in a subsequent act.

At the moment this repurchase right is lost it is considered alienation, when a person decides to “reserve the right of reversion of the assets contributed to the trust”, he is simply agreeing that he has the power to request the trustee to return to him part or all of the assets that he previously transferred in property or rights.

If the return is partial and does not hinder the achievement of the trust’s objectives, the trust will remain in force. However, if the return, even if partial, makes it impossible to achieve said objectives, the trust will be extinguished, in accordance with the provisions of Article 392, Section II, of the General Law of Credit Instruments and Operations (LGTOC).

It is important to remember that, according to Article 381 of the LGTOC, the assets contributed to a trust must be destined to lawful and specific purposes (which must also be feasible, according to Article 1827, Section I, of the Civil Code of the Federal District, which applies in a supplementary manner in commercial matters). Therefore, if the return of assets, even in part, makes these purposes unattainable, the trust is extinguished.

Benefits of the right of reversion

    1. Control and Protection of the Settlor: The reversionary right allows the settlor to maintain essential control over the assets contributed to the trust. This is especially valuable when the settlor desires the ability to recover the assets in the event of specific circumstances, such as defaults, legal or economic changes, or any eventuality. 
    2. Tax Benefits: From a tax point of view, the right of reversion is essential. According to the Income Tax Law (ISR) and municipal legislation, as long as the trustor retains the reversion right, it is not considered that a disposal of assets has occurred. This implies that no taxes are immediately generated at the time of the contribution to the trust, which can be beneficial from a tax perspective.
    3. Flexibility: The right of reversion can be adapted to the specific needs of the settlor and changing circumstances. It can be established on a whole, conditional, or even prohibited basis, depending on the objectives and agreements between the parties involved. This provides flexibility in asset planning and management.

Therefore, the right of reversion mainly guarantees, controls, and protects the trustor against any eventuality, and as far as tax matters are concerned, the Income Tax Law (ISR) and some municipal legislations consider that the alienation of assets has not occurred as long as the right of reversion has not been lost.