As we know, there are two ways in which a foreign individual can acquire ownership of real estate inside the restricted area for them (100 km / 62.13 mi from borders, 50 km / 31.06 mi from beaches), always taking into account the purposes of the intended acquisition. If the acquisition is to be made for residential or leasing purposes, the proper way to proceed is via an escrow before a Notary Public. This requires of a permit from the Ministry of Foreign Affairs, whereby, among other factors, it will be determined that although a banking institution will hold title of ownership over the property, the beneficiary of said property will be the foreigner who acquires, and should register obligatorily before the Public Registry of Property and Commerce of the municipality wherein the acquisition was carried out. There are two main benefits to the escrow: the first one is a special set of inheritance clauses where beneficiaries are designated in the case of death, and the second is that the services of a Public Accountant will not be required.
Foreigners are not allowed to acquire direct title of ownership over land and waters in a 100 km strip along the borders 50 km in beaches
Nonetheless, if the acquisition is intended for commercial purposes, the best option is to carry out the transaction by means of a legal person or a company. Among other requirements, this should be carried out before a Notary Public and a permit for the use of the chosen name should be obtained from the Ministry of Economy. The company should be established as an act additional to the acquisition of the property, however, and through this procedure the legal person is the one holding title of ownership over the property. As in the case of the escrow, this should be registered obligatorily before the Public Registry of Property and Commerce. On the other hand, this way of proceeding requires hiring the services of a Public Accountant to carry out the monthly and annual tax return for Income Tax and VAT; it also entails the keeping of company books of Shares and Shareholders, Assemblies and Stock.
Derived from the above mentioned, the information provided by your trusted Notary Public translates into proper advice according to your needs and, therefore, grants greater legal certainty to the intended acquisition.
M.D.C. Alejandro Emilio Rabishkin Castillo
Director Jurídico – Notaría 39
Retorno 7 Robalo número 20-a Mz 11 Lt 9 Sm3
Tels. 01 800 505 58 81 y 887 34 77 (con 10 líneas)