Real Estate & Legal Topics

The origins of the Restricted Zone

Some background information on the law preventing foreigners from purchasing property in certain areas of the country

If you’re interested in real estate, you surely know that in order to own property in the Riviera Maya you must get a bank trust or create a Mexican corporation. This requirement is due to the Restricted Zone, which is the strip of land within 50 km of the coastline and 100 km from the border.

According to Article 27 Fraction 1 of the Mexican Political Constitution, foreigners can’t directly acquire a property located in the Restricted Zone. Do you wonder why? Here’s a little history class.

Back in the old days, in an attempt to raise Mexico’s population, it was considered necessary to support immigration from other countries. Therefore, the Decree of Colonization was made on August 18, 1824. However, this order could have been a little threatening for Mexico and its territories, since there was risk of a possible invasion from foreign dominion. An actual example of this is the state of Texas, a territory that used to belong to Mexico and later became part of the U.S., but that’s another story.

Anyway, in order to avoid losing more Mexican territory, the Restricted Zone law was launched, with the ultimate purpose of preserving the sovereignty and territorial integrity of the country.

This law prohibited colonization by foreigners along the borders with neighboring countries (U.S., Belize and Guatemala). In the same way, the law gave preference to Mexican citizens in terms of land distribution. As a result, it is not permitted that foreigners and foreign companies acquire land or property in the restricted zone, unless it’s done using the aforementioned options.

Although there have been some attempts to remove this law from the Mexican Political Constitution, a lot of people have opposed them and these initiatives have failed. Mexico is stuck between a rock and a hard place with the idea of removing or keeping a law that is probably a little too out-of-date and unnecessary these days.

If you want to learn more about ownership in Mexico, download our free guide about this topic here:

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