Mexico's Restricted Zone, Explained

The "restricted zone" is the constitutional boundary that defines where foreign nationals cannot directly own Mexican real estate — and therefore where a fideicomiso (bank trust) is required for foreign ownership. This page explains what the zone is, why it exists, where it applies, and what the practical effect is for foreign buyers.

The two boundary lines

100 km (62 miles) from any Mexican border (US, Guatemala, Belize)
50 km (31 miles) from any coastline (Pacific Ocean, Gulf of Mexico, Caribbean Sea, Sea of Cortez)

Why the restricted zone exists

The restriction was written into Article 27 of the Mexican Constitution of 1917 — a response to historical land losses to foreign powers (Texas, the Mexican-American War, the Gadsden Purchase). The framers wrote a permanent constitutional bar on foreign ownership of "national" land near borders and coasts. In 1973, the Foreign Investment Law created the fideicomiso mechanism so that foreign capital could still flow into Mexican real estate without changing the constitutional rule.

Where the zone applies (most popular tourist areas)

All of Baja California Norte and Baja California Sur — every centimeter of both states is within 50 km of either the Pacific or Sea of Cortez
Yucatán Peninsula coasts — Cancún, Playa del Carmen, Tulum, Mayan Riviera, Cozumel, Holbox
Pacific coast — Puerto Vallarta, Acapulco, Manzanillo, Mazatlán, Zihuatanejo, Huatulco
Border zones — Tijuana, Mexicali, Nogales, Ciudad Juárez, Reynosa, Matamoros, etc.
Other coastal areas — Veracruz, Tampico, Campeche, Mérida (parts), Mazatlán, La Paz

Where the zone does NOT apply

Interior Mexico — Mexico City, Guadalajara, Querétaro, San Miguel de Allende (just barely outside), Oaxaca city, Puebla, León, Aguascalientes — is mostly outside the restricted zone. Foreigners can hold direct title (escritura) to property in these locations.

How to check whether a specific property is in the zone

For coastal property, measure the straight-line distance from the high-tide line. For border property, measure from the international boundary. For most well-known tourist destinations, the answer is obvious — anywhere on the coast or near the border is inside the zone. For edge cases (e.g., San Miguel de Allende, Querétaro), Mexico Trust Services can confirm in advance whether your specific lot needs a fideicomiso or qualifies for escritura.

What "restricted" actually means in practice

It does NOT mean: foreigners can't use, occupy, lease, modify, sell, or inherit the property. It only means foreigners can't hold the legal title document directly — they hold the beneficial interest through the fideicomiso instead. Day-to-day, the rights are virtually identical to direct ownership.

Frequently Asked Questions

Has the restricted zone ever been removed or changed?

Not since 1917. The political consensus in Mexico against modifying Article 27 is strong, and there's no serious legislative effort to change it. The 1973 Foreign Investment Law created the fideicomiso workaround precisely because the constitutional rule was treated as permanent.

What if my property straddles the boundary?

The location of the residence/structure determines treatment. If any part of the house is inside the zone, the whole property is treated as restricted. Most parcels are entirely on one side of the boundary or entirely on the other.

Can a Mexican corporation owned by foreigners hold restricted-zone property?

Yes — a Mexican company (S.A. de C.V. or similar) can hold direct title to restricted-zone property even if owned by foreign shareholders, but only for non-residential purposes (commercial, industrial, agricultural). For residential property, you must use a fideicomiso.

Are dual citizens (Mexican + foreign) subject to the restricted zone?

No. Anyone with Mexican citizenship — including dual citizens with U.S. or Canadian citizenship — can hold direct title (escritura) anywhere in Mexico, including the restricted zone. The zone applies only to non-Mexican-citizens.