By Sylwia Patatyn DeSoto
What legal structures are available to investors who want to develop real estate & hotel projects in Mazatlan?
There are two most common structures used by local and foreign investors in Mexico: a Mexican corporation and a guarantee trust (fideicomiso en garantia). There are many different types of corporations available to investors and they vary in structure. You do not need a Mexican partner to open a corporation nor need to be a resident, however, as a foreigner you need a special type of a visa that will allow you conducting business in Mexico. The guarantee trust is the preferred legal mechanism in cases where the land owner puts the land as his/her investment in a joint venture with the developer. Under this structure the property deed as well as the project financing are held and disbursed by a Mexican financial institution.
What is the capital gain tax in Mexico and are there fiscal strategies that could help reduce it?
Depending if you are a Mexican citizen, a resident in Mexico, a tourist or a Mexican corporation, you will face different tax schemes. The legal system allows very attractive tax exemptions of about $4,000,000 pesos per owner for Mexican citizens and residents, who sell their primary residence as long as they meet key requirements established by the law. Non-residents face capital gains tax of up to 35% of the gain and the corporations pay a flat 30% tax. There is a number of fiscal strategies that can be used by individuals and corporations alike & getting guidance from a tax advisor or an experienced realtor can create substantial savings.
Does Mexico have a national real estate association and the MLS system?
The main real estate association in Mexico is called AMPI and is present in nearly all the Mexican states, including Sinaloa. It is associated with the US, Canadian and various Latin American real estate associations & has a strict code of ethics that its members shall obey. It has a well-structured MLS system.
Does the Mexican government offer any fiscal incentives to investors?
There is a CEPROFIES certificate offered by the state government to individuals and companies (Mexican and foreign) that create new employment opportunities and wish to develop projects with a minimum investment of about $300,000 pesos ($50,000 UDIs). The tax incentives are available for expenses such as property taxes, public registry fees, construction permits and others. You can consult the specifics on http://citsinaloa.gob.mx/incentivos-fiscales/