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What about the new law in Mexico for avoiding the trust?

In the year of 2013, the new government of Mexico published in world media that, the President Enrique Peña Nieto, is promoting this Law Project, modifying the article 27 of the Mexican Constitution, so the FOREIGNERS WILL NOT NEED A MEXICAN BANK TRUST, to hold their property title; it is to say, they will be able to receive DIRECT TITLE FOR THE PROPERTY.

This law modification project was initially submitted on August 1st, 2012, and the current status is “IN PROCESS” of review and approval; This law will not be in force until it has gone through the formal process to have it as a Current and Enforceable Law, during this process, it could be modified or even denied.

It becomes important to this subject to understand the law process in Mexico, so we can understand the process this law will follow in order to become true and legally bound.

A regular Federal Law follows a process of six steps in order to become an effective law. It is 1) Project Presentation: like this one presented by the President in 2013. 2) Congress Review: here the Congressman for Mexico will review the project content and will approve or modify it. 3) Senate Review: here the Senate members will review the project content approved or modified for the Congress and then they will approve or modify. 4) President Approval: once the law has been reviewed and approved by Congress and Senate, the President of Mexico, will review and approve or deny the law. In case of approval it continues for step number 5, but in case of denying it will get back to step number two. 5) Publish the New Law. Once the Law (not a project anymore) has been approved by the president it will be published in the Official Journal for the Federal Government. This Publication will state the date this new law will start this validity and enforceability. 6) Effective date: Once the published date has arrived. The new law will start to be applicable and enforceable for the people under Mexican laws.

But this Trust Law IS NOT A REGULAR FEDERAL LAW, because it is not modifying a regular law, this Trust law is a CONSTITUTIONAL LAW MODIFICATION, which requires a Special Treatment, as the constitution is the main law governing in Mexico. This Law Project will require the special treatment described in the article ___ of the same Constitution, with state that additional, to the six regular steps, this approval will require and additional Review and Authorization where after steps three and four, it will require and additional Review and Approval (something like step 4A) where it will require Approval for at least 50% of the State Congresses in all around Mexico.

Besides this Special treatment for the Constitutional Law Change, we have to remember that they are secondary laws applying to foreigners, like Mexico´s Foreign Investment Law and its special regulation book, together with other laws related.

Our opinion in regard to this subject is that until the date the new law is fully approved, we will know the REAL TERMS FOR THE NEW RULES, without this completion, nobody in Mexico can guaranty the terms for the new law.
This law process might be completed soon (ends of 2013), but it might also take an unpredictable period of time to be completed (months or probably years). The real thing is that nobody can guaranty times or results on this subject until this has become a reality. And even after that, there are still some important things to be adjusted like the secondary laws, or important subjects to be considered like which option will be best. Just as a general example; “Substitute Beneficiaries” right now with the trust is very simple to transfer the property to the heirs; With direct ownership, it will not be possible, it will be regulated by the regular Civil Law which demands to follow the heritance process according to Mexican law, process that has a different cost and unpredictable time of completion.

CONCLUSION: If today, the new trust law has not been fully approved and published. Your best option is to buy your property through a MEXICAN BANK TRUST.

If by today the new law is already in force, you can always contact us, TO GUIDE YOU TO THE BEST WAY TO GO.