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Land in Mexico: A Guide
Land in Mexico may be purchased or leased for industrial purposes. Needless to say, Mexican law has restrictions as to the ownership of land when, for instance, it is located in the northern border strip or near the coastline.
In our Foreign Investment Guide, we have a Real Estate section that explains the restrictions applicable to foreign investors regarding the acquisition of land or real estate.
The price of land or leases in Mexico, of course, varies not only as a result of the location, (i.e. the State and even at municipalities), but also due to zoning laws, if it is inside an industrial park, used or new facilities, a greenfield investment, etc.
Purchase and Lease of Land in Mexico
Purchase and lease of land are governed to a great extent by local law, i.e. the Civil Code of the State; Mexico has 32 states. Rules may vary from state to state and, thus, it is important to be familiar with the local law.
Lease of Industrial Land in Mexico
In Mexico, industrial leasing contracts, among other matters, normally entail:
- the use and/or purpose of the property,
- monthly installments,
- bonds as security,
- VAT of 16%,
- escalation clauses to address inflation,
- responsibilities of the lessor and lessees,. e.g. maintenance and insurance of the property, permits, etc.
The lease of land for industrial purposes may not exceed a maximum amount of years. For instance, 25 years in Jalisco that may be renewed or extended per article 2045 of Jalisco’s Civil Code.
Also, some states may require to register a leasing contract in the State’s Public Registry of Property depending on the duration of the contract.
Industrial Parks or Associations in Mexico
A potential investment in the manufacturing sector may benefit from service providers or associations of industrial spaces. These companies can help a potential investor to find the ideal industrial facilities that can be leased with all necessary permits but also benefit from specific customs and tax programs such as IMMEX.
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