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Ensenada Mexico: Final Chapter

by Brandi

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July 27th, 2009

To finish our section on culture from Ensenada, Mexico and what I learned while on my trip there, this week we’ll discuss a little about the economy, jobs, and land purchases in Mexico.

While talking with our guide Miguel in Ensenada, he told us that most people there are thankful to Americans for NAFTA (North American Free Trade Agreement). Because of NAFTA, many large U.S. companies, that hire 1,200 – 1,500 people, have established plants in Ensenada and pay people wages of $10 – $12 per day, which is higher than their minimum wage. As a result of these opportunities, unemployment has gone down. The companies also pay for transportation to and from work since gas there is very expensive and many people still don’t have cars.

Since many American organizations have opened plants in Mexico, many of their key employees have been required to learn Spanish. Our Spanish course, Visual Link Spanish™, has been very successful in teaching Spanish to managers of large businesses (and their families) who have traveled down to Mexico for a few months to help open manufacturing plants. This type of temporary relocation is occurring more often. It’s becoming necessary for personnel in many large businesses to know Spanish, not only to relocate to Latin America, but also to expand business opportunities for international trade. In the United States, it’s also becoming increasingly important to know Spanish to communicate with Spanish speaking customers.

On a little different topic, here’s one last interesting note I learned in Ensenada about purchasing land in Mexico. Miguel informed me that if you are from another country and try to purchase land in Mexico, you can’t unless you are a Mexican citizen. You can only lease the land; however, this is not true. Here are a couple of things to watch for if you go to Mexico and want to lease or own land:
1. Get the longest lease you can – Don’t get a “short” 20-25 year lease; push for a 100 year lease. Even though you most likely won’t be alive for 100 years, it makes provision for the land to be passed on to others. Or buy under a Bank Trust called a FIDEICOMISO. With this, you own the property for the term of the trust (50 years) and you or your survivors can renew for another 50 years. The bank is the trustee and you are the beneficiary of the trust. This has been in effect for 30 years.
2. Make sure it is a renewable lease – If it is not renewable, when the lease is up, it falls back into the previous owner’s hands.
3. How to Own Land in Mexico (without Leasing) – Our tour guide Miguel told us about two ways to be the outright owner of land in Mexico without leasing. The first is to become a Mexican citizen and the second is to have a baby while living on the land. (That’s easy enough, right?) However, you can purchase property in Mexico as long as it is not close to the border or the ocean. If you want to purchase property by the ocean or border, it must be held in a bank trust.
4. Purchase land only through a “Notario Público” (Notary Public) – The term “Notary Public” has a different meaning in Spanish than it does in English. In English (at least in the U.S.) a Notary Public is a person who witnesses the signing of documents and certifies the authenticity of the signer. In Spanish, a “Notario Público” is actually an attorney who works with legal documents. The “Notario Público” ensures that the person selling/leasing the land is the true owner of the land. Many people and organizations over the past years have purchased land without using a “Notario Público”; they lost all their money because the land wasn’t actually owned by the person selling it.
5. Again, be sure to do a “Fideicomiso” – This is a trusteeship and is the kind of legal document you must have drawn up.
6. Be aware of basic issues when purchasing real estate – Foreign purchasers should be aware of the same basic issues that any prudent buyer would utilize acquiring real estate. Also, they should not depend on the seller for information or advice about the property because they have no way of knowing whether it is true. They should obtain the status of the title to the property requiring an in-depth title search. They should have knowledge of the type of contracts to be utilized for a purchase-sale agreement (compraventa) and preparation of the deed(escritura publica) by the notary public (notario publico) in Mexico. They should be aware of earnestmoney deposit and escrow considerations, and ultimately, a buyer should have an understanding of theactual conveyance method in Mexico and how legal title or beneficiary interest (fideicomiso) is vestedand recorded for foreign purchasers.
Moral of the Story: Spanish is becoming necessary and useful in today’s world.
Sneak peek at next week: Latin American’s are serious about their #1 Pastime!

¡Hasta la próxima semana! (Until Next Week!)
David S. Clark — President / Director

Click here to learn Spanish.

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