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Mexico's Tourism & Infrastructure
Investment in Mexico is at historic highs. The country received a record $35.2 billion in direct foreign investment in 2013, which is nearly double the level seen in 2012.
At a tourism conference in May, 2014, Mexico's president announced plans to invest over $14 billion to expand and modernize its tourism infrastructure, further improving Mexico's standing as a global travel hub. Mexico welcomed 23.7 million visitors in 2013, generating revenues over $13 billion, an 18% increase over 2012, which was also a record year. Meanwhile, 68 million nationals traveled within the country. Businesses expect the investment to create over 100,000 jobs in the tourism industry.
In addition, there will be $44 billion in public and private funding for national highways, roads, railway and ports, and communication, making it the greatest investment in the nation's infrastructure in 25 years. Over the next 5 years this growth will add an estimated 350,000 jobs per year.
Mexico is the second largest economy in Latin America, with the highest per-capita income. With beautiful beaches, cultural traditions, cuisine, music and festivals, it is also an important destination for business.
Mexico has one of the most stable, open and deregulated developing economies in the world. Tourism is a national priority for Mexico, giving foreign investment necessary means and legal guarantees. Mexico's regulatory framework fully backs foreign ownership in economic areas, offering security to foreign investors.
Changing the Foreign Ownership Laws
Mexico's lower house of Congress, similar to the House of Representatives in the US, has passed legislation by a 2/3 margin to end the requirement of a trust (Fideicomiso) for purchase of property. The measure is currently being considered by the Senate and state legislatures and could soon become law.
In order to legally purchase property in what is known as the "Restricted Zone" in Mexico, which is defined as within 31 miles of the coastline and 62 miles of the borders, foreign buyers needed a real estate trust. Known as a Fideicomiso, it was the mechanism to legally own property in Mexico. Mexico's constitution took measures to ensure the protection of its land after massive land loss throughout history. The fideicomiso was instituted to allow foreign investment in Mexico, which now may not be a necessary step.
This will streamline the process of a property purchase in Mexico by eliminating the previous restrictions and saving a significant amount of money in the closing. The intermediary step of the bank acting as Trustee is eliminated.
The reform of Article 27 of the Constitution will allow foreigners to acquire property in the restricted zone, as well as provide a boost to international tourism development, foreign investment and job creation in Mexico.
This could be the best time to act. Considering all these factors; fee-simple ownership, relatively low property costs compared to other tropical destinations, afforable health care, our current and steady appreciation, and Mexico's dedication to improved infrastructure, all creating a very attractive investment.
With thousands of baby-boomers retiring, there has been a growing demand for real estate along Mexico's Caribbean coastline in the Riviera Maya. This change in the law will serve to further that interest in a property investment.
Mexico's Economic News
The recent strengthening of the peso is attributed to the country's healthy public finances and solid economic growth. Bank of Mexico Gov. Agustin Carstens states that the Mexican economy has had 15 consecutive quarters of growth and Mexico will likely grow 3.5% this year. The peso hit a 20-month high against the dollar, appreciating about 6% this year. Mexico's federal government is expecting a balanced budget this year. All positive points increasing investor interest. (April, 2013)
High-Speed Train To Be Built
A high-speed train has been proposed for the Yucatan Peninsula, with the second phase connecting Cancun to Tulum. Mexico's new President, Enrique Pena Nieto, presented the Merida-Punta Venado Trans-Peninsular Train project, to be built under a concession or public-private partnership. It is a key priority, emphasizing his commitment to improved infrastructure.
The train will use existing tracks that will be modernized. The project will enable passenger travel as well as facilitate trade and shipping of merchandise from Yucatan to Quintana Roo. A modern, diesel-powered train, carrying up to 400 passengers and traveling at 100-110 miles per hour, will be used for the routes. The high-speed line will also connect tourists to the region's most significant Maya sites and travel times will be coordinated with the arrival of cruise ships.