What is a FIBRA?
A FIBRA (Fideicomiso de Inversión en Bienes Raíces) is a Mexican investment vehicle similar to REITs (Real Estate Investment Trusts) in the United States.
According to Mexican law, a FIBRA must be established as a trust and is required to annually distribute at least 95% of its taxable income to its investors.
FIBRAs in Mexico
FIBRAs were introduced in Mexico in 2004, with the creation of a specific tax regime that recognizes them as real estate investment vehicles.
Their legal framework is based on:
Amendments to the Income Tax Law and its regulations.
Legislation applicable to trust and securities operations in Mexico.
Regulations allowing AFORES to invest in FIBRAs within their pension funds.
Tax provisions issued annually by the Ministry of Finance and Public Credit.
Under the investment regime, AFORES can allocate a portion of their resources to FIBRAs, as they are classified as structured instruments.
SIEFORES (Specialized Retirement Fund Investment Companies) may invest:
Up to 10% of their assets in the case of SIEFORE 2.
Up to 15% for SIEFORES 3, 4, and 5, in accordance with CONSAR rules (Order 15-19).
Additionally, some Mexican pension funds may invest up to 10% of their reserves in CBFIs issued by FIBRAs, in accordance with Article 188 of the Income Tax Law.
Mexico’s economic growth and stability in recent years have favored the development of the property rental market.
FIBRAs play a key role by:
Driving new real estate projects.
Providing liquidity to developers and investors.
Allowing for risk diversification within the sector.
In this way, FIBRAs have become an engine for the country’s real estate development and an accessible channel for institutional and individual investors to participate in the market.
A FIBRA listed on the Mexican Stock Exchange offers significant tax advantages:
Some investors are exempt from Income Tax, according to Mexican law.
Gains derived from secondary market transactions involving CBFIs (Certificados Bursátiles Fiduciarios Inmobiliarios) are also exempt for qualifying investors, including exempt entities and non-resident foreigners in Mexico.