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1. The Foreign Investment Law38C H A P T E R I IIn order to present a basic panorama of the rules applicable to all foreigners who wishto invest in Mexico, in this chapter we will first discuss the rules set forth in the LIE inregard to the acquisition of real estate in Mexico and the trusts through which foreignindividuals and entities can acquire the use and benefits of real estate located in therestricted zone alluded to in section I of Article 27 of the Mexican Constitution.We will also examine the rules applicable to both foreign investment in Mexican companiesand the investment of foreign entities, alluding expressly to the requirements withwhich they must comply in order to engage routinely in business in Mexico.Finally, reference is made to the National Foreign Investment Registry (Registro Nacionalde Inversiones Extranjeras, RNIE), particularly the obligations applicable to Mexicancompanies having foreign or neutral investments, foreign individuals or entities that routinelydo business in the Mexican Republic, and the trusts by virtue of which rights aregranted to foreign investment. The economic activities that are subject to restriction pursuantto the rules set forth in the LIE will be analyzed in a special section because of therelevance of this topic for foreign investors.1.1. Acquisition of Real Estate1.1.1. Acquisition of real estate by foreign individuals or entitiesThe right of foreigners, whether individuals or entities, to acquire real estate in Mexicanterritory depends on the location of such real estate:a) Restricted zone. Real estate located within the so-called restricted zone, which is a62-mile strip along the borders and a 31-mile strip along the beaches of Mexico,cannot be directly owned by foreigners under any circumstances.However, foreigners can acquire rights to the use and benefits of real estate locatedwithin the restricted zone through a trust with the permission of the ForeignRelations Ministry (Secretaría de Relaciones Exteriores, SRE). In this case, it is the creditinstitution that, as fiduciary, acquires rights over the real estate; the foreigner, asbeneficiary, has the right of use and enjoyment thereof, including any fruits or productsobtained and, in general, any proceeds resulting from any profit-yielding operationor exploitation, through third parties or the fiduciary institution. The durationof these types of trusts is 50 years, which may be extended with the authorization ofthe SRE;b) Unrestricted zone. Real estate located outside of the restricted zone can be directlyacquired by foreigners, whether individuals or entities, provided that (1) prior tothe acquisition a writ is presented to the SRE in which the foreigner agrees to beconsidered a Mexican national with respect to such property and not to invoke the