In La Antigua and Guatemala City land can be owned by foreigners, but what about the beaches, rivers and Atitlan?

Invariably, the first and most important question that foreigners ask when considering the purchase of Real Estate is, “Can foreigners own Real Estate in Guatemala?”

The short answered is “Yes. No. And then Yes again, but with a twist.” The constitution permits foreigners to own real property in Guatemala without restriction and to enjoy the same property ownership rights as Guatemalans without distinction as to nationality, with one important exception. That exception is clearly stated in Guatemala’s Constitution, ratified in 1986:

Article 122:

Territorial Reserves of the State: The State reserves dominion over a strip of three kilometers along the oceans told from the top line of the tides; of two hundred meters about the shores of the lakes; of hundred meters to every side of the banks of the navigable rivers; of fifty meters about the sources and springs where the waters are born that supply the populations. 

Exceptions to the specifically reserve dominion:

The real estate placed in urban zones; and the real estate on which there exist rights inscribed in the Record of the Property, before March of 1956. 
Foreigners must have authorization of the executive, to acquire in property, real estate understood in the exceptions of the two previous interjections. When it is a question of properties declared as national monument or when they are located in monumental sets, the State will have preferential right in all alienation.

Article 123:

Limitations on the border buffers: Only the Guatemalans of origin, or the societies whose members have the same qualities, will be able to be owners or holders of real estate placed in the strip of fifteen kilometers wide along the borders, measured from the dividing line. The urban properties and the rights are exempted inscribed prior to the first of March of 1956. 

The Constitution is unequivocal, rigid and absolute in barring foreigners from owning waterfront (river, lake or ocean), border or spring-side property. As a practical matter the executive has never with one exception, waived its dominion and permitted foreign ownership of waterfront property. As a matter of historical interest that exception is a single property on the shores of Lake Atitlan, granted in perpetuity to Sam Green, an American. Green founded the Penny Foundation arguably the worlds first micro credit institution in the 1950s and in gratitude , the state granted him and his heirs’ title to the first promontory on Lake Atitlan on the right hand side of the boat from Panajachel to Santa Cruz.

THE LOOPHOLE

Short of establishing a foundation, there is a way for foreigners interested in owning waterfront property to rest easy at night.

Guatemalan law considers a Guatemalan corporation to be a Guatemalan and many attorneys tell would – be or actual owners of “reserve dominion” property to establish a corporation to hold the property. The law does not care about the nationality of the shareholders, and as a matter of further interest, the tax advantages may be considerable and will be dealt with in a future column. Established just last year as part of a national competitiveness program Guatemala’s “one-stop” window has made the creation of a corporation quicker and cheaper than ever.

What about if you own waterfront property in your own name? You probably can, since there is no known case of application of the anti-foreigner ownership clause. But to sleep really soundly, consider the corporate avenue. Even with a corporate shield, certain types of titles are cause of concern, and these to will be dealt with in a future column.