Argentina's Parliament Approves A Measure Limiting Amount Of Land That Can Be Purchased By Foreigners

Fluctuating commodity prices, particularly with respect to the price of food and basic staples, have created a significant demand for arable land. The demand for arable land has, in turn, boosted the price Argentina's rural land and caused a flurry of foreign investment. In response to acquisition of land by foreigners, Argentina recently passed a law that imposes several restrictions on the foreign ownership of rural lands.

On December 22, 2011, Argentina's parliament approved a law limiting the amount of rural land foreigners can purchase in Argentina (the "Law"). Parliament established the "Consejo Interministerial de Tierras Rurales" (roughly, the Ministerial Council of Rural Lands) to implement the Law. "Rural land" is defined as all land that is outside of an urban area. An "urban area" is any an area with 2000 or more inhabitants. Under this definition, most of Argentina's land mass will be classified as rural land. Total foreign ownership of rural land cannot exceed 15% of Argentina's total land mass. No more than 15% of the 30% (e.g. 4.5% of Argentina's total land mass) can be acquired by persons and/or entities of the same nationality. Any particular individual or entity is limited to no more than 1000 hectares (24,710 acres) of rural land.

The Law will not be applied retroactively and does not affect existing foreign landowners. The acquisition of land in certain areas designated as "security areas" (near Argentina's borders) will require an additional approval by Argentina's Ministry of the Interior.

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Published In: General Business Updates, Finance & Banking Updates, International Trade Updates, Commercial Real Estate Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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