segunda-feira, 19 de novembro de 2012

Brazil and Argentina have restricted land acquisition by foreigners

The end of 2001 has not been a good time for foreign investment regulation in Latin America.

As predicted many times, Brazil has finally issued rules that severely restricted the purchase of rural land by foreigners, foreign companies and Brazilian companies with a majority of foreign capital.

You may find the rules , in Portuguese, here.As I have mentioned before, the new rules are 
unconstitutional when they create distinction between Brazilian companies and Brazilian companies with a majority of foreign capital.

And, to what it is worth, the rules are extremely restrictive. To fulfill all the requirements needed for obtaining approval to acquire rural land,  it may take one or two years, being lucky.

However, as I have also mentioned before, the rules have a weak point: they do not prevent shareholder's agreements.

That is, a Brazilian company with 51% of capital in the hands of Brazilians, but in which the control power is in the hands of foreigners, is allowed to purchase as much land as it can.

I will write more about those agreements later.

Regarding Argentina, I will limit myself to reproducing the news (below).

So, what do you think of these recent changes?

Argentina approves law to curb foreign land ownership

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December 19th, 2011
Argentine politicians have approved a law restricting the amount of productive agricultural land foreigners can buy in a move to protect ownership from large financial institutions.

The Chamber of Deputies voted 153 in favour and 26 against the new bill which sets a cap of 1,000 hectares in key areas of the country and that no more than 15% of Argentina can be owned by foreigners.
Cristina Fernández de KirchnerThe legislation will go to the Senate later this week where president Cristina Fernández de Kirchner’s Justicialist Party have a majority.

Chamber of Deputies general law committee head Luis Cigogna, denied the iniative was xenophobic but said it seeked to reserve strategic and non-renewable land for Argentines.

The bill was one of the laws the president asked Congress to pass in her swearing in speech last week.
The new law makes an exception for foreigners who have married Argentines or have lived in the country as permanent residents for more than 10 years.

Americans Douglas Tompkins and Ted Turner, Britain’s Joe Lewis, owner of the Hard Rock Café, and Benetton Italian brothers are among large foreign land owners in the country.

The initiative was inspired by existing laws in Brazil, Canada, U.S., France and Italy that have strong restrictions on land acquisition by foreigners.

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