There are two categories of real estate: urban ones and rural ones.
In general, there are no restrictions on a foreigner not resident in Brazil acquiring urban real
estate. On the other hand, the acquisition of rural real estate is subject to significant
restrictions for non-resident foreigners.
Countryside is sensitive in Brazil for several reasons. First, there is the Amazon, an immense
territory that attracts the envy of many countries in the world because of its natural wealth and
its importance for maintaining the ecological balance of the world. There are also the very
sensitive issues of the native peoples’ reserves and the country’s mineral wealth. Finally, there
is the history of Brazil, closely linked to large farms, the social and economic foundation of
the country. While in the United States a major policy of land redistribution was put in place
in the nineteenth century (cf. the 1992 film “Far and away”), Brazilians, at the same time,
locked access to land by both former slaves and new immigrants. It was a question of
preserving the privileges of a very strongly rural ruling class.
Rurality is a matter of national security.
The conditions and limits for the acquisition of rural real estate apply to 3 (three)
categories of persons:
- (i) Foreign individuals, resident in Brazil;
- (ii) Foreign legal entities authorized to operate in Brazil (legal entities that
have not set up a subsidiary in Brazil, but only opened an office/establishment
there). - (iii) Brazilian legal entities controlled by non-residents.
The third category of persons must meet three cumulative conditions to be subject to
restrictions on the acquisition of rural land.
-
- (a) the foreign investor is an individual or a legal entity not
established in Brazil; and - (b) participates in any capacity in the shareholding of a Brazilian legal
entity; and - (c) such participation shall ensure that its holders have the power to
decide on the deliberations of the general meeting, to elect a majority
of the company’s directors, to direct the activities of the company and
to direct the operation of the company’s bodies.
- (a) the foreign investor is an individual or a legal entity not
Thus, if foreign investors create a company in Brazil, of which they hold 100% (one
hundred percent) of the registered capital, but whose controlling ones have obtained a
residence visa in Brazil, then the company will not be subject to the acquisition
restrictions imposed on foreigners, and the company will be able to acquire any rural
land under the same conditions as any Brazilian.
READ ALSO:Foreign Capital Registration in Brazil
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