Purchase of land by foreigners in Brazil: rules and possibilities.

Many international investors are interested in purchasing land in Brazil. This is because foreigners seek to acquire rights to rural properties for the purposes of investment, production, exploration, and other activities. Therefore, it’s common a purchase of land by foreigners in Brazil.

However, the legislation that regulates land purchases is quite complex and requires careful planning. Several challenges must be overcome before a land purchase transaction is successful for the foreign investor.

In this text, we will see how the legislation works for the purchase of land in Brazil by foreigners what the main impediments are, and how to be able to buy a rural property. Check it out below.

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Brazilian Law: what is the purchasing Regulation

Law No. 5,709, of October 7, 1971, and Normative Instruction 88 of 2017 of the National Institute of Colonization and Agrarian Reform (INCRA) are the rules that regulate the purchase of rural properties by foreigners in Brazil.

They were drawn up with the aim of protecting national sovereignty and establishing requirements that must be met in order to purchase rural land by foreigners.

Which foreigner can buy land in Brazil?

In Brazil, the size of land that can be acquired by foreigners is defined by a type of measurement unit, the Indefinite Exploration Module (MEI). However, the MEI is determined by each region or municipality and, therefore, you must check the exact size of the MEI according to the location where the purchase will be made.

From this point on, each amount of MEI and type of foreigner will have its own rules for purchasing. This way, you can buy:

• Up to 3 MEIs: a foreign individual who has permanent residence authorization in the country without additional authorization to purchase land;
• More than 3 MEIs up to 50 MEIs: foreign individual with permanent residence permit in the country with specific authorization from INCRA;
• Without size restrictions and without additional authorization: foreign individual if married to a Brazilian under the community of property regime or has a Brazilian child.
• Under specific rules: legal entity (see below).

Furthermore, if the foreigner resides in the country, he or she can have rural properties in Brazil through legitimate succession, that is, through inheritance, as long as the property is not located in a border area.

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How can a foreign Legal Entity acquire land in Brazil?

A foreign legal entity that has authorization to operate in Brazil or a Brazilian legal entity with a foreign partner holding more than 50% of the company’s capital will always need authorization to purchase land.

In other words, regardless of the size of the land (the number of MEIs), the legal entity will need authorization from INCRA to purchase rural land. On the other hand, if the company has more than 100 MEIs, it must request authorization from the National Congress.

However, if the foreign partner has less than a 50% stake in the company, the legal entity may purchase the rural land without any restrictions.

National Security Restrictions for purchase of land by foreigners in Brazil

You need to know if the property is located in a border strip or area considered essential for national security. Therefore, if this is the case, the foreigner will need the consent of the National Defense Council.

Furthermore, the total rural area belonging to foreigners cannot exceed 25% of the size of the municipality in which it is located.

The law establishes that foreign legal entities (foreign companies authorized to operate in Brazil or that own more than 50% of the capital) may only acquire rural properties. These are intended for the implementation of agricultural, livestock, industrial, or colonization projects, linked to their objectives statutory.

The Ministry of Agriculture or the Ministry of Industry and Commerce will need to approve these projects.

Despite these challenges, land acquisition can also represent great opportunities for foreign investors.

Therefore, foreigners interested in purchasing rural properties in Brazil can benefit from hiring specialized legal services to deal with Brazilian laws that oversee the purchase of land in the country.

We recommend that foreigners seek a lawyer specializing in International Law. In other words, to guide them about Brazilian laws and to ensure that they follow the land acquisition process correctly.

Steps to prepare for the purchase of land by foreigners in Brazil

• Assess whether the land is in a border region or not;
• Find out the size of the MEI in the municipality you want to buy;
• Check if you are able to make the purchase, according to your situation and land size;
• Seek specialized guidance to navigate bureaucracy in Brazil;
• Validate with a professional if there are indeed no major restrictions.

We hope that with this information in mind, you can make a more qualified and safe purchase.