New Rules On Lease Of Rural Lands To Foreigners

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This initiative adds to previous efforts initiated in 2010 by the Brazilian government to restrict the acquisition of rural land by foreign investors in Brazil.
Brazil Real Estate and Construction

The Brazilian body responsible for regulating, on a federal level, the activities of Public Notaries and Public Registries, has issued a new ruling affecting the lease of rural lands to foreigners and to Brazilian companies owned by foreigners.

This initiative adds to previous efforts initiated in 2010 by the Brazilian government to restrict the acquisition of rural land by foreign investors in Brazil. This is the first time, however, that a specific ruling details the application of restrictions on the lease of rural land (aiming to regulate a Federal Law of 1993 that deals with rural lease agreements involving foreigners).

According to the new rules, lease agreements of rural properties will have to be executed in the form of a public deed by a Public Notary. As a condition for the execution of the public deed, the parties will have to present to the Public Notary a previous authorization from the Brazilian National Institute of Land Settlement and Agrarian Reform (INCRA), in the same manner already required for the acquisition of rural areas by foreigners or Brazilian companies owned by foreigners. These authorizations will be valid for 30 days, within which period the public deed of lease will have to be executed.

Like the ongoing debate relating to the acquisition of rural areas by foreign investors, which is still under analysis of the Brazilian Supreme Court, this new development also raises a number of doubts and interpretations.

Just as an example, it is still not clear whether State Public Registries will automatically apply the new ruling (which was issued on a federal level), or if they will wait for State authorities to issue their own rules.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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