March 15, 2024 (Fort Lauderdale, Fla.) - On July 1, 2023, a new Florida law (Senate Bill 264) went into effect, restricting foreign investment in Florida real estate from specific countries, and enacting a near-ban on property purchases by Chinese, Russian and other foreign nationals.
Senate Bill 264, titled "Interests of Foreign Countries," prohibits Chinese nationals and nationals from other countries, including Russia, from buying land unless they are American citizens or permanent residents. In addition to Florida, over 20 other states currently have laws restricting foreign private investment in real estate, including primarily agricultural land.
This update builds on a May 19, 2023, Lewis Brisbois publication analyzing Florida's new law restricting foreign citizens from buying land in in that state and a July 5, 2023, Lewis Brisbois publication discussing a lawsuit challenging the new Florida law.
Currently, states that have introduced or passed laws restricting foreign private investment in agricultural land include:
- Mississippi House Bill 280, signed by the Governor in May 2023,
prohibits foreign governments from purchasing, acquiring, leasing,
or holding any interest in agricultural land in the state.
Mississippi Agricultural Land Protection and Foreign Acquisition Prohibition Act (H.B. 348) – Failed - MISSISSIPPI
H.B. 280 – Enacted
- Subdivision 2 of Minnesota Statute 500.221 prohibits any
natural person from acquiring, either directly or indirectly, any
interest in agricultural land unless they are a citizen or
permanent resident of the US. It also expressly prohibits
corporations, partnerships, trustees and other business entities
from acquiring or otherwise obtaining an interest (whether legal,
beneficial or otherwise) in any title to agricultural land unless
at least 80% of each class of stock issued and outstanding or 80%
of the ultimate beneficial interest of the entity is held directly
or indirectly by citizens of the US or permanent resident aliens.
The prohibition does not apply to agricultural land acquired by
devise, inheritance, as a security for indebtedness, or by process
of law, among other things.
- MINNESOTA
Minn. Stat. § 500.21 – Enacted
- "Person connected with a foreign adversary" means the
juridical person, as defined in Civil Code Article 24, in which the
foreign adversary has the power to direct or cause the direction of
the management or policies of the juridical person whether through
ownership of securities, by contract or otherwise. A person or
entity that directly or indirectly has the right to vote 50% or
more of the voting interests of an entity or is entitled to 50% or
more of its profits is presumed to have the power to direct or
cause the direction of the management or policies of the juridical
person.
- Foreign Adversary means an individual or government identified as a foreign adversary in 15 C.F.R. 7.4(a) and identified in the database by the Office of Foreign Assets Control.
- Louisiana prohibits foreign adversaries and persons connected with foreign adversaries from purchasing, leasing, or otherwise acquiring immovable property in the state on or after August 1, 2023. This section does not apply to immovable property purchased, leased, or otherwise acquired by a natural person that is used as a 1-to-4 family residential property.
- LOUISIANA
La. R.S. §9:2717.1 – Enacted
- Kentucky's House Bill 500, proposed in February 2023,
prohibits the purchase, lease, or acquisition of agricultural land
by Chinese, Russian, and other individuals associated with foreign
countries that have been deemed by the federal government to be a
threat to the U.S. The bill has since failed to pass.
- KENTUCKY
KY H.B. 500 – Failed
- Kansas Senate Bill 446, introduced on February 4, 2024,
prohibits any person owned by, controlled by or subject to the
jurisdiction or direction of a foreign government from acquiring
any interest in any parcel of real property that is 3 acres or
more. This prohibition applies prospectively to acquisitions after
July 1, 2024.
- KANSAS
KS S.B. 446 – Introduced
- Iowa prohibits a nonresident alien, foreign business or foreign
government, or an agent, trustee, or fiduciary thereof, from
purchasing or otherwise acquiring agricultural land in the state.
The restriction does not apply to agricultural land acquired by
devise or descent, encumbrances for the purposes of security, and
agricultural land acquired by process of law (i.e., the collection
of debts, lien enforcement, etc.)
- IOWA
Iowa Code §91.3 – Enacted
- Indiana prohibits foreign business entities from acquiring by
grant, purchase, devise, descent, or otherwise any agricultural
land within the state for the purpose of crop farming or timber
production after June 30, 2022. "Foreign business
entities" include any corporation, LLC, partnership, or the
like, that is organized under the laws of another country, as well
as their agents, trustees and fiduciaries.
- INDIANA
Burns Ind. Code Ann. § 32-22-3-4 – Enacted
- A "foreign principal" means (A) the government or any
official of the government of a foreign country of concern; (B) a
political party or member of a political party or any subdivision
of a political party in a foreign country of concern; (C) a
partnership, association, corporation, organization, or other
combination of persons organized under the laws or having its
principal place of business in a foreign country of concern, or a
subsidiary of such entity; or (D) any person who is domiciled in a
foreign country of concern and is not a citizen or lawful permanent
resident of the US; and (e) any person, entity, or collection of
persons or entities, described above, having a controlling interest
in a partnership, association, corporation, organization, trust, or
any other legal entity or subsidiary formed for the purpose of
owning real property in the state.
- A "foreign country of concern" means China, Russia, Iran, the Democratic People's Republic of Korea, Cuba, the Venezuelan regime of Nicolas Maduro, or the Syrian Arab Republic, including any agency of or any other entity of significant control of such foreign country of concern.
- In Florida, a foreign principal may not directly or indirectly own, have a controlling interest in, or acquire by purchase, grant, devise, or descent agricultural land or any interest, except a de minimis indirect interest, in such land in the state. This applies prospectively from July 1, 2023.
- FLORIDA
Fla. Stat. § 692.202 – Challenged
- In April of 2023, Arkansas codified SB 383, which prohibits
foreign parties from acquiring by grant, purchase, devise, descent
or otherwise, any interest in agricultural land regardless of
whether the prohibited foreign party intends to use the
agricultural land for nonfarming purposes. This prohibition extends
to those who hold agricultural land as an agent, trustee or other
fiduciary for a prohibited foreign party.
- ARKANSAS
A.C.A. § 18-11-803 – Enacted
- House Bill 348, introduced January 22, 2024, seeks to restrict
prohibited foreign parties from acquiring by grant, purchase,
devise, descent or otherwise, any interest in agricultural land in
Mississippi. Specifically, "prohibited foreign parties"
include citizens, residents or foreign governments of a country
subject to International Traffic in Arms Regulations (22 C.F.R.
126.1) and any party (other than an individual or government)
organized under the laws of any state in which a significant
interest or substantial control is held by certain individuals,
foreign governments or foreign entities. On March 5, 2024, the Bill
died in committee.
- MISSOURI
§442.571 R.S. Mo. – Enacted
- In Missouri, no alien or foreign business shall acquire by
grant, purchase, devise, descent or otherwise, agricultural land in
the state if the total aggregate alien and foreign ownership of
agricultural acreage in Missouri exceeds 1% of the total aggregate
agricultural acreage in the state.
- NEBRASKA
R.R.S. Neb. § 76-402 – Enacted
- Aliens and corporations not incorporated under the laws of the
State of Nebraska are prohibited from acquiring title to or taking
or holding any land, or real estate, or any leasehold interest
extending for a period of more than 5 years or any other greater
interest less than fee in any land, or real estate in Nebraska by
descent, devise, purchase or otherwise. The state allows for widows
and heirs of aliens who have acquired lands to hold such lands by
devise or descent for 10 years.
- NORTH DAKOTA
N.D. Cent. Code § 47-01-09 – Enacted
- In North Dakota, after July 1, 2023, no foreign adversary, foreign business entity with a principal office located in a country that is identified as a foreign adversary, or foreign business entity in which a foreign adversary owns more than 50% interest (or less than 50% and the foreign adversary directs the business operations) may purchase or otherwise acquire title to real property in the state.
- A foreign adversary means any individual or a government
identified as a foreign adversary in 15 C.F.R. 7.4(a) or a person
identified on the office of foreign assets control sanctions
list.
- OHIO
Ohio Rev. Code §5301.256 – Enacted
- In Ohio, on or after October 3, 2023, no person listed on the registry published by the secretary of state, and no agent, trustee or fiduciary of such person, shall purchase or otherwise acquire agricultural land in the state. This section does not apply to agricultural land acquired by devise or descent, but if a restricted person acquires agricultural land by devise or descent after the effective date, it must divest itself of all title within 2 years.
- The secretary of state periodically updates a registry of
persons that constitute a threat to the agricultural production of
the state or the U.S. The secretary will consult all of the
following in compiling such registry: (1) the list of persons
determined to be foreign adversaries by the secretary of commerce
of the U.S. under 15 C.F.R. 7.4; (2) the terrorist exclusion list
under 8 USC 1182; (3) the list of countries determined to have
repeatedly provided support for acts of international terrorism
under 10 USC 4813(c) and 22 USC 2780(d); and (4) the list of
individuals and entities designated by, or in accordance with EO
13224, issued by the President on September 23, 2021, or EO 13268,
issued by the President on July 2, 2002.
- OKLAHOMA
60 Okl. St. §121 – Enacted
- Oklahoma prohibits aliens or any person who is not a citizen of
the US from acquiring title to or owning land, either directly or
indirectly through a business entity or trust. The prohibition does
not apply to business entities engaged in regulated interstate
commerce in accordance with federal law.
- PENNSYLVANIA
68 P.S. §41 – Enacted
- In Pennsylvania, an alien, who is not a resident of the US, and
a foreign government shall not acquire an interest in agricultural
land, exceeding 100 acres, except such as may be acquired by devise
or inheritance, and such as may be held as security for
indebtedness.
- SOUTH CAROLINA
S.C. Code Ann. § 27-13-30 – Enacted
- No alien or corporation controlled by aliens, either in his
capacity as an individual or as trustee, shall own or control
within the limits of South Carolina, more than 500,000 acres of
land. Otherwise, aliens and foreign corporations are expressly
entitled to the same property as natural-born citizens.
- SOUTH DAKOTA
S.D. Codified Laws § 43-2A-2 – Enacted
- South Dakota prohibits aliens, who are not a resident of the
US, and foreign governments from acquiring agricultural lands, or
any interest therein, exceeding 160 acres, except as may be
acquired by devise or inheritance, and such as may be held as
security for indebtedness.
- TENNESSEE
Tenn. Code Ann. § 66-2-302 – Enacted
- Tennessee prohibits a sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, from purchasing or otherwise acquiring real property in the state if the country where the sanctioned nonresident alien resides, the sanctioned foreign business in located, or the official sanctioned government representing the country, or agents, trustees, or fiduciaries thereof, is on the office of foreign assets sanctions programs and country information list. This prohibition applies prospectively from July 1, 2023.
- A "Sanctioned Foreign Business" means (A) a corporation incorporated under the laws of a foreign country of a sanctioned foreign government; (B) A business entity in which a majority interest is directly or indirectly owned by sanctioned nonresident aliens; or (C) a corporation or business entity that is identified on the office of foreign assets control sanctions programs and country information list.
- A "Sanctioned Nonresident Alien" does not include (i)
a citizen of the US; or (ii) a person lawfully admitted into the US
for permanent residence, even if such status is conditional.
- TEXAS
S.B. 147 (2023) – Failed
- The Texas Senate proposed Senate Bill 147, which would prohibit governmental entities, certain corporate entities, and citizens of certain designated countries from purchasing or acquiring title to real property in the State. If it is determined that real property has been acquired in violation of this provision, the individual/entity will be divested of their interest in the property. The Bill failed in the House.
- A "Designated Country" means a country identified by
the United States Director of National Intelligence as a country
that poses a risk to the national security of the U.S. in each of
the 3 most recent annual threat assessments of the U.S.
Intelligence Community issued pursuant to Section 108B, National
Security Act of 1947.
- UTAH
Utah Code Ann. §63L-13-201 – Enacted
- In Utah, a restricted foreign entity may not acquire interest in land in the state. It does not apply to interests acquired before May 3, 2023 by purchase, grant, gift, devise, donation, or bequest; a security for the repayment of debt; or as a party to a contract for the transfer or conveyance of an interest in land to the restricted foreign entity.
- A "Restricted foreign entity" means (a) a company
that the US Secretary of Defense is required to identify and report
as a military company under Section 1260H of the William M.
Thornberry National Defense Authorization Act for Fiscal Year 2021;
(b) an affiliate, subsidiary, or holding company of a company
described above; (c) a country with a commercial or defense
industrial base of which a company described above is a part; (d) a
state, province, region, prefecture, subdivision, or municipality
of a country described in (c); and (e) an agency, bureau,
committee, or department of a country described in (c).
- VIRGINIA
VA S.B. 1438 (2022) – Enacted
- Virginia House Bill 1438, enacted April 12, 2023, states that no foreign adversary shall acquire any interest in agricultural land in the Commonwealth. Any such acquisition is considered void, and the title is deemed to have vested in the name of the Commonwealth, without any payment of consideration.
- "Foreign adversary" means any foreign government or
nongovernment person determined by the US Secretary of Commerce to
have engaged in a long-term pattern or serious instances of conduct
significantly adverse to the national security of the US as set
forth in 15 C.F.R. 7.4.
- WISCONSIN
Wis. Stat. § 710.02 – Enacted
- Wisconsin restricts the following persons from acquiring, owning or holding interest in more than 640 acres of land in the state: (a) aliens who are not residents of the US; (b) Corporations not created under the laws of any US state; and (c) Corporations, LLCs, partnerships or associations having more than 20% of their stock or securities held by persons described in (a) or (b) or trusts having more than 20% of the value of its assets held for the benefit of persons described in (a) or (b).
In light of the lawsuit challenging Florida's statute, the laws in the above-referenced 21 states call for closer scrutiny, as they will likely be challenged soon under the same precedents. All foreign owners and investors of residential, commercial or agricultural land in any transaction may want to monitor the pending litigation in Florida and the laws in the above-referenced states; in addition, as a precautionary measure, while these laws remain in force, it would be prudent to conduct a rigorous compliance check to ensure there is no violation of these existing laws or regulations.
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.