Argentina’s New President is changing the way foreigners can buy farmland
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Argentina continues to implement more business friendly policies
Yesterday, by decree, the Argentine Government amended the law for Rural Land ownership therefore softening the restrictions on the sale of land to foreigners which the Kirchner administration imposed in December 2011.
“This decree seeks to unlock investments from outside until we try to fund a new project,” a senior government official said. President Mauricio Macri wants to change the law that Cristina Fernandez put in place as soon as she took the second term in office, setting the 15% limit of all domain ownership or possession of rural land in the national, provincial territory, and municipal by foreigners . “This law is crazy. Foreigners make up only 6% of the land ownership.” explained the government official.
The government is already promoting a bill that seeks consensus with senators to not put limits on the purchase of land. “If foreign ownership reaches more than 15% possibly we can see if sales should be limited”, added the official.
As a first step, the government published yesterday the decree 820/2016, which introduces several changes and bears the signatures of the President, Cabinet Chief, Marcos Peña; Justice Minister Germán Garavano, and Interior Minister Rogelio Frigerio. It defines who is considered a foreign landholder; someone who holds “more than 51% of the capital share of a legal title”. This changes the standard of the previous Kirchnerismo initiative defined as someone who holds “greater than twenty-five percent (25%)”.
In addition, it draws attention to another central point of law sanctioned by the Kirchner administration whereby foreign owners cannot acquire more than 1,000 hectares each, or the equivalent in the core areas, the most productive, which are bounded in the north of Buenos Aires, the south-east of Cordoba and the south of Santa Fe.
The decree places pressure on the provinces who have the next 30 days to define these “equivalences” referring to the limits of hectares that are able to be purchased in each district. Otherwise, the resolution of the government warns that the Interministerial Council of Rural Land will “set the equivalence”.
This council will be comprised of the Ministers of Justice, Agricultural Industry, Interior, Environment and Defence, while each province will be represented by the respective ministers of agriculture in each district.
The government also decided that there will be no restrictions on those lands that are in “Industrial Zone”, “Industrial Area” or “Industrial Park”. The decree states that “the surface not be counted for the purposes of the limits” in the Law on Rural Land.
Therefore, industrial zones have no limit of 15% of the national, provincial or municipal territory; nor 1000 hectares in the core area, nor will they be affected by the article which states that “in no case” natural or legal “persons of the same foreign nationality may exceed thirty percent (30%) of the percentage assigned in the preceding article to foreign ownership or possession of rural land “.
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