Are foreigners allowed to invest by directly purchasing a commercial real estate asset?
Although there are restrictions to the acquisition of real estate by foreigners, the Private Investment Law (Lei do Investimento Privado, Lei nº 10/18 de 26 de Junho) allows foreigners to invest in Angola via purchasing real estate assets when such acquisition is part of a private investment project.
Under current regulations, foreign individuals and companies are allowed to invest in commercial real estate assets in Argentina.
Yes, however the Foreign Acquisition and Takeovers Act 1975 (Cth) (FATA) sets out the requirements associated with foreign investment in Australia. The FATA regime is administered by the Federal Treasurer and the Foreign Investment Review Board (FIRB).
The Commonwealth's stated approach to foreign investment is to encourage it consistent with Australia's national interest. Proposals concerning acquisition of an interest in Australian land requires notification to, and approval by, FIRB if the value of the interest being acquired exceeds prescribed thresholds.
Any acquisition of commercial real estate by an agreement country investor (currently being a non-government entity from the USA, New Zealand, Chile, Japan, the Republic of Korea and China) will be subject to a threshold of AUD1,094 million. Acquisitions of such land by a foreign person which is not an agreement country investor or a foreign government will be subject to a AUD252 million threshold unless the land is characterized as ‘sensitive’ in which case an AUD55 million threshold will apply. These lower thresholds also apply to Australian special purpose vehicles established by agreement country investors for the purposes of making the investment.
An interest in Australian land includes acquisitions of an interest in a share in an Australian land corporation and a unit in an Australian land trust.
The above mentioned thresholds are indexed annually on 1 January.
In the case of vacant land and residential land (as well as acquisitions by foreign government entities), the threshold is zero and accordingly all acquisitions of such land or by such entities require approval by FIRB.
A foreign person includes:
Australian land is broadly defined and includes all agricultural land, commercial land, residential land and a mining tenement or production tenement situated in Australia.
Yes. There are no restrictions in Belgium on foreign investors making direct investments in property, irrespective of its intended use.
Foreign investors may invest in real estate in Bosnia and Herzegovina (BiH) by acquiring all or part of an existing local legal entity, or by establishing a new company in BiH. The rights of foreign individuals acquiring real estate in Bosnia and Herzegovina are regulated in different ways depending on the specific circumstances.
After acquiring an existing legal entity, a foreign investor becomes the owner of the real estate held by that company. A foreigner can own real estate in Bosnia and Herzegovina based on reciprocity with the foreigner's own country which is always presumed. The Ministry of Justice of Federation of Bosnia and Herzegovina issues a list of countries with whom Bosnia and Herzegovina does not have reciprocity related to the acquisition of real estate each year by 31 January at the latest. By establishing a new company, even where this is owned exclusively by a foreign individual or entity, foreign investors can acquire property in Bosnia and Herzegovina directly, without any restrictions since they will effectively acquire the same legal rights and obligations as any local BiH legal entity.
Occasionally there may be limits on foreign investors' rights to acquire real estate in certain parts of the territory of the FBiH, or they may require special written consent from the Ministry of Justice.
Although there are no specific restrictions in Brazilian law on the acquisition of urban real estate by foreigners, there are several restrictions imposed on the acquisition of rural properties by foreigners, whether individual or corporate entity, pursuant to Brazilian Federal Law No. 5.709/71, Brazilian Federal Law No. 8.629/93 and Brazilian Federal Law No. 6.634/79, requiring a detailed case-by-case analysis.
The response to this question is limited to commercial real estate that does not include a residential component. As of 1 January 2023 the federal government proclaimed in force the Prohibition on the Purchase of Residential Property by Non-Canadians. This prohibits foreigners (including Canadian entities such as companies with as little as 3% foreign ownership) from purchasing residential property until at least 31 December 2024. Residential property is defined to be a building with not more than three dwelling units and would exclude, for example, an apartment building with at least 4 units. However, residential property is defined to include land without a habitable dwelling that is zoned residential or mixed use. An acquisition of commercial real estate property with zoning that allows some residential use (even if there is no residential dwelling on the property), could still be caught by the two year ban on foreign acquisition.
At the federal level, the only other restrictions on foreign ownership are in the Investment Canada Act (“the Act”), and only apply to a foreign investor acquiring control of a Canadian business. Any transaction that triggers the relevant dollar threshold is subject to a pre-closing review where the Minister of Industry must be satisfied the transaction is “likely to be of net benefit to Canada.” The threshold amount depends on the nature of the entity purchasing the Canadian business. Some of the categories for review are described below.
In 2023, the review threshold for a WTO investor that directly acquires control of a Canadian business is CA$1.287 billion in enterprise value. The threshold level will be adjusted annually for growth in GDP.
In 2023, the review threshold for foreign state-owned enterprises that are WTO members is CA512 million in asset value.
The thresholds for investments by an investor who is not a “WTO investor” as defined in subsection 14(6) of the Act are CA$5 million in asset value for direct investments and CA$50 million in asset value for indirect transactions. These thresholds also apply to investments made by all non-Canadian investors to acquire control of a Canadian business that is a “cultural business” as described in the Act (generally any business that produces, distributes, or sells magazines, newspapers, video or music recordings, etc).
Finally, any investment of any size by a non-Canadian can be reviewed if the Minister believes it could injure national security.
British Columbia: 20 Additional Property Transfer Tax on Residential Properties in the Greater Vancouver Region, Capital Regional District, Fraser Valley, Central Okanagan and Nanaimo
There is an additional property transfer tax of 20% that foreign nationals, foreign corporations, and foreign taxable trustees pay in addition to the general property transfer tax on transfers of residential property in the Greater Vancouver Regional District, Capital Regional District, Fraser Valley, Central Okanagan and Nanaimo. By regulation, the tax can be applied to other areas in the province. There are no other foreign ownership restrictions in the province.
Ontario: A Non-Resident Speculation Tax in Metro Toronto
Following on the footsteps of Vancouver, Ontario imposed a tax of 25% of the fair market value of residential properties being transferred to non-residents. This tax came into effect on 5 May 2017. Unlike BC, this tax only applies to properties containing up to six units in a single title.
Alberta: No Foreign Buyer Can Own More Than 20 Acres of ‘Controlled Land’
Individuals who are not Canadian citizens or permanent residents, as well as foreign controlled corporations, cannot acquire interests in controlled land consisting of more than two parcels containing not more than 20 acres. “Controlled land” is land outside a city, town, or village. This restriction also applies to leases.
Saskatchewan: Non-Residents and Non-Canadian Owned Entities Cannot Own More Than 10 Acres of ‘Farm Land’
Non-residents of Canada and non-Canadian owned entities cannot own more than 10 acres of farm land. There are limited exceptions to this rule. This restriction covers all types of land interests, including leases. Under the regulations, “farm land” means real property that is situated outside a city, town, or village. It does not include land used for extracting, processing, storing, or transporting minerals or land used primarily for sand and gravel extraction.
Manitoba: Non-Canadians and Non-Canadian Owned Organizations Cannot Own More Than 40 Acres of ‘Farm Land’
Non-Canadian citizens, organizations at least partly owned by non-Canadians, and publicly traded companies and other organizations whose ownership is open to non-Canadians cannot own more than 40 acres of farm land unless an exemption is granted by the Manitoba Farm Industry Board. This restriction applies to most types of interests, including leases. “Farm land” means real property outside a city, town, village or hamlet that is reasonably capable of being used for farming. Like Saskatchewan, the Manitoba legislation exempts land used for the purpose of extracting, processing, storing, or transporting minerals.
Québec: Non-Quebec Residents Cannot Own More Than 4 Hectares (10 acres) of Land
Non-residents of Québec and non-Québec resident entities are not allowed to acquire more than 4 hectares of land below the 50th parallel or in a zone designated as an agricultural zone except with the authorization of the Commission de protection du territoire agricole du Québec. “Farm land” is defined as any land used for agricultural purposes having an area of at least four hectares. This restriction applies to leases as well.
Prince-Edward Island: Non-Residents Cannot Own More Than 5 Acres and Cannot Have a Shore Front of More Than 165 Feet
Non-residents of PEI as well as corporations cannot own land in excess of 5 acres and cannot have a shore front of more than 165 feet. This restriction applies to all land and most types of interests, including leases. The restriction applies to all corporations as opposed to only foreign-owned ones.
Foreigners are prohibited from directly purchasing real estate that is not for self-use.
Foreign investors may acquire real estate in the PRC if it is for their own use and the investor has had a presence in the PRC (or in the case of an individual, has worked or studied in the PRC) for at least one year.
For real estate acquisitions that are not for self-use, foreign investors must establish a Foreign Invested Enterprise (FIE), specifically set up for the proposed investment project.
Yes, Colombia has the same investment treatment for nationals and foreigners. However, foreigners must have a valid passport and sufficient funds to make their investments. It is highly recommended that all investors get legal advice to determine the level of compliance with real estate regulations.
Investors wishing to invest in real estate in Croatia can structure their acquisition through a direct acquisition of the real estate or an indirect acquisition via a Croatian corporation.
Since 1 February 2009, EU residents have been allowed to acquire real estate in Croatia, other than agricultural land and designated environmentally sensitive areas, without having to obtain prior approval from the Ministry of Justice. The direct acquisition of real estate assets by non-EU residents is subject to reciprocity (ie it is permitted provided Croatian citizens are allowed to acquire real estate in the investor's home country) and requires written consent from the Ministry of Justice. Agricultural land and forests cannot normally be acquired by foreigners, unless an international agreement provides otherwise.
There are several possible routes for real estate investment in the Czech Republic, including direct acquisition of real estate (an asset deal), an indirect acquisition via a corporation (share deal), an acquisition via a partnership, and a purchase of an enterprise or its branch office. No specific conditions for organisations or companies apply to investment in real estate.
The previous temporary restrictions which were a derogation from the applicable European Union rules regarding the free movement of capital have already expired and do not apply.
It should also be noted that a Czech corporate entity based in the Czech Republic which is established and controlled by a non-Czech entity is not subject to restrictions when acquiring real estate in the Czech Republic. The acquisition of real estate, including agricultural land, through the establishment of such a company is common practice among non-EU investors.
In 2022, the member states of the European Union (including Czech Republic) has established certain restrictions with respect to business, transactions, free movement, investments etc. in relation to the Russian Federation and several individuals due to invasion of Russia to Ukraine.
Foreigners need permission from the Minister of Justice to purchase real estate assets used for commercial purposes in Denmark, unless investing through a corporation which has its registered office in Denmark. The need for a permit can easily be avoided by establishing a Danish subsidiary company.
The need for a permit does not apply to corporations registered in EU member states, as long as the purpose of purchasing the real estate is business related.
In France, direct investment in real estate can be carried out without ownership of a company registered in France.
In general, there are no limits on the acquisition of property by foreign investors over and above those imposed on resident German investors. Where investors are from countries outside the European Union, the German government would be entitled to promote statutory law requiring foreign corporate investors to obtain a public permit to acquire real estate in cases where German companies are subject to similar restrictions in the investor’s country of origin. Currently, however, such law does not exist and we are not aware of any intent to enact it. However, if a legal entity with its statutory seat outside of Germany intends to acquire real estate in Germany, such legal entity needs to register in the German transparency register (Transparenzregister), disclosing its ultimate beneficial ower (UBO) within the meaning of German law. No German real estate transaction can even be signed prior to such registration. The UBO-requirements are very detailed and subject to individual review. Generally, a natural person holding more than 25% of the shares or voting rights or exercising control in a comparable manner in a legal entity or, if another legal entity holds more than 25% of the capital or voting rights of a legal entity (or exercises control in a comparable manner), the natural person who can exercise decisive influence on the ‘parent entity’ is considered a UBO. In case there is no UBO within the meaning of German law, management of the legal entity is considered as fictitious UBO and needs to be registered in the transparency register.
Yes. There are, however, certain restrictions on the acquisition of arable land by foreign citizens and a prohibition on its acquisition by legal entities, whether foreign or domestic.
In addition, non-EEA citizens or legal entities may acquire real estate only with the consent of the relevant administrative office.
On the basis of the laws introduced due to the COVID-19 pandemic, in certain cases the acquisition of real estate assets critical to carry out the activities of certain strategic sectors with an ownership structure involving directly or indirectly certain foreign elements may require a notification to and acknowledgement by the competent Hungarian ministry.
There are no restrictions on foreigners investing in real estate in Italy. However, where an investment is by way of the purchase of shares in a corporate vehicle then there are certain restrictions that may be imposed by the Foreign Ministry (Ministero degli Affari Esteri). In any case the principle of reciprocity shall be met. There is no reciprocity when a foreign country places restrictions on an Italian investor who wants to establish a company in that country, since in such cases Italy applies the same limitations to the foreign citizen of that country, or to the foreign company of that country that wishes to invest in Italy. The check about the existence of treatment reciprocity shall not be carried out towards citizens of those countries with which Italy has concluded Bilateral Investment Treaties (BITs), for the matters covered by such treaties.
The issuance of a tax code may be necessary for physical persons with foreign citizenship and intending to set up a legal entity. The tax code will also be necessary if the person becomes a director of an Italian legal entity.
In general, there are no restrictions applying to foreigners in particular.
Foreign investment in New Zealand commercial real estate assets is governed by the Overseas Investment Act 2005 (Act) and the Overseas Investment Regulations 2005. This regime is administered by the Overseas Investment Office (OIO).
Regarding land assets, the regime creates a consent system whereby areas deemed “sensitive land” require OIO approval when being purchased by an “overseas person.” Overseas persons may acquire commercial real estate assets in New Zealand if the land is deemed not to be sensitive land for the purposes of the Act.
The Act defines an overseas person as:
While the Act provides a comprehensive list of what constitutes sensitive land, land is always sensitive if it is residential, or lifestyle and may be otherwise sensitive depending on its size and type or what it is next to. For example, non-urban land of 5 hectares or more requires consent from the OIO. Additionally, land that abuts a marine and costal area or the bed of a lake may also be deemed sensitive depending on its size.
The regime also extends to overseas persons acquiring indirect interests in sensitive land. Where an overseas person acquires shares or securities in an entity owning sensitive land in New Zealand, the consent requirement is triggered. The regime also applies to leasehold interests in sensitive land where the lease is for a term greater than three years (including renewals).
Obtaining OIO consent involves making an application that demonstrates the overseas person or persons intending to obtain an interest in the sensitive land is of good character and satisfies the investor test. The investor test sets out several character and capability factors intended to determine whether an overseas investor is likely to pose a risk to New Zealand. Satisfaction of any one factor will usually result in OIO consent not being issued.
In all instances, we suggest overseas persons seek advice from the New Zealand corporate team if considering acquiring any type of land or other asset in New Zealand, including commercial real estate assets.
Generally, under Nigerian law, foreigners are not allowed to directly own landed property. However, a foreign investor may acquire real property in Nigeria through any company or entity registered in Nigeria. A company duly registered in Nigeria may acquire land in Nigeria like a Nigerian citizen, whether wholly owned by foreigners or not.
Furthermore, a foreign investor may also acquire real property in Nigeria by ensuring that it has obtained the prior approval of the State Governor and followed the required procedure for the application for approval to acquire any interest or right in land by a foreigner. Section 6 of the Acquisition of Alien Law empowers State Governors to lay down individual procedures for the acquisition of land by aliens in their States. It is important to note that there are certain restrictions to the above. For example, in the oil and gas sector, the government retains ownership of the mineral resources found in any land purchased in Nigeria.
In general, there are no specific restrictions applying to foreigners.
The Act on the Acquisition of Real Estate by Foreigners stipulates that the purchase of real estate including rights of perpetual usufruct by an entity considered to be foreign is conditional upon prior permission in the form of a decision issued by the Minister of Administration and Internal Affairs. Any breach of this obligation will render a transaction null and void.
However, since Poland's accession to the European Union, foreigners from the European Economic Area have not been required to obtain such a permission, except in relation to the purchase of agricultural or forest land, where a permission was required until 1 May 2016.
Where their home country allows reciprocal rights, foreign investors can establish branches in Poland to conduct business. Foreign investors from EU, EEA and EFTA member states can undertake commercial activity subject to the same regulations as Polish businesses.
Yes, foreigners are allowed to invest in Portugal by directly purchasing any real estate asset.
At present, foreign entities and individuals are allowed to own land in Romania, provided that certain conditions are fulfilled. A preferential regime applies to EU or EEA (European Economic Area) nationals and EU or EEA based companies which are resident in Romania following Romania’s accession to the EU on 1 January 2007. Thus, resident EU or EEA nationals and companies are allowed to purchase land subject to the same conditions as Romanian nationals and companies. However, non-resident EU or EEA nationals and EU or EEA based companies are allowed to acquire land only for the purpose of establishing a secondary residence or headquarters here and only with effect from 1 January 2012.
EU or EEA nationals and EU or EEA based companies are allowed to acquire agricultural land or forest in Romania as from 1 January 2014.
Non-EU nationals and companies may acquire land in Romania, provided that there is an international treaty between Romania and the relevant state, and that reciprocal arrangements are in place. So far, no such treaties have been concluded by Romania with non-EU/EEA countries.
These restrictions do not apply to the ownership of buildings as opposed to land. Foreigners may also hold certain rights over land (such as the right of 'superficies' - the right to own a building and to use the underlying land).
The opportunities for foreigners to acquire real estate in the Slovak Republic used to be severely limited. Since the Slovak Republic joined the European Union (1 May 2004), these restrictions have been significantly liberalized. Foreigners can now acquire ownership of real estate located in Slovakia including agricultural land and forest.
The Foreign Exchange Act defines a 'foreigner' (cudzozemec) as a non-resident individual or legal entity.
However, there are some exceptions relating to the ownership of real estate whereby acquisition by foreigners is restricted by virtue of specific legislation (reciprocity principle). For example, legislation provides that the ownership of the agricultural land may not be acquired by a country, a citizen of a country, a natural person with residence or a legal entity with its registered seat in a country, whose legislation does not allow citizens of the Slovak Republic, natural persons with residence in the Slovak Republic or legal entities with their registered seats in the Slovak Republic to acquire ownership of agricultural land. This does not apply to inheritance and to the states of the European Union, the European Economic Area, Switzerland, or the states for which it follows from the international agreement by which the Slovak Republic is bound.
Act No. 497/2022 Coll. on Screening of Foreign Direct Investments entered into force as of 1 March 2023 which stipulates new mechanism for transactions from abroad to Slovak critical infrastructure entities (targets). The FDI Act applies to foreign investments, ie investments planned or implemented by a foreign investor that will enable the foreign investor to directly or indirectly acquire ownership right to use or dispose of the substantial assets of the target.
Yes, foreigners are allowed to invest in Spain by directly purchasing a real estate asset for commercial purposes. However, a foreign investment in real estate which is valued at more than €3,005,060.52, or which is made with funds which come from a tax haven, must be reported to the Investment Registry of the Spanish Ministry for the Economy and Competitiveness (Registro de Inversiones del Ministerio de Economía y Competitividad).
Official forms DP2, D2A or D2B must be completed by the foreign investor when investing in real estate assets, further to legal resolution issued by the Dirección General de Comercio Internacional e Inversiones on 27 July 2016.
Additionally, foreigners will be required to have a Spanish Tax Identification Number (NIF), when the investor is a legal person; or Foreigner Tax Identification Number (NIE), when it is a natural person.
Military authorization will be required, by virtue of the Decree 689/1978 of 10 February, for foreign investment by directly purchasing a commercial real estate asset in the following territories:
For these territories, certain quotas for total foreign investment have been established.
Foreign ownership of land in Thailand is generally prohibited. Buildings and other structures located on the land could be owned by a foreigner with separate title registration. Moreover, a foreigner is allowed to directly own condominium units with an aggregate unit space of up to 49% of the total floor area of all units in a condominium building.
In addition, foreign-owned companies may be allowed to own land for their business if operated in an industrial estate zone and/or granted investment promotion by the Board of Investment.
Yes, but only where the real estate asset is located in one of the investment areas of Abu Dhabi. In these areas non-UAE nationals can hold the following land interests:
The Abu Dhabi Executive Council is permitted to designate certain individuals, companies and parties as having the same status as UAE nationals regarding land ownership in the Emirate. This has been done to date for two real estate development companies listed in Abu Dhabi Aldar Properties PJSC and Sorouh Properties PJSC, the two of which have since merged to form one company (being Aldar Properties PJSC). This designation enables these companies to own land interests throughout Abu Dhabi despite them having an element of foreign ownership.
In the Abu Dhabi Global Market financial free zone, only GCC citizens and companies wholly owned by them may hold a freehold interest in land. There are no such restrictions on buying other freehold interests in real estate, such as units and floors.
Yes, but the law provides that natural or legal persons from non-GCC countries may only acquire the following interests, in specific areas designated for foreign ownership from time to time by the Ruler of Dubai:
The Gulf Cooperation Council (GCC) countries are the United Arab Emirates, Qatar, Kuwait, Oman, the Kingdom of Saudi Arabia and Bahrain.
GCC nationals are entitled to own land anywhere in Dubai.
Generally, a foreign investor may purchase a direct interest in commercial real estate, although it is advisable that, for liability protection purposes, an interest in commercial real estate be held through a legal entity. Moreover, lenders may require that a foreign investor hold its interest through a legal entity. In certain circumstances a federal statutory requirement to file a national security clearance process overseen by the US federal government body known as the Committee on Foreign Investment in the United States (CFIUS) may be required.
There are no restrictions on foreign investors directly purchasing real estate. In terms of section 71 (2) of Constitution of Zimbabwe Amendment (No. 20) Act of 2013, “…every person has a right, in any part of Zimbabwe, to acquire, hold, occupy, use, transfer, hypothecate, lease or dispose of all forms of property, either individually or in association with others.” Foreigners may invest by directly purchasing a commercial estate asset or may do so through corporate vehicles.