Are there any legal restrictions on foreign investors acquiring real estate?
The Angolan Constitution recognizes private property, however, it also sets forth that the ownership of land belongs to the state. The acquisition and use of land is mainly regulated by the Land Law (Law 9/04, of 9 November 2004), the Land Law Regulations (Decree 58/07, of 13 July 2007) and the Civil Code. Foreign investors due to restrictions to ownership tend to apply for the granting of one of the above-mentioned smaller land rights, the surface right is the most common due to the fact that it offers more security, since it can be granted for a period of 60 years and may be renewed.
Commonwealth legislation (the Foreign Acquisitions and Takeovers Act 1975 (FATA) and relevant regulations) operates to impose restrictions on foreign investors in relation to the acquisition of Australian land.
The Commonwealth’s stated approach to foreign investment policy is to encourage foreign investment consistent with Australia’s national interest. A key objective of the policy is to balance concerns about foreign ownership of Australian assets against the strong economic benefits to Australia that arise from foreign investment. The FATA regime is administered by the Federal Treasurer and the Foreign Investment Review Board (FIRB).
Proposals concerning acquisitions of an interest in Australian land by a foreign person require notification to, and approval by, FIRB if the value of the interest being acquired exceeds prescribed thresholds. In the case of vacant land and residential land (as well as acquisitions by foreign government), the threshold is zero and accordingly all acquisitions of such land or by such entity require approval by FIRB.
In Belgium there are no restrictions on foreign investors acquiring property.
Under Bosnia and Herzegovina's Act on Rights in Rem, foreigners can acquire real estate in the Federation of BiH and Republika Srpska, provided that there is reciprocity, save for the acquisition of real estate through inheritance if by law or international agreement not provided otherwise. It is assumed that the reciprocity exists. The Federal Ministry of Justice publishes a list of countries whit which there is no reciprocity, based on previous opinion of the Ministry Council of BiH.
A foreign investor can acquire real estate directly provided he obtains various administrative consents in advance.
There are no blanket prohibitions on foreign ownership of Canadian real estate, but some provinces have adopted additional property transfer taxes on the purchase of Canadian residential real estate by non-residents of Canada.
Additionally, the Canada Revenue Agency (CRA) requires purchasers of real estate from non-resident vendors to hold back a portion of the gross purchase price (typically 25% but can rise to 50% if the property generates rental income) and remit the same to the CRA unless the non-resident vendor obtains a ‘clearance certificate’ from the CRA verifying that the non-resident vendor has made arrangements for the payment of any resulting tax. Conversely, the non-resident vendor has an obligation to notify the CRA about the disposition either before it happens or not later than 10 days after the disposition.
Foreign entities that do not have any subsidiaries or representative offices in the PRC, or foreign individuals who do not satisfy prescribed conditions are not allowed to purchase any real property in the PRC directly.
If foreign entities or individuals intend to invest in real estate in the PRC, they can either:
Foreign entities or individuals are also subject to stringent requirements with regard to obtaining offshore finance. Debt funding to purchase land use or building ownership rights may not come from overseas.
The purchase of real estate assets by foreign investors (individuals or legal entities) other than EU residents is subject to reciprocity (ie it is permitted as long as Croatian citizens may acquire real estate in the investor's home country) and to written consent from the Ministry of Justice.
This procedure can be rather slow and complex. The applicant must enter into a preliminary purchase contract or a conditional purchase contract with the seller, then file an application with the Ministry of Justice, including any relevant documents relating to the buyer, an excerpt from the land registry, and confirmation from the cadastral office that the real estate is not in a restricted class, such as agricultural land or forest, but is classified as land for development or land that has already been developed. If the Ministry of Justice agrees that there are no obstacles to the proposed transaction, it will issue its consent. This process normally takes around a year, or even longer in some cases. This can be avoided if a foreign investor establishes a Croatian company.
However, under the Stabilisation and Association Treaty concluded between Croatia and the EU, Croatia assumed an obligation to make the acquisition of real estate in Croatia easier for EU residents. Accordingly, since 1 February 2009, EU residents have been allowed to acquire real estate in Croatia (apart from agricultural land and designated environmentally sensitive areas) without having to obtain prior approval from the Ministry of Justice.
There are no restrictions on foreign investors acquiring real estate.
On 1 May 2011 the seven year transitional period during which temporary restrictions applicable to agricultural land and forests ended and from this date European Union rules regarding the free movement of capital apply to real estate acquisitions in the Czech Republic.
Non-Danish companies and individuals need permission from the Danish Ministry of Justice to buy real estate in Denmark. Non-Danish companies can legally invest through a corporation which has its registered office in Denmark. The need for permission can easily be avoided by establishing a Danish subsidiary company.
Foreigners who have not been residents in Denmark for a period of five years or more may only purchase real property if they obtain a permission from the Danish Ministry of Justice. This rule also applies to companies, association, public or private institutions, foundations and foreign public authorities. However, if the purchaser is an EU citizen or an EU company, they may purchase real property if certain specific conditions are fulfilled, eg the real property must serve as an all-year round residence for the purchaser or must be necessary in order for a company to carry on an independent business or to provide public services.
There are no restrictions on foreigners investing in property located in France, whether directly, or indirectly through the purchase of a company holding real estate assets except for agricultural use properties that must be authorised by the local Prefect and sensitive activities (relating to public authority, public order, research, production and commercialization of weapons and explosive substances) that must be authorized by the Ministry of Economics. However, the sale or purchase of a property located in France for an amount exceeding €15 million by non-residents must be reported to the Banque de France for statistics purpose only.
In general, foreign investors are not subject to any restrictions other than those imposed on resident German investors.
However, the government has the power to impose a restriction on the acquisition of property in Germany by foreign corporate investors, requiring them to obtain a public permit, where German companies are subject to similar restrictions in the investor's own country. However, no such restrictions are currently in place and we are not aware of any intention to introduce them. In any event, these restrictions would not apply to investors from countries within the European Union.
The Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung – AWV) has been amended and its scope includes now company asset deals. According to Sec. 55 (1a) of the Foreign Trade and Payments Ordinance, the Federal Ministry of Economic Affairs and Energy can assess whether there will be a likely effect on the public order or security, for example, of the Federal Republic of Germany in case of the acquisition of a definable part of the operation of a domestic company (no. 1) or all the essential operating equipment of a domestic company or of a definable part of the operation of a domestic company which is needed to maintain the operation of the company or of a definable part of the operation (no. 2).
No. However, foreign investors are equally subject to stamp duty, Special Stamp Duty and in particular Buyer's Stamp Duty. Please refer to the ‘Taxes in Hong Kong’ section for more details.
In addition, the new guideline ‘Prudential Measures for Mortgage Loans on Non-residential Properties’ issued by the Hong Kong Monetary Authority on 19 August 2020 sets out the applicable loan-to-value ratio limits for non-residential property mortgage loans for non-local mortgage applicants (whose primary income is sourced mainly outside Hong Kong). Non-local mortgage applicants (without an outstanding mortgage) are subject to a limitation on the loan-to-value ratio of 40% for residential properties and 40% for commercial and industrial properties. For non-local mortgage applicants (with an outstanding mortgage), the limitation on the loan-to-value ratio is 30% for residential properties and 30% for commercial and industrial properties. Non-local purchasers (without an outstanding mortgage) securing mortgage loans based on net worth rather than income streams are subject to limitations on loan-to-value ratios of 40% regardless of property value for residential properties and 40% for commercial and industrial properties. Non-local purchasers (with an outstanding mortgage) securing mortgage loans based on net worth rather than income streams, they are subject to loan-to-value ratios of 30% for residential properties and 30% for commercial and industrial properties.
There are certain restrictions on the acquisition of arable land by foreigners and a prohibition on its acquisition by legal entities, whether foreign or domestic.
In addition, non-EEA citizens and 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 carrying 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 the purchase of real estate assets by foreign investors, provided that the principle of reciprocity is 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.
There are no discrepancies between the legal restrictions applicable to foreign investors and those applicable to domestic investors other than the followings.
Under the Foreign Exchange and Foreign Trade Act, a foreign (non-Japan resident) investor who purchases real estate from a Japan resident seller for profit must report the purchase to the Bank of Japan within 20 days of the purchase.
A new law restricting investment in certain real estate in Japan which is important in terms of the national security will be fully effective in September 2022. Under the new law, the authority may designate certain areas that need to be monitored for national security purposes as ‘Monitored Areas’ (chushi-kuiki) or ‘Special Monitored Areas’ (tokubetsu-chushi-kuiki). If real estate is located in the Monitored Areas, the authority may (i) investigate the use status of such real estate, (ii) require the relevant local authority to provide information relating to such real estate (eg the names of the user, and the like (User, etc.) of such real estate), (iii) require the User, etc, to provide reports and materials with regard to the use of such real estate and (iv) if there is an apparent potential for such real estate being used to interfere with the functions of defence facilities, remote islands (such as to define any border of Japan), or the like, prohibit the use of such real estate or order other necessary measures. If real estate is located in the Special Monitored Areas, in addition to the authority’s rights relating to the Monitored Areas above, any investor intending to acquire such real estate is required to prior to the acquisition, notify the authority of its name and address, the purpose of the acquisition and any other matters specified in the relevant ordinances.
Generally, all lands are vested in State Governors who hold and administer same in trust for the use and benefit of all Nigerians citizens, however, the present state of the Nigerian law is that, a foreign investor can acquire real property in Nigeria through a company or other corporate entities duly incorporated under the laws of the Federal Republic of Nigeria. Section 17 of the Nigerian Investment Promotion Act, 1995 also provides that a non-Nigerian may invest and participate in the operation of any enterprise in Nigeria. Any company that is empowered by any law to acquire land in Nigeria can do so like a citizen whether it is owned by a foreign investor or a Nigerian.
Section 22 of the Land Use Act provides that it shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease without the consent of the Governor, a provision which applies to foreign investors and Nigerians alike.
There are no specific restrictions on foreigners investing directly in real estate in Norway. Everyone of whatever nationality, intending to buy Norwegian real estate must apply for a concession from the local authority, but this formal requirement needed to obtain title in the Land Register very rarely constitutes a problem for investors.
There are also broad exemptions from this requirement, including:
The Act on the acquisition of Real Property by Foreigners dictates that the purchase of real estate 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 if no objection is made by the Minister of Defence or – with respect to agricultural real estate – by the Minister of Agriculture and Rural Development. Any breach of this obligation will render a transaction null and void.
These rules apply equally to rights of perpetual usufruct.
However, since Poland's accession to the European Union, foreigners from the European Economic Area or Switzerland are not obliged to obtain such a permission, save in relation to the purchase of agricultural or forest land, where a permission was required until 1 May 2016.
Since 30 April 2016 a law is in force, fundamentally changing the rules of trade in private and public agricultural properties, applying also to foreign investors.
This law introduces, subject to a few exceptions, a prohibition on selling real properties composing Resource of the Agricultural Property of the State Treasury Agricultural (Zasób Własności Rolnej Skarbu Państwa) being at the disposal of the Agricultural Property Agency (Agencja Nieruchomości Rolnych) (which was replaced on 1 September 2017 by the National Agricultural Support Centre (Krajowy Ośrodek Wsparcia Rolnictwa)) for five years following entering into force of the said law. After this deadline the sale of such real properties will be permitted, as an exception, to a limited group of persons and in a form of limited tender.
Moreover, this law limits also the trade in the private agricultural properties. The law introduces a number of criteria a purchaser of the agricultural property should meet (individual farmers, congregations and religious associations). Entities which do not meet these criteria are obliged to obtain a consent of the Head of National Agricultural Support Centre. The area of the purchased agricultural land may not exceed 300 hectares. Such properties should be used as an agricultural holding and may not be disposed of for the next 5 years.
This law extends the pre-emption right of the National Agricultural Support Centre to any agricultural property and introduces a pre-emption right of the National Agricultural Support Centre in relation to the purchase of shares in a commercial company, which owns agricultural property and in case of the personal changes in a partnership, which owns agricultural property.
No, real estate property can be freely acquired by foreign investors.
Following Romania's accession to EU on 1 January 2007, individuals and companies within the EU or EEA (European Economic Area) who are resident in Romania are allowed to purchase land subject to the same conditions as Romanian individuals and companies. Non-resident EU or EEA individuals and companies are allowed to acquire land in Romania for the purpose of establishing a secondary residence or headquarters as of 1 January 2012. As of 1 January 2014, EU or EEA nationals and companies can acquire agricultural land or forests in Romania.
The citizens of a third-party state and the stateless persons residing in a third-party state, as well as the companies having the nationality of a third-party state can acquire agricultural lands located outside the city limits in the conditions regulated by international treaties, based on reciprocity.
Buildings may generally be owned by anyone, including foreign companies or individuals.
Foreign individuals and foreign legal entities are allowed to acquire ownership of real estate in the Slovak Republic including agricultural land and forest. However, there are some exceptions relating to the ownership of real estate where acquisition by foreigners is restricted by specific legislation. For example, Act No. 140/2014 Coll. on Acquisition of Ownership of Agricultural Land 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 Member 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.
In general, pursuant to Article 4 of the Slovak Constitution, mineral resources, caves, underground waters, natural healing sources and streams are the property of the Slovak Republic. With regard to the acquisition of property from municipalities or state authorities, a special regulation applies and additional conditions must be complied with. In addition, a special restriction applies in the case of culturally protected real estate. In such cases, the Slovak State has a pre-emption right on any sale of a building which has the status of a cultural monument. This pre-emption right of the State ceases to exist if the State is unable to match the offer received by the seller from a third party.
Slovak law stipulates that only the registered Public Sector Partners may be the acquirers or users of the property belonging to the:
The division of agricultural land into plots of less than 2,000 square metres, and forest into plots of less than 5,000 square metres, is restricted. However, dividing land into plots of less than 20,000 square metres but not less than 2,000 square metres, in the case of agricultural land, and 5,000 square metres, in the case of forest, means the owner must make certain additional payments, the amount depending on the total area of the land.
New legislation on foreign investment scrutiny is planned. The draft of the Act on foreign investment verification and amendment of certain acts is currently for discussions at the parliamentary level. Foreign investments will be screened upon request or ex officio by the Ministry of the Economy. Reason for screening is the protection of security and public order of the Slovak Republic.
The General Office for Trade and Investments (Dirección General de Comercio e Inversiones) must be notified of foreign investments in real estate if they are valued at more than €3,005,060.52 or originate from a tax haven.
Official forms DP2, D2A or D2B must be completed by the foreign investor where investing in real estate assets, further to legal resolution issued by the Dirección General de Comercio Internacional e Inversiones on 27 July 2016.
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.
There are no restrictions other than those that apply to national investors.
Yes. Unless specifically permitted by law, foreigners are not allowed to own land in Thailand. Foreigners, as defined by the Land Code, include Thai-registered companies where more than 49% of the capital is owned by foreigners or more than 50% of the number of shareholders are foreigners.
Foreigners may, however, acquire land to live on, for commerce, industry, agriculture, burial, public charity or religion subject to the conditions and procedures prescribed in ministerial regulations and with the permission of the Minister of the Interior. Also, foreigners who have made qualifying investments in Thailand of not less than THB 40 million may own up to one rai (1,600 square meters) of land for residential use, subject to the permission of the Minister of the Interior and the requirement under the Ministerial Regulations. Foreign land ownership exceptions exist under the Petroleum Act, the Investment Promotion Act and for businesses located in certain industrial estates, with respect to areas of land needed to carry on the relevant business.
Yes, foreign individuals or companies can only acquire property that is located in one of the investment areas of Abu Dhabi. In these areas foreigners can hold the following land interests:
In April 2019, a new law came into force allowing foreigners and GCC nationals to hold freehold interests (conferring ‘absolute’ ownership) within one of the investment areas.
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 free zone, only GCC citizens and companies wholly own by them may hold a freehold interest in land. There are no restrictions on foreigners purchasing other interests in freehold land, such as units and floors.
Yes: As a starting point, the right of ownership of property in Dubai is restricted to:
However, in 'designated areas' of Dubai, non-GCC nationals may acquire the following rights:
A usufruct is essentially a 'real' right to exploit land owned by another person and a musataha is a type of usufruct which includes the right to construct on the land.
There are numerous 'designated' areas in Dubai and the Ruler of Dubai has the authority to make such designation.
Yes. The UK has recently toughened its rules on foreign investment, in line with other major economies. There are two important and recent pieces of legislation which affect foreign investment.
The Economic Crime (Transparency and Enforcement) Act 2022 has become law but is not yet fully in force. It applies to all UK property. Once all provisions have commenced, the Act will (in broad, and simplified, terms):
unless it has first become a registered overseas entity. To become a registered overseas entity, the overseas entity must file information about itself, its managing officers and its beneficial owners on a new Register of Overseas Entities which will be established at Companies House. Failure to comply with the Act will be a criminal offence punishable by significant fines or, in some cases, imprisonment. Certain transitional provisions may apply. As this is a fast changing area of law, please contact your usual DLA Piper contact who can advise you on the latest position in relation to the Act.
Secondly, the National Security and Investment Act 2021 applies to transactions entered into from 12 November 2020. The Act introduces a mandatory and a voluntary notification regime for transactions which could affect national security, which relate to the acquisition of shares or assets and where a sensitive sector is involved (for example, defence). The legislation could also cover the acquisition of land which is, or is proximate to, a sensitive site, such as a government building or site of national critical infrastructure. However, little guidance has been given on the definitions of "proximate" or "sensitive". The regime will also cover foreign to foreign transactions with a UK element (such as an acquisition by one foreign investor of a data storage company in another country, if that company performs services which may impact on national security in the UK). Government approval would be required prior to completion of affected transactions and without it, the transaction would be void.
The purchase of real estate by foreign investors is not (as at July 2022) subject to restrictions. However, the Economic Crime (Transparency and Enforcement) Act 2022 makes provision for a new Register of Overseas Entities operated by Companies House in which overseas entities will be required to record information about themselves and their beneficial owners before acquiring or disposing of UK property interests. [The new Register is expected to be operational at some point in 2022.]
Ukrainian law allows foreigners to own real estate in Ukraine but there are a number of important restrictions that may apply. The Land Code of Ukraine prohibits foreigners, foreign companies and foreign countries from owning agricultural land in Ukraine. It also precludes foreign companies from purchasing plots of land other than:
These restrictions also apply to joint ventures, ie companies established under Ukrainian law with the participation of foreign investors and Ukrainian legal entities and/or individuals.
It should be noted that on 31 March 2020 the Law of Ukraine "On amending some legislative acts of Ukraine regarding conditions of the agricultural land circulation" was passed. The respective law allows foreigners to purchase and own agricultural land only subject to the consent provided by Ukrainian people in a national referendum.
A number of other limitations exist under the Land Code, especially with respect to agricultural land.
The procedure for the purchase of land by foreigners can be complicated. In order to purchase land in Ukraine, a foreign company must act either through a subsidiary or a permanent establishment with the right to carry on business activity in Ukraine. A municipal plot of land may be sold to a foreign company with the approval of the Ukrainian Cabinet. Land owned by the Ukrainian state may only be sold to a foreign company subject to approval by the Ukrainian Parliament.
The acquisition of land by Ukrainian subsidiaries of foreign companies is even more problematic because the relevant provisions are not properly drafted. On the one hand, there are clarifications of the State Agency for Land Resources and court decisions stating that the acquisition of plots of land by Ukrainian companies that are 100% foreign owned is not provided for by Ukrainian law. On the other hand, there are court decisions stating that such companies should be allowed to acquire non-agricultural land in Ukraine.
There are other restrictions on the sale and purchase of real estate as well as the disposal of certain types of land by other means.
There are no blanket prohibitions on foreign ownership of US real estate, but various US laws impose restrictions and requirements applicable to foreign investors in certain cases, including:
Other US laws can affect ownership by foreigners. Foreign investors should also keep in mind:
Section 71(2) of the Constitution of Zimbabwe, 2013 states that 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 an association with others.