Wednesday, August 25, 2010
Purchase of land by foreigners back to have restrictions.
-Opinion AGU restores restrictions under the 5709 Act, 1971
“Advocate General of the Union, Luis Inacio Adams, said the government does not fear the decline of foreign investment in Brazil.”
The government yesterday reinstated the restrictions provided by law for the purchase of land in Brazil by Brazilian companies controlled by foreigners. The opinion of the Attorney General's Office, published yesterday in the Official Gazette, restores the restrictions under the 5709 Act, 1971.
The new text changes the understanding of the body itself. In 1994, the AGU has established the understanding that the law was not approved by the 1988 Constitution. Therefore, there would be restrictions on land purchases by Brazilian companies controlled by foreigners. Because of this lack of limitations, there is now a safe control in the country to gauge what is the extent of land in the hands of foreigners.
Besides the new understanding of the AGU, the government argues sending a bill to Congress to extend the restrictions on purchasing land in Brazil, including foreign individuals residing in Brazil, a situation not embraced by the opinion of the Attorney-General Union
The discussion in the government over the imposition of restrictions on land purchases by these companies began in June 2007. In September 2008, the new opinion was ready and depended only on approval of President Luiz Inacio Lula da Silva. Due to the international financial crisis broke out that year, the government preferred to wait.
Advocate General of the Union, Luis Inacio Adams, said the government does not fear the decline of foreign investments in Brazil. Partly because, he said, just that companies needs to adapt to the new reality to continue buying land. To do so may, for example, is be associated with national companies. "There are legal instruments able to give a solution to these situations," he said. "But the Constitution establishes that the control over the lands will be prioritized for nationals," he added.
The law provides that companies can buy up to 5000 hectares of land, never exceeding 25% of the municipal area in which the farm is located. If the property is in an area of national security, the buyer will require the prior approval of the Council of National Defense. In addition, the Registry Offices of Real Estate will retain special registration for land purchased by Brazilian companies controlled by foreigners.
(By State Agency)