On June 30, 2016 decree No. 820/2016 was published in the Official Gazette. This decree modifies decree No. 274/2012, which in turn regulates Law No. 26.737 which imposed restrictions and limits to the acquisition and ownership of rural lands in Argentina by foreign individuals and legal entities.
The decree is aimed to increase flexibility and to clarify certain issues which raised doubts and made the application of the regime difficult.
The main changes are as follows:
a legal entity shall be considered as foreign when foreign individuals or legal entities, whether directly or indirectly, represent the majority of the votes, regardless of their shareholding or interest held. For the purpose of this regime, except for evidence revealing otherwise, a legal entity shall be considered as foreign when a foreign person or entity – or more than one in case of joint control –holds 51% of the shareholding or interest. Complex interpretative issues derived from prior rules, which included different situations and shareholding percentages, are thus eliminated; the cases in which the modification (direct or indirect) of the shareholding or interest of a legal entity owning rural lands shall be notified to the National Registry of Rural Lands, are reduced and specified; the authorization certificate shall not be required in the following cases: modifications in the shareholding or interest of a legal entity owning rural lands (including transfer or a change of direct or indirect control); conveyance of rights in rem splitting the ownership (usufruct, surface right, right to use and habitation) and anthicresis, or transfer of said rights in rem; transfer of ownership of rural lands located at industrial zones, areas or parks; or transfer of ownership of rural lands by inheritance to foreign forced heirs; if, as a consequence of any of the modifications in point (c) (i) the legal limit of foreign ownership (section 10 of Law No. 26,737) is exceeded, this shall not lead to the nullity of the transfer, but owner or the controlling party shall have the obligation to adapt to the legal limit, by transferring equity interest, modifying the type of exploitation or disposing of the portion of rural...