A new regulation governing the authorization and concession for the acquisition and lease of rural properties by foreigners living in Brazil came into force as of September 3, 2013. The regulation also applies to the acquisition and lease of rural properties by foreign companies authorized to do business in Brazil.
The new regulation, Instrução Normativa N° 76/2013 (“Regulation N° 76/2013”) was issued by the Brazilian National Institute for Colonization and Land Reform (“INCRA”). According to INCRA’s president, Carlos Mário Guedes de Guedes, Regulation N° 76/2013 establishes a simpler and faster application procedure for the granting of authorization by INCRA.
One of the most significant changes under the regulation is the implementation of a computerized system to handle every phase of the application process.
Additionally, Regulation N° 76/2013 will expand INCRA’s ability to enhance communication between other state agencies that are essential to the application made by a foreigner or foreign company. For example, when there is an application related to the purchase of a rural area that will be used for tourism, the application will be able to be jointly processed with the Department of Tourism.
The expected effect of Regulation N° 76/2013 is not just simplifying the application process. It will also help the government gain a clearer understanding of the real estate activities being conducted in rural areas by foreigners and foreign companies.
The previous rules that must be complied with by a foreigner or foreign company when applying for a concession of acquisition or lease of rural property have not changed. The proposed revision to exempt Brazilian companies where foreigners or foreign companies hold the majority of the equity capital or administrative power never made it into the actual regulation.
Also, the size limits on the purchase or leasing of land have remained the same. An authorization from the Brazilian Congress is necessary when a foreigner or foreign company seeks to buy or lease a rural property larger than 50 modules.
