Are there any restrictions on who can own real estate?

Real Estate (2nd edition)

Cayman Islands Small Flag Cayman Islands

3.1 Generally speaking there are no restrictions on natural persons, trustees, incorporated bodies or unincorporated bodies (whether foreign or domestic) from becoming a registered proprietor of real property, although certain formalities may apply depending on the type of proprietor.

3.2 However, the carrying on of business from or in relation to real property may also require local business licensing. The ownership of one residential property for personal use and up to two further residential properties for rent will not generally be deemed to be carrying on business in the Cayman Islands, whereas the ownership of any commercial real estate will generally be deemed to be carrying on business in the Cayman Islands.

3.3 There are restrictions designed to protect local businesses against foreign investors proposing to carry on business in the Cayman Islands. Foreign investors in real estate development projects willing to persevere will often be granted the necessary licences if their investment is substantial.

France Small Flag France

There are no restrictions on who can own a real estate property per se except for the persons condemned for the violation of the legislation relating to housing conditions and which may be subject to a prohibition to purchase.

The sale of certain properties (especially those owned by the state or other kind of public entities) may, however, be subject to specific proceedings and controls by the French administration.

Germany Small Flag Germany

There are no specific restrictions – e.g. everybody can own real estate, persons, legal entities, closed-end and open-end property funds, public law bodies and foreign individuals and companies. Also minors and incapacitated persons are eligible to own real estate, however they are not granted the power of disposition.

Hong Kong Small Flag Hong Kong

Generally there are no legal restrictions as to who can own Hong Kong property.

Hungary Small Flag Hungary

1. Restriction of ownership of foreign entities and individuals

In general, the following parties may acquire real property without restrictions:

- citizens of the EU / EEA, legal entities, organisations without legal personality registered in the EU / EEA;

- individuals with dual citizenship (one of them being Hungarian citizenship), and citizens of Switzerland;

- individuals acquiring ownership by way of succession, regardless of citizenship;

- Hungarian branch offices of foreign enterprises registered outside the EU / EEA in case there is reciprocity between Hungary and such foreign country.

Acquisition of real property by other parties is subject to the approval of the territorially competent government bureau. The approval is granted if the acquisition of the real property does not constitute harm to local government or other public interests, or in case the foreign person wishes to live permanently and to pursue economic activity in Hungary, for which economic activity the acquisition of real property is required, and the acquisition of real property does not constitute an injury to public interests. Even if these conditions are met, the approval may be refused if the state of which the foreign person is a national does not provide equal treatment to Hungarian nationals under an international convention or reciprocity, except if the purpose of acquisition is to cease common ownership, or the foreign person has verifiably been residing and living in Hungary for a period of no less than five years, out of which the foreign person was employed for at least three years.

The above approval procedure does not apply to Hungarian companies established by foreign investors. Foreign persons may also opt for leasing real estate, which is not subject to the approval procedure.

2. Restriction of ownership of agricultural land

In general, only private individuals with Hungarian or other EU citizenship may acquire real properties qualifying as agricultural land. Furthermore, private individuals who do not qualify as farmers, may acquire agricultural land up to maximum one hectare. The acquisition limit of private individuals qualifying as farmers is 300 hectares. Notwithstanding the above, it is accepted by court practice for a legal entity to enter into a preliminary sale and purchase agreement with the seller promising to sell and the buyer promising to buy a real property once it is exempted from agricultural cultivation.

Agricultural land may be reclassified to an “exempted area” (i.e. area exempted from agricultural cultivation), in an administrative procedure by providing adequate justification for the reclassification. During the procedure a one-time land protection fee is required to be paid, the amount of which depends on the area in question, as well as on the quality of the agricultural land to be reclassified. Following reclassification industrial or commercial activity can be performed on the real property and the restrictions on the transfer of ownership no longer apply, i.e. the ownership of such land can be transferred to a legal entity.

Spain Small Flag Spain

No, save in the case of minors and incapacitated persons.

India Small Flag India

Persons resident outside India fall into the following three categories:

(i) non-resident Indians;

(ii) foreign nationals of Indian origin; and

(iii) foreign nationals of non-Indian origin.

(i) and (ii) can purchase or be gifted residential and commercial property (not agricultural land/plantation property/farm houses which may only be inherited by (i) and (ii)). (iii) cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India. (iii) can, however, acquire or transfer immovable property in India, on lease, for a period not exceeding 5 years.

A foreign company cannot acquire immovable property in India. However, a foreign company which has established a branch office in India may acquire immovable property in India which is necessary or incidental to its activity, subject to certain conditions. A foreign company which has established a liaison office in India cannot acquire immovable property in India, but can acquire property by way of lease, for a period not exceeding 5 years. A branch office is subject to taxation in India; a liaison office is not because it cannot earn revenue in India.

Foreign direct investment (“FDI”) into India is governed by the Consolidated FDI Policy. Investment can be made into an Indian company by subscribing to or acquiring instruments which are permitted, including equity shares, compulsorily convertible debentures, preference shares and certain other products available to foreign portfolio investors.

  • Foreign investment in any form is prohibited in any incorporated or unincorporated entity (including companies, partnership firms, proprietary concerns, trusts, etc.) which is engaged or proposes to engage in “real estate business”, construction of farm houses and/or trading in transferable development rights. “Real estate business” means dealing in land and immovable property with a view to earning profit or income. It does not include the “development of townships, construction of residential/commercial premises, roads or bridges, educational institutions, recreational facilities, city and regional level infrastructure, townships”. It also excludes Real Estate Investment Trusts (“REITs”) registered and regulated under the SEBI (REITs) Regulations 2014. Earning of rent or income through leasing of property, which does not amount to a transfer, is also excluded from the scope of “real estate business”.
  • The Consolidated FDI Policy currently permits up to 100% investment, in resident entities engaged in “Construction-development” projects, under the “Automatic Route”. “Automatic Route” means that prior approval of the government is not required for investment by non-resident entities in the capital of resident entities. Construction-development projects include the development of townships, construction of residential or commercial premises, roads or bridges, hotels, resorts, hospitals, educational institutions, recreational facilities and other city and regional level infrastructure. Each phase of the construction-development project is considered as a separate project for the purposes of the FDI policy. A foreign investor is permitted to exit the project and repatriate its foreign investment before the completion of a project under the Automatic Route (i.e. without government approval), provided that a lock-in-period of three years, calculated with reference to each tranche of foreign investment, has been completed. The transfer of a stake from one non-resident to another non-resident, without repatriation of investment, is not subject to any lock-in period and does not require government approval. However, the Indian investee company will be permitted to sell only “developed plots”, meaning plots where basic infrastructure has been made available.
  • 100% FDI under the Automatic Route is permitted in completed projects, for the operation and management of townships, malls, shopping complexes and business centres. Upon the receipt of the foreign investment, transfer of ownership and/or control of the investee company from resident to non-resident Indians is also permitted. However, a lock-in period of three years applies, calculated with reference to each tranche of FDI.
  • Certain additional conditions apply to investments by Foreign Portfolio Investors, Foreign Institutional Investors and Foreign Venture Capital Investors.

External Commercial Borrowing (“ECB”) is not permitted for investment in real estate or purchase of land, unless used for affordable housing, construction and development of Special Economic Zones and industrial parks/integrated townships.

Under Indian law, a minor is not competent to enter into a contract. However, property can be acquired by a minor by inheritance or by the guardian for the minor or out of funds gifted to the minor. Transfer of immovable property during the minority of the holder can be effected with Court sanction.

Ireland Small Flag Ireland

There are no legal restrictions on the ownership of real estate in Ireland. However, anti-money laundering legislation requires that a number of checks be carried out on a potential buyer, and the identity of the buyer, the source of funds and the ability to fund the acquisition of real estate will need to be verified.

Russia Small Flag Russia

In general, real estate can be owned by any person or entity, save for specific statutory exceptions. Some real estate objects can be only state-owned, such as land plots in the forest reserve funds and water supplies, specially protected areas, national parks, land under airports, sea and river ports.

Further, there are restrictions for foreign ownership of real estate in Russia:

  • Foreigners cannot own land in the border territories;
  • Foreigners (and Russian companies with over 50% of foreign investment) may not own agricultural land, but may lease them.

Further, in some cases prior consent of the Russian authorities is required to acquire real estate. For instance, acquisition of strategic assets may require prior consent of the Russian Government.

Switzerland Small Flag Switzerland

As opposed to residential real estate which is controlled and restricted by the Swiss law on the acquisition of real estate by foreigners (the so called Lex Koller), the acquisition of commercial real estate by foreigners is not restricted. Any foreigners, whether domiciled or not in Switzerland, as well as any foreign companies, can freely acquire commercial real estate for their own use or for the sole purpose of investment. It must be noted though that apartment buildings commercially leased to third party tenants are not considered as commercial real estate. Therefore, such buildings cannot be acquired by foreigners or by foreign companies, within the meaning of the Lex Koller.

United Kingdom Small Flag United Kingdom

No, save in the case of minors and incapacitated persons. In the case of registered land, where the land is owned by multiple people or entities, the Land Registry will only register a maximum of four people or entities as the registered owners. Those registered owners will hold the legal title in the land on trust for all of the beneficial owners.

United States Small Flag United States

There are very few restrictions on who can own real estate or interests therein.

The federal government (specifically the Committee on Foreign Investment in the United States) has the authority to review transactions (including real estate transactions) that could result in control of U.S. real estate by a foreign person and may cancel or rescind a transaction if it determines that doing so is in the best interest of U.S. national security.

At the state level, many states have no additional restrictions, though there a handful of states that restrict the right of a non-U.S. person to buy, own, and sell large parcels of land.

Mexico Small Flag Mexico

In Mexico, foreign individuals and entities cannot acquire direct ownership of land located in a strip of 50 kilometres along the coastline and 100 kilometres along the borders (“Restricted Zone”, which covers almost 40% of the entire national territory).

Likewise, Mexican corporations with foreign investment cannot acquire direct ownership of land in the Restricted Zone for residential purposes. If, however, the land is used for other non-residential purposes (i.e. commercial, industrial, timesharing or tourism activities), the acquisition by a Mexican entity with foreign investment is permitted upon filing a notice with the Ministry of Foreign Affairs.

Foreigners who want to acquire rights in real property located within the Restricted Zone may do so through a leasehold interest (as tenants) or through a Mexican trust. The trust is a commonly used vehicle where the trustee (a Mexican financial institution) acquires title to the real property for the benefit of the foreigners (beneficiaries), who are entitled to use, enjoy, occupy, possess and obtain proceeds from the real property according to the terms and conditions set forth in the trust agreement. Mexican trusts created for these purposes may not exceed 50 years, but the term can be extended upon request to the Ministry of Foreign Affairs.

Outside the Restricted Zone, foreigners can directly own real estate subject only to obtaining a permit from the Ministry of Foreign Affairs.

Likewise, religious associations, charities and good will associations can only own real estate that is essential for their specific purpose. Financial institutions are also limited to own direct title to real estate that is essential for their specific purpose.

Peru Small Flag Peru

The Constitution states that, for reasons of national security, foreigners are banned from acquiring real estate located within 50 km from the national borders, except in cases of public need expressly declared by the Council of Ministers in accordance with the law.

Italy Small Flag Italy

Foreign investors are not restricted from purchasing real estate assets subject to the principle of reciprocity and the bilateral agreements, if any.

Turkey Small Flag Turkey

The ownership right is regulated as a fundamental right under the Constitution of the Republic of Turkey. However, it has been also stated that the ownership right may be restricted by law for the public interest and the usage right of the property shall not be contrary to public interest.

Natural persons with foreign nationality, foreign legal entities and Turkish companies with foreign capital are defined as foreign persons. In this respect there are some restrictions for foreign persons who desire to buy real estate in Turkey.

- Natural persons with foreign nationality can purchase real estate property and acquire limited rights in rem subject to legal restrictions, bilateral international relationships and circumstances requiring action deemed necessary in the public interest. Foreign natural persons may own up to 30 hectares of property in total and may acquire a limited in rem right. By obtaining the permission of Council of Ministers, this amount may be raised to 60 hectares in maximum. Foreign natural persons can acquire property or a limited in rem right in a district/town up to 10% of the total area of the district/town. Also purchasing a property in military forbidden and security zones is not possible.

- Foreign legal entities established in a foreign country under their local laws can only own real estate property and limited rights in rem within the scope of special provisions of Turkish law, including the Petroleum Law, Tourism Incentive Law and Industrial Area Law. Legal entities other than foreign trading companies (foundations, associations, etc.) cannot acquire real estate and can not establish restricted right in rem.

- Turkish companies with foreign capital, in which persons with foreign nationality or foreign companies own at least 50% of the shares or have the right to appoint/dismiss persons with management rights, may acquire and use real estate property or limited rights in rem to carry out the activities stated in the companies’ articles of association, by getting the approval of the city’s Governorship where the real estate property is located. The same property rights apply where companies with foreign capital become direct/indirect shareholders of a company incorporated in Turkey, and own 50% or more of the company’s shares.

Additionally, if the foreign person (company or real person) acquires a land, a project shall be submitted to be developed on the land within two years to the Ministry of Environment and Urbanization. Otherwise the Ministry has to right to liquidate the real estate.

Cyprus Small Flag Cyprus

Every citizen of Cyprus and the EU can become the registered owner of immovable property of Cyprus. The same applies for legal entities controlled by a majority of Cypriot or EU citizens.

There are restrictions with regards to non-EU citizens. In accordance with Cap 109 in order for an “alien” to acquire immovable property in Cyprus, the Council of Ministers’ permission must be sought. An “alien” is defined as a non-EU citizen or a company controlled by non-Eu citizens.

When the size of the immovable property exceeds the absolutely necessary size for the erection of a building to be used as a house or as business premises and in any case when the size exceeds 2675.60 square meters, the Council Ministers can grant a permit to an “alien” to acquire such immovable property, on terms, requirements and criteria that shall be determined in Regulations issued by the Council of Ministers and approved by the Parliament.

A contract of purchase shall be signed by an “alien” purchaser and is capable of being lodged at the land registry for specific performance purposes. However, the immovable property shall not be registered in the name of the “alien” unless the Council of Ministers grants a permit.

The same restriction applies to trusts, where the beneficiary is an “alien” as defined by the law.

Moreover, the restriction applies to acquiring a leasehold interest which exceeds the period of 30 years or when there is a right to renew for a period which together with the period of the original lease will exceed the period of 30 years. In the case where the lease is for a property which exceeds the absolutely necessary size for the erection of a building to be used as a house or as business premises and in any case when the size exceeds 2675.60 square meters and the lease exceeds the period of 10 years, Council of Ministers permission must be sought by an “alien”.

The restriction applies to the purchasing of shares of a company registered in the Republic of Cyprus, when such company owns immovable property in Cyprus and when such purchase will mean that the company will be controlled by “aliens”.

Japan Small Flag Japan

There are no restrictions on who can own real estate. It is possible for foreign entities to directly own land and buildings in Japan or hold trust beneficiary interests under the laws of Japan. Having said that, it is quite common to own real property or to hold beneficiary interests through a Japanese entity. Lastly, it is necessary to conduct a tax analysis in order to determine which is more advantageous in terms of corporate tax, withholding tax, and other taxes.

Thailand Small Flag Thailand

Under the current implementation of the Land Code, foreigners (an individual or a juristic person in which foreigners hold more than 49 % of the capital or the number of foreign shareholders exceeds 50% of the total) are generally restricted from owning real estate, with certain exceptions stipulated therein (e.g., the foreigner received the land by inheritance), as set forth in specific laws and regulations. In addition, a foreigner cannot be granted ownership by law as a result of adverse possession.

Here are the material exceptions:

(1) Investment Promotion Act 1977

A foreigner who receives investment promotion under this Act will be permitted to own plots of land for the purpose of the promoted business operation, as the Board of Investment deems appropriate. However, in the case of dissolution or transfer of business, the foreigners must dispose of such plots of land within one year of the dissolution date or transfer date (as the case may be).

(2) Industrial Estate Authority of Thailand Act 1979

A foreign business operator in an industrial estate may be granted the right to own plots of land within such industrial estate as the Board of Directors of the Industrial Estate Authority of Thailand (“IEAT”) deems appropriate. In the case of dissolution or transfer of business, the foreigners must dispose of such plots of land to the IEAT or the transferee of the business within three years of the dissolution date or transfer date (as the case may be).

(3) Petroleum Act 1971

For the purpose of operating petroleum business under this Act, the Petroleum Committee has the power to permit a foreign concessionaire to own plots of land, as it deems necessary.

(4) Condominium Act 1979

For other kinds of real estate, the Condominium Act 1979 permits foreigners to own a condominium, subject to qualifications under the Act, provided, that foreigners may not own more than 49% of the total area of the condominium.

Greece Small Flag Greece

There are restrictions for the acquisition of property rights in border zone areas of the country by individuals or companies that are not nationals of an European Union (EU) or European Free Trade Association (EFTA) country, and for the transfer of company shares or any change of partners of the companies that have ownership rights over assets located within such border zone areas. Permission needs to be obtained via application to a special commission prior to acquiring or renting the real estate or before proceeding to any shareholders’ structure change.

The commission is composed by the Secretary - General as president and his deputy, and representatives from the Ministries of Defense, Economy and Marine and Citizen Protection, who are appointed with their deputies by the respective authorities. The committee is authorized to suspend the restrictions, provided that it decides at a majority of the total number of members, and that the representative of the Ministry of Defense casts an affirmative vote.

Bulgaria Small Flag Bulgaria

European Union ("EU') citizens and entities registered in the member states of the EU and the European Economic Area are treated in the same manner as Bulgarian citizens and companies.

There are restrictions on the acquisition of ownership of real estate by other foreigners (i.e. foreign-registered or foreign-controlled entities and foreign individuals). However, companies registered in Bulgaria, are considered local legal entities and are often used for indirect acquisition of real estate by foreigners.

Depending on the type of owner/ property as well as the nationality/ residency of the owner, the following restrictions may apply:

  • agricultural land and forests cannot be acquired by political parties and foreign countries;
  • agricultural land can be acquired by natural persons/ legal entities, who have been resident/ established for at least 5 years on the territory of Bulgaria. Companies established less than 5 year ago can acquire agricultural land if their shareholders satisfy the 5-year requirement for residency as well as the requirements in the next bullet;
  • agricultural land cannot be owned by commercial entities (i) in which shareholders are directly/ indirectly companies registered in jurisdictions with preferential tax regime; (ii) which shareholders are not allowed to acquire agricultural land; (iii) which have issued bearer shares.
  • agricultural land and forests can be inherited by foreign citizens by law (i.e. not based on a testament) but (unless provided otherwise in an international treaty) they are obliged to transfer the property rights to a third person within 3 years after inheriting them.
  • foreigners, who are not EU citizens/ entities registered in the EU and the European Economic Area can acquire real estate only in accordance with the terms of an international agreement (if such exists), ratified under the terms provided for in the Constitution of the Republic of Bulgaria, promulgated and has entered into force

Brazil Small Flag Brazil

There are certain restrictions to acquisition of properties located in coastal, boarder or rural areas by foreigners or Brazilian companies controlled by foreigners, due to national security issues.

The transfer of title of real estate located in border areas and certain in rem rights by foreigners or Brazilian companies controlled by foreigners require approval by the CSN (national defense counsel), following specific law requirements.

The transfer and lease of rural areas of a certain size (varies on a local/municipal basis) by foreigners or Brazilian companies controlled by foreigners may depend on prior authorization by applicable governing authorities varying from Instituto Nacional de Colonização e Reforma Agrária (INCRA) – national colonization and land reform institute responsible for land reform and property distribution agricultural land, CSN or even the Federal Congress. The authorization request is presented at INCRA and the approval (by the competent body) shall analyze the activity to be developed, if other rural properties are owned by the same foreigner, as well as if in the municipality where the property is located other foreigners of the same nationality also own rural real estate.

Sweden Small Flag Sweden

There are no such restrictions under Swedish law, as a general principle any legal entity may purchase and own any type of land. One limitation to this general rule can however be found in statutory restrictions for business entities to acquire agricultural land from natural persons. For such an acquisition to be valid, the purchaser must obtain a permit from the Swedish Board of Agriculture within the legally stipulated timeframe.

Indonesia Small Flag Indonesia

Please see our answer to question 4 for a full list of the types of land title and their permissible holders.

With respect to foreign persons:

  • For business purposes, foreign persons may only own real estate by establishing a specific type of Indonesian Limited Liability Company called a foreign investment (Penanaman Modal Asing – “PMA”) company.
  • For residential purposes, foreign individuals who are resident in Indonesia (holding work permits) can own a residential home where the land has a right-to-use (HP) title or a strata title apartment unit with right to use (HPSRS) title, subject to meeting certain requirements concerning the minimum sale value and maximum land size.

Updated: February 1, 2019