United States: Update On U.S. States' Laws Restricting Foreigners From Buying Land

March 15, 2024 (Fort Lauderdale, Fla.) - On July 1, 2023, a new Florida law (Senate Bill 264) went into effect, restricting foreign investment in Florida real estate from specific countries, and enacting a near-ban on property purchases by Chinese, Russian and other foreign nationals.

Senate Bill 264, titled "Interests of Foreign Countries," prohibits Chinese nationals and nationals from other countries, including Russia, from buying land unless they are American citizens or permanent residents. In addition to Florida, over 20 other states currently have laws restricting foreign private investment in real estate, including primarily agricultural land.

This update builds on a May 19, 2023, Lewis Brisbois publication analyzing Florida's new law restricting foreign citizens from buying land in in that state and a July 5, 2023, Lewis Brisbois publication discussing a lawsuit challenging the new Florida law.

Currently, states that have introduced or passed laws restricting foreign private investment in agricultural land include:

• Mississippi House Bill 280, signed by the Governor in May 2023, prohibits foreign governments from purchasing, acquiring, leasing, or holding any interest in agricultural land in the state.
  
  Mississippi Agricultural Land Protection and Foreign Acquisition Prohibition Act (H.B. 348) – Failed
• MISSISSIPPI
  H.B. 280 – Enacted
  
  
• Subdivision 2 of Minnesota Statute 500.221 prohibits any natural person from acquiring, either directly or indirectly, any interest in agricultural land unless they are a citizen or permanent resident of the US. It also expressly prohibits corporations, partnerships, trustees and other business entities from acquiring or otherwise obtaining an interest (whether legal, beneficial or otherwise) in any title to agricultural land unless at least 80% of each class of stock issued and outstanding or 80% of the ultimate beneficial interest of the entity is held directly or indirectly by citizens of the US or permanent resident aliens. The prohibition does not apply to agricultural land acquired by devise, inheritance, as a security for indebtedness, or by process of law, among other things.
  
  
• MINNESOTA
  Minn. Stat. § 500.21 – Enacted
  
  
• "Person connected with a foreign adversary" means the juridical person, as defined in Civil Code Article 24, in which the foreign adversary has the power to direct or cause the direction of the management or policies of the juridical person whether through ownership of securities, by contract or otherwise. A person or entity that directly or indirectly has the right to vote 50% or more of the voting interests of an entity or is entitled to 50% or more of its profits is presumed to have the power to direct or cause the direction of the management or policies of the juridical person.
  
  
• Foreign Adversary means an individual or government identified as a foreign adversary in 15 C.F.R. 7.4(a) and identified in the database by the Office of Foreign Assets Control.
• Louisiana prohibits foreign adversaries and persons connected with foreign adversaries from purchasing, leasing, or otherwise acquiring immovable property in the state on or after August 1, 2023. This section does not apply to immovable property purchased, leased, or otherwise acquired by a natural person that is used as a 1-to-4 family residential property.
• LOUISIANA
  La. R.S. §9:2717.1 – Enacted
  
  
• Kentucky's House Bill 500, proposed in February 2023, prohibits the purchase, lease, or acquisition of agricultural land by Chinese, Russian, and other individuals associated with foreign countries that have been deemed by the federal government to be a threat to the U.S. The bill has since failed to pass.
  
  
• KENTUCKY
  KY H.B. 500 – Failed
  
  
• Kansas Senate Bill 446, introduced on February 4, 2024, prohibits any person owned by, controlled by or subject to the jurisdiction or direction of a foreign government from acquiring any interest in any parcel of real property that is 3 acres or more. This prohibition applies prospectively to acquisitions after July 1, 2024.
  
  
• KANSAS
  KS S.B. 446 – Introduced
  
  
• Iowa prohibits a nonresident alien, foreign business or foreign government, or an agent, trustee, or fiduciary thereof, from purchasing or otherwise acquiring agricultural land in the state. The restriction does not apply to agricultural land acquired by devise or descent, encumbrances for the purposes of security, and agricultural land acquired by process of law (i.e., the collection of debts, lien enforcement, etc.)
  
  
• IOWA
  Iowa Code §91.3 – Enacted
  
  
• Indiana prohibits foreign business entities from acquiring by grant, purchase, devise, descent, or otherwise any agricultural land within the state for the purpose of crop farming or timber production after June 30, 2022. "Foreign business entities" include any corporation, LLC, partnership, or the like, that is organized under the laws of another country, as well as their agents, trustees and fiduciaries.
  
  
• INDIANA
  Burns Ind. Code Ann. § 32-22-3-4 – Enacted
  
  
• A "foreign principal" means (A) the government or any official of the government of a foreign country of concern; (B) a political party or member of a political party or any subdivision of a political party in a foreign country of concern; (C) a partnership, association, corporation, organization, or other combination of persons organized under the laws or having its principal place of business in a foreign country of concern, or a subsidiary of such entity; or (D) any person who is domiciled in a foreign country of concern and is not a citizen or lawful permanent resident of the US; and (e) any person, entity, or collection of persons or entities, described above, having a controlling interest in a partnership, association, corporation, organization, trust, or any other legal entity or subsidiary formed for the purpose of owning real property in the state.
  
  
• A "foreign country of concern" means China, Russia, Iran, the Democratic People's Republic of Korea, Cuba, the Venezuelan regime of Nicolas Maduro, or the Syrian Arab Republic, including any agency of or any other entity of significant control of such foreign country of concern.
• In Florida, a foreign principal may not directly or indirectly own, have a controlling interest in, or acquire by purchase, grant, devise, or descent agricultural land or any interest, except a de minimis indirect interest, in such land in the state. This applies prospectively from July 1, 2023.
• FLORIDA
  Fla. Stat. § 692.202 – Challenged
  
  
• In April of 2023, Arkansas codified SB 383, which prohibits foreign parties from acquiring by grant, purchase, devise, descent or otherwise, any interest in agricultural land regardless of whether the prohibited foreign party intends to use the agricultural land for nonfarming purposes. This prohibition extends to those who hold agricultural land as an agent, trustee or other fiduciary for a prohibited foreign party.
  
  
• ARKANSAS
  A.C.A. § 18-11-803 – Enacted
  
  
• House Bill 348, introduced January 22, 2024, seeks to restrict prohibited foreign parties from acquiring by grant, purchase, devise, descent or otherwise, any interest in agricultural land in Mississippi. Specifically, "prohibited foreign parties" include citizens, residents or foreign governments of a country subject to International Traffic in Arms Regulations (22 C.F.R. 126.1) and any party (other than an individual or government) organized under the laws of any state in which a significant interest or substantial control is held by certain individuals, foreign governments or foreign entities. On March 5, 2024, the Bill died in committee.
  
  
• MISSOURI
  §442.571 R.S. Mo. – Enacted
  
  
• In Missouri, no alien or foreign business shall acquire by grant, purchase, devise, descent or otherwise, agricultural land in the state if the total aggregate alien and foreign ownership of agricultural acreage in Missouri exceeds 1% of the total aggregate agricultural acreage in the state.
  
  
• NEBRASKA
  R.R.S. Neb. § 76-402 – Enacted
  
  
• Aliens and corporations not incorporated under the laws of the State of Nebraska are prohibited from acquiring title to or taking or holding any land, or real estate, or any leasehold interest extending for a period of more than 5 years or any other greater interest less than fee in any land, or real estate in Nebraska by descent, devise, purchase or otherwise. The state allows for widows and heirs of aliens who have acquired lands to hold such lands by devise or descent for 10 years.
  
  
• NORTH DAKOTA
  N.D. Cent. Code § 47-01-09 – Enacted
  
  
• In North Dakota, after July 1, 2023, no foreign adversary, foreign business entity with a principal office located in a country that is identified as a foreign adversary, or foreign business entity in which a foreign adversary owns more than 50% interest (or less than 50% and the foreign adversary directs the business operations) may purchase or otherwise acquire title to real property in the state.
• A foreign adversary means any individual or a government identified as a foreign adversary in 15 C.F.R. 7.4(a) or a person identified on the office of foreign assets control sanctions list.
  
  
• OHIO
  Ohio Rev. Code §5301.256 – Enacted
  
  
• In Ohio, on or after October 3, 2023, no person listed on the registry published by the secretary of state, and no agent, trustee or fiduciary of such person, shall purchase or otherwise acquire agricultural land in the state. This section does not apply to agricultural land acquired by devise or descent, but if a restricted person acquires agricultural land by devise or descent after the effective date, it must divest itself of all title within 2 years.
• The secretary of state periodically updates a registry of persons that constitute a threat to the agricultural production of the state or the U.S. The secretary will consult all of the following in compiling such registry: (1) the list of persons determined to be foreign adversaries by the secretary of commerce of the U.S. under 15 C.F.R. 7.4; (2) the terrorist exclusion list under 8 USC 1182; (3) the list of countries determined to have repeatedly provided support for acts of international terrorism under 10 USC 4813(c) and 22 USC 2780(d); and (4) the list of individuals and entities designated by, or in accordance with EO 13224, issued by the President on September 23, 2021, or EO 13268, issued by the President on July 2, 2002.
  
  
• OKLAHOMA
  60 Okl. St. §121 – Enacted
  
  
• Oklahoma prohibits aliens or any person who is not a citizen of the US from acquiring title to or owning land, either directly or indirectly through a business entity or trust. The prohibition does not apply to business entities engaged in regulated interstate commerce in accordance with federal law.
  
  
• PENNSYLVANIA
  68 P.S. §41 – Enacted
  
  
• In Pennsylvania, an alien, who is not a resident of the US, and a foreign government shall not acquire an interest in agricultural land, exceeding 100 acres, except such as may be acquired by devise or inheritance, and such as may be held as security for indebtedness.
  
  
• SOUTH CAROLINA
  S.C. Code Ann. § 27-13-30 – Enacted
  
  
• No alien or corporation controlled by aliens, either in his capacity as an individual or as trustee, shall own or control within the limits of South Carolina, more than 500,000 acres of land. Otherwise, aliens and foreign corporations are expressly entitled to the same property as natural-born citizens.
  
  
• SOUTH DAKOTA
  S.D. Codified Laws § 43-2A-2 – Enacted
  
  
• South Dakota prohibits aliens, who are not a resident of the US, and foreign governments from acquiring agricultural lands, or any interest therein, exceeding 160 acres, except as may be acquired by devise or inheritance, and such as may be held as security for indebtedness.
  
  
• TENNESSEE
  Tenn. Code Ann. § 66-2-302 – Enacted
  
  
• Tennessee prohibits a sanctioned nonresident alien, sanctioned foreign business, or sanctioned foreign government, or an agent, trustee, or fiduciary thereof, from purchasing or otherwise acquiring real property in the state if the country where the sanctioned nonresident alien resides, the sanctioned foreign business in located, or the official sanctioned government representing the country, or agents, trustees, or fiduciaries thereof, is on the office of foreign assets sanctions programs and country information list. This prohibition applies prospectively from July 1, 2023.
• A "Sanctioned Foreign Business" means (A) a corporation incorporated under the laws of a foreign country of a sanctioned foreign government; (B) A business entity in which a majority interest is directly or indirectly owned by sanctioned nonresident aliens; or (C) a corporation or business entity that is identified on the office of foreign assets control sanctions programs and country information list.
• A "Sanctioned Nonresident Alien" does not include (i) a citizen of the US; or (ii) a person lawfully admitted into the US for permanent residence, even if such status is conditional.
  
  
• TEXAS
  S.B. 147 (2023) – Failed
  
  
• The Texas Senate proposed Senate Bill 147, which would prohibit governmental entities, certain corporate entities, and citizens of certain designated countries from purchasing or acquiring title to real property in the State. If it is determined that real property has been acquired in violation of this provision, the individual/entity will be divested of their interest in the property. The Bill failed in the House.
• A "Designated Country" means a country identified by the United States Director of National Intelligence as a country that poses a risk to the national security of the U.S. in each of the 3 most recent annual threat assessments of the U.S. Intelligence Community issued pursuant to Section 108B, National Security Act of 1947.
  
  
• UTAH
  Utah Code Ann. §63L-13-201 – Enacted
  
  
• In Utah, a restricted foreign entity may not acquire interest in land in the state. It does not apply to interests acquired before May 3, 2023 by purchase, grant, gift, devise, donation, or bequest; a security for the repayment of debt; or as a party to a contract for the transfer or conveyance of an interest in land to the restricted foreign entity.
• A "Restricted foreign entity" means (a) a company that the US Secretary of Defense is required to identify and report as a military company under Section 1260H of the William M. Thornberry National Defense Authorization Act for Fiscal Year 2021; (b) an affiliate, subsidiary, or holding company of a company described above; (c) a country with a commercial or defense industrial base of which a company described above is a part; (d) a state, province, region, prefecture, subdivision, or municipality of a country described in (c); and (e) an agency, bureau, committee, or department of a country described in (c).
  
  
• VIRGINIA
  VA S.B. 1438 (2022) – Enacted
  
  
• Virginia House Bill 1438, enacted April 12, 2023, states that no foreign adversary shall acquire any interest in agricultural land in the Commonwealth. Any such acquisition is considered void, and the title is deemed to have vested in the name of the Commonwealth, without any payment of consideration.
• "Foreign adversary" means any foreign government or nongovernment person determined by the US Secretary of Commerce to have engaged in a long-term pattern or serious instances of conduct significantly adverse to the national security of the US as set forth in 15 C.F.R. 7.4.
  
  
• WISCONSIN
  Wis. Stat. § 710.02 – Enacted
  
  
• Wisconsin restricts the following persons from acquiring, owning or holding interest in more than 640 acres of land in the state: (a) aliens who are not residents of the US; (b) Corporations not created under the laws of any US state; and (c) Corporations, LLCs, partnerships or associations having more than 20% of their stock or securities held by persons described in (a) or (b) or trusts having more than 20% of the value of its assets held for the benefit of persons described in (a) or (b).

In light of the lawsuit challenging Florida's statute, the laws in the above-referenced 21 states call for closer scrutiny, as they will likely be challenged soon under the same precedents. All foreign owners and investors of residential, commercial or agricultural land in any transaction may want to monitor the pending litigation in Florida and the laws in the above-referenced states; in addition, as a precautionary measure, while these laws remain in force, it would be prudent to conduct a rigorous compliance check to ensure there is no violation of these existing laws or regulations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.