Rural Lands Law - Equivalencies to the Core Area

1. Purpose of the Rural Lands Law: The main purpose of Law No. 26,737, enacted on December 22, 2011 and implemented by Decree No. 274/2012 issued on February 28, 2012, (the “RLL”) is to regulate, with regards to foreign individuals and legal entities, the limits to ownership and possessions of rural lands. The aforesaid limits are:
(i) Foreign ownership of rural lands shall not exceed 15% of the total amount of “rural lands” in the whole Argentine territory or in the territory of the relevant province or municipality where the relevant lands are located.  Additionally, iindividuals or corporations of the same nationality will not be able to own or possess rural lands that represent more than thirty percent (30%) of the fifteen percent (15%) previously mentioned.
(ii) Ownership or possession by the same foreign owner shall not exceed 1,000 hectares in the “core area” or the “equivalent surface” determined according to the location of the lands, which is to be defined by the competent authorities.
(iii) Foreign legal entities or individuals shall not be owners of rural lands that comprise or are located beside permanent and significant bodies of water.  Nor shall they be owners of lands located in border security zones, other than in accordance with the exceptions and the procedures established in the regime of Argentine security zones.

2. The Census of the National Registry of Rural Lands (“NRRL”): On July 23, 2013, the NRRL (the enforcement authority of the RLL) made public the outcome of the national census which was performed to determine foreign ownership of Argentine rural lands.  The results were as follows:
(i) Argentina has 267,679,474 hectares of rural lands; that is to say 95.88% of its territory.
(ii) As of July 23, 2013, at a national level 15,881,069 hectares are owned by foreigners, that is to say 5.93% of the rural lands (a long way from the cap of 15% of foreign ownership set forth in the RLL). At a provincial level, none of the provinces exceeds the cap; meanwhile, at a municipal level it was exceeded in 49 municipalities.  In each province, the status was as follows:

(read the table) 

3. News published by the NRRL in May, 2014: Recently, the NRRL published on its website (www.jus.gob.ar/tierras-rurales/limites-a-la-extranjerizacion.aspx) data of the 49 municipalities that exceed the cap of 15% of foreign ownership. Therefore, no foreigner would be allowed to acquire rural lands in the following municipalities:

(read the table) 

Additionally, the NRRL informed about the tasks carried out by 8 provinces to determine the equivalencies related to the 1,000 hectares of the core area.  These provinces are Chubut, Formosa, La Pampa, Mendoza, Misiones, Río Negro, San Luis, Tierra del Fuego and Tucumán.
In the remaining provinces, those tasks would be on-going.  A particularity to highlight is that in certain departments of the province of Tucumán the equivalencies are lower than the 1,000 hectares of the core area.  Thus, in the Department of Tafí the equivalency is of 300 hectares and in the departments of Tafí Viejo, Lules, Famaillá, Monteros, Chicligasta, Río Chico and Juan Bautista Alberdi the equivalency is of 500 hectares.