On June 30, 2016 Decree 820/16 was passed. It amends the regulation of the Rural Land Law 26.737.
The main changes are related to the following aspects:
- The manner to determine when a company is considered a foreign entity for purposes of the Rural Land Law. It clarifies that a "foreign entity" should be one in which foreign entities or individuals, directly or indirectly hold the majority of the decision making, regardless of equity participation.
- It indicates that reporting to the authorities is required when there is an amendment in the equity participation or ownership of a legal entity which owns rural land, as long as:
- There is a direct or indirect change of control;
- It relates to a legal entity - organized in Argentina or abroad - directly or indirectly controlled by Argentines, if it becomes a foreign entity under the Rural Land Law;
- It relates to a foreign entity under the Rural Land Law if it becomes directly or indirectly controlled by another individual or foreign entity under the Rural Land Law;
- It relates to a foreign entity under the Rural Land Law if it becomes directly or indirectly controlled by Argentines.
Likewise, for purposes of the determination of the limit of ownership imposed to a same "foreign entity", under section 10 of the Rural Land Law, the amendment on the equity participations of individuals or foreign entities in a foreign entity under the Rural Land Law that holds rural land, must be reported.
In the case that, as a result of the amendment, the foreign controlling entity exceeds directly or indirectly the limits imposed under section 10 of Law 26.737, it must become compliant within 90 days of the amendment and also mention the alternatives it will use to move forward such as a sale of the excess land, transfer of shares and so on.
- It defines the core area of Argentina and the manner to determine equivalencies in different areas of Argentina.
- It includes the possibility for purposes of the calculation of limits to ownership, to segregate based on the different exploitation of the land. This is new.
- It confirms and clarifies those cases in which a Permit Certificate should not be requested, including within this category the amendments mentioned under b) above, the granting of real rights that fragment ownership (e.g. usufruct); the transfer to mandatory foreign inheritors, etc. This is new.