New Report from the Law Library of Congress on Foreigners’ Right to Real Property Ownership : China, Iran, North Korea, Russian Federation

The following is a guest post by Peter Roudik, the assistant law librarian for legal research at the Law Library of Congress and the director of the Law Library’s Global Legal Research Directorate.

Can foreigners buy property? Can they invest in real estate development projects? How do individual jurisdictions protect the property rights of their citizens? These questions are being asked more often after some countries recently restricted the ability of foreign nationals to purchase real estate or proposed amendments to their investment laws aimed at limiting foreign participation in real estate development projects. Proponents of these protective measures usually say that this is an established practice in many countries needed to protect local homeowners from being priced out by wealthy investors from abroad.

In a recent study, titled “Foreigners’ right to real property ownership” the Law Library of Congress reviewed laws and regulations of China, Iran, North Korea, and the Russian Federation regulating the right of foreign companies and individuals to acquire land and other real estate, with a particular focus on whether persons from the United States are specifically prohibited.

Our research identified that none of these four jurisdictions has laws specifically concerning U.S. natural and legal persons, and restrictions related to foreign real estate ownership apply generally to all foreigners regardless of their citizenship. However, political relations between the countries should be taken into consideration. Good relations with the investor’s country of citizenship are grounds to issue government authorization for foreigners’ real estate transactions. Russia also used real estate operations by foreigners as a tool to respond to sanctions imposed in response to its aggression in Ukraine, and introduced additional restrictions on people and companies from so-called “unfriendly nations.”

It is interesting to see how countries differentiate ownership of different forms of real estate. All four jurisdictions ban foreigners from purchasing farmland and prohibit investments in specific geographic areas, some require proof of residential and business needs to make the purchase, and others impose time limitations. The report reveals, among other things, what role an investor’s religion plays in Iran, and what schemes are used in North Korea to bypass the general prohibition on private property in North Korea.

The report is part of the Legal Reports (Publications of the Law Library of Congress) collection which contains to date nearly 4,000 reports, current and historical, authored by the Law Library of Congress specialists and analysts on a variety of legal topics.

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