The Supreme Court of Brazil maintained the restrictions on the purchase of rural properties in Brazil by Brazilian companies with foreign capital, according to a preliminary decision of the Minister Marco Aurélio, published on September 05, 2016. Such decision suspended the effects of the Opinion # 461-12-E, issued by the Administrative Department of the State of São Paulo, of December 11, 2012, which allowed the purchase of rural properties in the State of São Paulo by Brazilian companies with foreign capital, dismissing notaries and officials of the State of São Paulo from observing the restrictions of Brazilian Federal Law # 5.709/71 and Decree # 74.965/74.
By suspending the effects of Opinion # 461-12-E, which considered impossible the distinction between national companies – with or without foreign capital, the Supreme Court signals that it might confirm the restrictions for the purchase of rural land by Brazilian companies with foreign capital at the time of the final judgment of the civil lawsuit # 2463, filed by Incra and the Federal Union, which seeks the declaration of invalidity of the normative guidance of the opinion issued by the Judicial Administrative Department of the State of São Paulo. Minister Marco Aurélio also determined the combined trial with the constitutional action ADPF # 342, in which the “Sociedade Rural Brasileira – SRB” claims invalidity of restrictions on foreign capital due to constitutional prohibition of harmful differential treatment between companies with national capital and with foreign capital.
The Supreme Court decision may heat up discussions in Congress, as members of the current government, including the minister of agriculture, have already expressed the need to review the restrictions on foreign capital in Brazil.
Azevedo Sette’s Corporate Team is available for eventual further clarifications and additional assistance upon this matter.