Brazilian Supreme Court Upholds the Restrictive Regime for the Acquisition of Rural Properties by Foreign Capital

At its session held on April 23, 2026, the Plenary of the Brazilian Federal Supreme Court (STF) put an end to the controversy surrounding the validity of the legal restrictions on the acquisition and lease of rural properties by foreigners, and by Brazilian companies under foreign control. By unanimous vote, the Court recognized the full compatibility of Law No. 5,709/1971 with the prevailing constitutional order.

This decision has direct repercussions on foreign investors, funds with international capital participation, and agribusiness companies whose corporate capital is majority-held by foreign individuals or legal entities (or persons residing abroad), and deserves the attention of all players acting, directly or indirectly, in the rural land market in Brazil.

The Cases Adjudicated and the Origin of the Controversy

Two actions were jointly examined by the STF. The first, ADPF No. 342, was filed by the Sociedade Rural Brasileira (Brazilian Rural Society) seeking to set aside the application of article 1, paragraph 1, of Law No. 5,709/1971. The crux of the challenge was the equivalence established by the provision between Brazilian companies with majority foreign capital participation and foreign legal entities, subjecting both to the same restrictive regime for the acquisition of rural properties.

The second action, ACO No. 2,463, had a diametrically opposite purpose. In it, the Federal Government and INCRA (the National Institute of Colonization and Agrarian Reform) sought a declaration of nullity of an opinion issued by the Internal Affairs Office of the Court of Justice of São Paulo, which had exempted the São Paulo notary offices from observing the requirements of Law No. 5,709/1971 in transactions involving companies with foreign capital.

The STF’s Decisions and Considerations

At the session held on April 23, the final result was unanimous: ADPF No. 342 was dismissed and ACO No. 2,463 was upheld, with the consequent declaration of nullity of the opinion issued by the São Paulo Internal Affairs Office. The drafting of the ruling will be handled by Justice Gilmar Mendes, and its official publication by the Court is still pending.

Of particular note from the plenary session is the dissenting-vista opinion of Justice Alexandre de Moraes, which not only validated the restrictions already imposed by Law No. 5,709/91, but also placed special emphasis on the control over “rare earths.” The Justice stressed that such minerals constitute strategic global assets, fundamental to technological sovereignty and to the development of national industries. From this perspective, the Court’s unanimous decision constitutes a legitimate and indispensable regulatory mechanism for the State of Brazil, reinforcing its prerogative to scrutinize and limit the transfer of critical territorial and mineral resources to international capital.

What Changes in Practice?

Since the ruling did not introduce any new understanding , its main effect is the full maintenance of the current regime. The restrictions on the acquisition and lease of rural properties set forth in Law No. 5,709/1971 and in Law No. 8,629/93 remain fully applicable. Brazilian companies with majority foreign capital participation continue to be treated as foreign legal entities for all purposes of the legislation, and must observe local limits, the need for prior authorization, and the regional prohibitions provided therein.

Furthermore, with the declaration of nullity of the opinion issued by the Internal Affairs Office of the Court of Justice of São Paulo, the disparity in treatment that existed between the São Paulo notary offices and those of the other states is eliminated. All real estate registry officers in the country must uniformly observe the requirements and limitations of Law No. 5,709/1971.

Guidance to Clients and Investors

We recommend that foreign investors, investment funds with international capital participation, and agribusiness companies whose corporate capital is held on a majority basis by foreigners review their ongoing or planned operations in light of the STF’s definitive confirmation of the restrictions. It is equally advisable that transactions previously structured based on the thesis of non-reception of Law No. 5,709/1971 be reassessed as to their regularity.

The Real Estate Transactions and Investments practice of Tauil & Chequer Advogados in association with Mayer Brown is available to assist in analyzing specific impacts and in structuring transactions in compliance with the legal regime now consolidated.

Note: This Legal Update was published before the full ruling was made available by the STF. Accordingly, this material may be subject to changes in the future.