The Brazilian Supreme Federal Court (STF) has concluded the joint trial of ADPF No. 342 and ACO No. 2463, addressing the restrictions on rural land acquisition by Brazilian companies controlled by foreign capital. The Court ruled in favor of the constitutionality of the limits established by Law No. 5,709 of 1971 and the 2010 Legal Opinion (LA-01)issued by the Office of the Attorney General (AGU).
On one hand, critics argued that the 1971 limitations acted as barriers to foreign direct investment, potentially hindering the competitiveness of Brazilian agribusiness and the development of large-scale projects in logistics, renewable energy, and carbon credits.
Conversely, those in favor of the restrictions maintained that land is a strategic and finite asset, essential to national security. From this perspective, the lack of control over foreign capital acquiring vast territories could compromise state sovereignty over water and mineral resources, while also posing a risk to food security, particularly in border regions.
The STF’s majority opinion favored the maintenance of these restrictions based on the preservation of national sovereignty. According to the retired Justice Marco Aurélio, the reporting justice for the case, the 1971 Law was fully upheld by the 1988 Federal Constitution. Consequently, Brazilian companies under foreign control remain subject to a prior authorization regime for land acquisition, requiring mandatory registration with the National Institute for Colonization and Agrarian Reform (Incra) and adherence to a size limit of 50 exploration modules.
The Supreme Court’s verdict establishes a framework of legal certainty on the matter, consolidating a policy of control over strategic territorial assets. It sends a clear signal to the global market regarding Brazil’s guidelines for foreign investment in the sector.