There are many reasons why real estate investors might choose to diversify their portfolios by making investments abroad. By investing in multiple countries, they can reduce their overall risk and increase their chances of making significant profits. Additionally, they can acquire international assets that can provide a hedge against currency fluctuations or other economic risks.

A foreign national investing in U.S. real property may also need to comply with the non-tax reporting requirements under the International Investment Survey Act of 1976 (IISA) and the Agricultural Foreign Investment Disclosure Act of 1978 (AFIDA). Both laws were enacted to monitor investments of foreign sources in U.S. real property.

The IISA requires that a foreign person notify the U.S. Department of Commerce of any direct or indirect investment in U.S. real property that exceeds $1 million. The AFIDA requires that a foreign person notify the U.S. Department of Agriculture of any direct or indirect investment in U.S. agricultural land that exceeds $500,000.

The purpose of the International Investment and Trade in Services Survey Act (IISA) is to obtain information on foreign investment in U.S. real property and to analyze and formulate U.S. policy on these investments, particularly the impact on the economies of the U.S. and other countries. The information obtained under IISA is confidential and is used only for Department of Commerce analytical or statistical purposes or for enforcement proceedings imposed under IISA.

To address some concerns about foreign investment in U.S. farmland in the 1970s, Congress passed the Agricultural Foreign Investment Disclosure Act (AFIDA) with the intention to provide a uninterrupted source of available information on foreign investment in U.S. farmland. Any acquisition or transfer of agricultural land by a foreign national must be reported to the U.S. Department of Agriculture. Required information includes the owner’s identity, the property’s value, the type of transaction through which the property was bought, the date of transfer, and the current and intended use for the property.

Some federal and state laws impose reciprocity requirements, i.e., they will permit the particular investment only if the investor’s country of origin admits U.S. enterprises on the same or similar terms. Although reciprocity requirements are not common in the U.S., they are sometimes found in such fields as the establishment of bank branches, communications, international air transport, and participation in certain mineral interests on federal lands.

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In addition to the federal laws, some states limit foreign ownership of real property within their state boundaries, and have restrictions and/or reporting requirements that affect the purchase of real estate by foreigners. While a foreign national in New York may take, hold, convey and dispose real property, over half of the states have some restrictions on the ownership of land by foreigners. Many of the state laws and regulations apply only to agricultural land and have varying degrees of restrictions.

Some states, like Alabama, require that foreign nationals disclose their citizenship status when purchasing real property. Other states, like Arkansas, limit the amount of land that a foreign national can own. Still other states, like California, have no restrictions on foreign ownership of real property. It is important to research the laws of the state in which you are interested in purchasing property before making any decisions.

However, some states set limits on the number of acres for which the land may be used. Others extend to foreigners the same treatment U.S. citizens are given in the foreigner’s home country. This means that foreigners are subject to the same restrictions as U.S. citizens in their home countries.

Concerned by an excess of foreign ownership of real property, several states have imposed strict guidelines on foreign ownership or even prohibited it. For instance, nonresident individuals in Kansas and Wyoming, who are not eligible for U.S. citizenship, cannot acquire or own real estate unless that right is granted by treaty (Powers, Timothy E., Foreign Investment in U. S. Real Estate, 1990). In New Hampshire, nonresident ownership is fully proscribed, while Missouri limits non-agricultural land ownership by nonresidents to five acres or less. Oklahoma prohibits a nonresident from acquiring land, and if a resident landowner subsequently leaves the state, any real property owned by the departing taxpayer reverts to the state unless disposed of within five years (Ernst & Whinney, Acquiring U. S. Real Estate: Tax and Business Considerations for the International Investor, 1989). Because state laws change frequently, it is advisable that any foreign entity or resident check state and local laws carefully before acquiring real property in the United States.

The book Foreign Investment in U.S. Real Estate by Timothy E. Powers provides information on state regulation of foreign ownership. You can also visit for the most current information on state laws.


Some real estate investors choose to diversify their portfolios by investing in multiple countries in order to reduce their overall risk. By investing in a variety of countries, investors can increase their chances of making significant profits. Additionally, by acquiring international assets, investors can hedge against currency fluctuations or other economic risks.