Can an Argentine buy land in Chile? The border zone and how the authorisation is applied for

Short answer: yes, an Argentine can buy land in Chile anywhere that is not declared a border zone, on the same terms as any other foreigner. Inside the border zones the law prohibits nationals of neighbouring countries from acquiring, possessing or holding real property, and the only way to do so is an exemption from the President of the Republic granted by supreme decree, person by person and property by property. The territorial exception is a set of areas in the commune of Arica. Before paying anything, the first question is whether the land is inside the zone.

The rule, as it reads today

Article 7 of Decree Law 1.939 of 1977 provides that, for reasons of national interest, nationals of neighbouring countries are prohibited from acquiring ownership and other rights in rem, or exercising possession or holding, over real property situated wholly or partly in the zones declared border zones, unless the authorisation the same article regulates has been granted. Chile borders Argentina, Bolivia and Peru.

Two points about the text. Until 1993 the ban was conditional on reciprocity, meaning it applied where the other country imposed similar limits on Chileans; Law 19.256 removed that condition, and the rule now rests only on national interest. And the article reaches more than purchases: it also prohibits exercising possession or mere holding, and a tenant is a mere holder, so taking a lease on a property in a border zone raises the same question.

For anyone who is not a national of a neighbouring country this rule does not apply, and we explain that in detail in buying land in Chile's border zones. This guide is for those it does reach.

How to know whether the land is in a border zone

The border zone is not a band of so many kilometres written into the law. Decree with Force of Law 4 of 1967 of the Ministry of Foreign Affairs gives the President of the Republic the power to determine by supreme decree, on the proposal of the National Directorate of State Borders and Boundaries, which areas of the territory are to be treated as border zones, with the signature of the Minister of Foreign Affairs as well. The zones in force result from several decrees issued since 1968.

Those decrees also take territory out of the zone. Supreme Decree 1.166 of 1999 removed 35 communes and the urban areas of Calama, Copiapó, Los Andes and Porvenir from the border zone regime. At the other end, the Comptroller General has concluded that the Arica and Parinacota Region is a border zone in its entirety.

The practical way to answer the question for a specific plot is to overlay its plan on the border zone cartography published by the Directorate of Borders and Boundaries, drawn at a scale of 1:50.000 over the base cartography of the Military Geographic Institute. If the land has never been measured against a plan, that is the prior problem, and it is dealt with in rectifying registered area and boundaries.

A company does not solve the problem

The second paragraph of article 7 extends the prohibition to companies or legal persons with their principal seat in the neighbouring country, to those whose capital belongs in 40 per cent or more to nationals of that country, and to those whose effective control is in the hands of its nationals. The threshold was 20 per cent until Law 19.420 raised it to 40. The same law adds that neighbouring states and their enterprises may never acquire property in a border zone.

Dual nationality does not take anyone out of the rule either. To calculate the 40 per cent, the Comptroller General has counted as Argentine a person holding Argentine nationality together with another, and has warned of the risk that someone with more than one nationality omits to declare the one that triggers the prohibition. The case of a person who is both Chilean and Argentine has no official criterion resolving it, and it has to be analysed before buying, not afterwards.

Outside the border zone, a company can be a good structure, for other reasons. The comparison is in holding Chilean property personally or through a company.

The Arica exception

Article 19 of Law 19.420 provides that the prohibition in article 7 does not apply to natural and legal persons of neighbouring countries in respect of real property situated in certain areas of the commune of Arica. There are four:

• The areas forming the urban perimeter of the city of Arica under its zoning plan.
• The Chacalluta and Puerta de América industrial parks, identified by their entries at the Arica Registrar of Real Property.
• The areas declared centres of tourist interest by the National Tourism Service.
• Those designated by the President of the Republic by reasoned supreme decree, issued through the Ministry of the Interior and signed as well by the Ministers of Foreign Affairs and of National Defence.

Outside those areas, the rest of the region remains a border zone. The same law requires the Arica Registrar to keep a special register of purchases made by foreigners in the provinces of Arica and Parinacota. The far north also has forms of ownership of its own, which we cover in buying land in northern Chile.

How the authorisation is applied for

The procedure is governed by Decree 232 of 1994 of the Ministry of Foreign Affairs, which regulates article 7. The authorisation always refers to named persons and identified properties; there is no general authorisation.

The regulation says the application is filed with the Intendencia or the provincial Gobernación of the place where the property lies. Those offices no longer exist: the Constitution provides that the functions the laws gave to the intendente and the gobernador are now attributed to the regional and provincial presidential delegates. Today, therefore, the application is filed with the presidential delegation that covers the property. It is worth knowing that the information page of the Directorate of Borders and Boundaries still names the Intendencia and the Gobernación.

Everything is filed in triplicate. The receiving office sends the file to the Directorate of Borders and Boundaries, which may ask the applicant and other public bodies for whatever reports it considers necessary. Once the file is complete, the Directorate sends it to the Joint Chiefs of Staff, which succeeded the former National Defence Staff. Both issue their reports, which are confidential, within fifteen days. The reports go to the Ministry of the Interior, which issues the decree, signed as well by the Ministers of Foreign Affairs and of National Defence.

Three things worth knowing before starting. First, the decree goes through review by the Comptroller General, which has required it to state explicitly the reasons of national interest that justify the exception. Second, the regulation says these decisions do not constitute precedent, so an authorisation granted to someone else is of no use to you. Third, the authorisation confers no privilege of any kind and cannot be invoked to escape Chilean law or the Chilean courts.

As for timing, neither article 7 nor the regulation sets a deadline for issuing the decree. The only specific period is the fifteen days for the reports. As a default rule, the administrative procedure law provides that a procedure may not exceed six months from its start to the final decision, save for unforeseeable circumstances or force majeure. That is no guarantee the authorisation will be granted, and a purchase timetable should not be built on it.

If you inherit a property in a border zone

There is a specific rule almost nobody knows. Article 9 of the same decree law provides that, where the article 7 prohibition applies, foreigners may acquire by succession on death for the sole purpose of selling the property, within one year from the death of the deceased. If that period passes without a sale, the property is deemed declared of public utility and the President of the Republic is authorised to expropriate it for the benefit of the state.

The regulation opens a second route: within that same year, the heir who is a national of a neighbouring country may apply for the article 7 authorisation instead of selling. On either route the year runs from the death, not from when the estate is processed, so the estate procedure has to start at once. How it works is in the estate procedure step by step, and the case of a deceased who lived outside Chile in inheriting a Chilean property from abroad.

The sworn statement and the penalties

Article 8 makes notaries and registrars responsible for compliance with article 7, and requires notaries to demand from the parties a written statement, under oath, of their nationality and place of birth. A notary or registrar who fails to comply is sanctioned under the Courts Organisation Code, with loss of office on a repeat offence.

For the buyer, the same article punishes whoever breaches the prohibition by means of false documents, a simulated contract or any similar deceit, with the penalty of minor banishment in its minimum to medium degree. The Criminal Code defines banishment as the expulsion of the convicted person from the territory of the Republic.

As for the validity of the act, the decree law does not expressly declare a purchase made in breach to be void. The general rule of the Civil Code therefore applies, under which acts prohibited by law are void and of no effect, and the Comptroller General has described article 7 as a rule of public order. Which kind of nullity follows is not settled in any official source, and it is an argument best never had.

What the treaties between Chile and Argentina do not change

The Maipú Treaty on integration and cooperation contains no rule on acquiring real property and does not modify article 7. The only express exception between the two countries is in the 1997 treaty on mining integration and complementation, which disapplies nationality based restrictions for mining business governed by that treaty within its area, and only for that business.

Two agreements do help on other fronts. Chile and Argentina have a double tax treaty applied from the 1st of January 2017, which matters when the property is held through a Chilean company. And both are party to the apostille convention, so an Argentine public document only needs the apostille of the Argentine authority to be used in Chile. The table for other nationalities is in buying property in Chile as a foreigner.

Outside the border zone, like any foreigner

Outside the declared zones, an Argentine buys in Chile exactly as any other foreigner does, and as a Chilean does. The Constitution guarantees the freedom to acquire ownership and requires a law passed with a qualified quorum to limit it, and the Comptroller General has rejected restrictions on foreigners in general that lack a legal basis. What you do need is a Chilean tax number and a representative domiciled in Chile before the tax authority, as explained in getting a Chilean RUT without travelling.

The restrictions that still apply are those that reach any buyer: state land near the border and the coast, which article 6 reserves to Chilean persons, and indigenous land, which Law 19.253 protects whatever the nationality of the buyer and which we cover in indigenous land. And before paying, the usual checks, set out in the checks before you wire the money.

How we work on it

The first thing is to answer whether the land is in a border zone, on the registered plan and the official cartography rather than on an impression. If it is outside, the purchase follows the ordinary route. If it is inside, we check whether your case fits the Arica exception and, if it does not, we build the application for authorisation with the items the regulation requires and the investment project where applicable.

The reading of the title and the plan is our title study service. When the title needs work before it can be transferred, our title regularisation service, with a first indication from the regularisation test. And when the property comes from an inheritance, our inheritance service, with the one year period in view from the first day.

Frequently asked questions