Foreign ownership

From Wikipedia, the free encyclopedia

Foreign ownership refers to the ownership of a portion of a country's assets (businesses, natural resources, property, bonds, equity etc.) by individuals who are not citizens of that country or by companies whose headquarters are not in that country.[1]

Foreign ownership of assets is widespread in a modern, globally integrated economy, at both the corporate and individual levels. An example of the former is when a corporation acquires part, or all, of another company headquartered overseas, or when it purchases property, infrastructure, access rights or other assets in countries abroad.[2] If a multinational corporation acquires at least half of a foreign company, the multinational corporation becomes a holding company, and the company receiving the foreign investment becomes a subsidiary.[3]

At the individual level, foreign ownership occurs whenever a domestic asset is acquired by a foreign individual, such as an Indian businessman buying a house in Hong Kong, or a Russian citizen purchasing United States Treasury bonds.[4]


  • The transfer of technology and organisational knowledge can lead to higher productivity,[5] and the company in the host country can learn from multinational corporations.[6]
  • It increases employment and wages, as inward foreign direct investment has an overall positive effect in employment, given that companies have more capital to expand.[7]
  • It lowers prices and improves the quality of products as a result of higher productivity, which is beneficial for consumers and the company's competitiveness for exports.[8]


  • Foreign ownership can increase the demand of products, leading to price increases.[9]
  • The increase in productivity in the firms in foreign ownership can cause other domestic companies to become relatively less competitive, which reduces profits.[10]
  • Multinational corporations may use their power to influence government policies, especially in underdeveloped countries, which may have an adverse impact on economic development.[11]
  • Lowering of employment because of operational optimization or an increase by a planned expansion can occur. Wages can be reduced for new employees by new corporate policies, and an optimized employee benefits package can reduce benefits for all.
  • The demise of local economies can be caused by siphoning money from communities to global elites.


Map of United States Official Language Status By State
Map of countries where foreign land ownership is banned as of 2023


According to the legislation of Belarus, a foreign citizen cannot own land, and only has the right to rent it.[12][13]


Under Article 44 of the Cambodian Constitution, “only natural persons or legal entities of Khmer nationality shall have the right to land ownership.” Foreigners are prohibited to own or possess land in Cambodia.[14][15]


Land in China is state-owned or collectively owned. Enterprises, farmers, and householders lease land from the state using long-term leases of 20 to 70 years.[16] Foreign investors are not allowed to buy or own land in China.


Since 2017, a ban on foreigners owning farmland was introduced in Georgia's new constitution. The new constitution states that, with a few exceptions, agricultural land can only be owned by the state, a Georgian citizen, or a Georgian-owned entity.[17][18][19][20]


The House of Representatives of Indonesia passed the plantation bill to set stricter rules on foreign ownership in the plantation sector to prioritise smaller local plantation firms. There is no specific percentage value on the limit on foreign ownership, but a 30% foreign ownership ceiling had been demanded by the House's Commission IV.

Plantation business groups as well as the Ministry of Agriculture had previously voiced criticism of the bill, expressing concern that it would negatively impact plantation firms and growers, as foreign investment might be reduced.

Even though the bill was passed to limit foreign ownership, the law encourages cooperation in research and development between domestic and foreign businesses, universities, and individuals.

A reduction in foreign ownership limit may reduce foreign investment, but it can help boost revenue for domestic firms and economic development.[21]

Government Regulation No. 14 of 2018 limited foreign ownership in insurance companies to 80%. However, this rule is not applied retroactively for insurance companies with foreign ownership higher than 80% at the time of its implementation date of 20 January 2020.[22]


Approximately 7% of the allocated land in Israel is privately owned. The rest, i.e., 93%, is owned by the State and is known as “Israeli Land”. Israel’s Basic Law on real estate states that Israel’s land is jointly owned by the State (69%), the Development Authority (12%), and the Jewish National Fund (12%).


Foreigners are not allowed to own freehold land in Indonesia.[23][24] Foreign investors can legally hold leasehold titles under Right-To-Use (Hak Pakai) or building rights (Hak Guna Bangunan). This is based on Part 5 Article 36 Paragraph 1b of the Agrarian Law No 5 of 1960.[25]


In 2021, President Kassym-Jomart Tokayev signed into law a bill that bans the selling and leasing of agricultural land to foreigners.[26][27][28]


Foreigners in Kuwait except GCC nationals are prohibited from land ownership.


Foreigners are prohibited from permanent ownership of land. Foreigners can only lease land for a period of up to 30 years.[29][30]


Foreigners are not allowed to own freehold land in the Maldives. The land can only be leased to foreigners for 99 years.[31][32]


Only Mongolian citizens can own the land within the territory of Mongolia. Foreign citizens can only lease the land.[33][34][35]


Though purchase of land is not permitted to foreigners, a real estate investor may apply for a 70-year leasehold with a Myanmar Investment Commission (MIC) permit.[36]


Foreign citizens and companies are prohibited from fully owning land in the Philippines under the 1987 Constitution.[37][38][39]

There is also a 40 percent cap imposed on foreign ownership of companies, with exemptions such as firms engaged in the telecommunications, airlines, shipping, railways and irrigation sectors.[40] An exemption also applies to the renewable energy sector.[41]


As part of financial reforms, Qatar's emir has issued a law, allowing foreign investors to obtain up to 49% of listed Qatari companies for expansion in the stock market and to stimulate development in the financial industry.

Prior to the law, ceilings on listed Qatari firms restricted foreign ownership to 25%.

The reform aims to help attract more foreign investment in the long run. However, according to a wealth manager in the Gulf, "It's a step in the right direction, but it will have to be backed up by good performance from companies in order to attract foreign investment. Also, there should be limited impact from the law in the short term due to liquidity issues and limited numbers of shares available."[42]


In 2014, the Russian Duma passed a law reducing the foreign ownership ceiling for print publications and radio and television outlets from 50% to 20%; it was passed with a vote of 430-2. The legislation, which came into force in 2016, forbids foreign governments, organisations, companies, and individuals from founding or holding more than a 20% stake in Russian media businesses.

According to Vadim Dengin, one of the bill's authors, "the tighter limit on foreign ownership would help protect Russia from western influence."[43] However, publishers and editors of independent media companies in Russia argued that the new law would further reduce diversity of opinion.

Sri Lanka[edit]

In 2014, the Sri Lankan parliament passed a law banning land purchases by foreigners. The new act allows foreigners to acquire land only on a lease basis of up to 99 years, with an annual 15 percent tax on the total rental paid upfront.[44][45][46][47]


In Thailand, foreigners are prohibited to own or possess land.[48]


Foreigners cannot buy and own land, like in many other Southeast Asian countries. Instead, the land is collectively owned by all Vietnamese people, but governed by the state. As written in the national Land Law, foreigners and foreign organizations are allowed to lease land. The leasehold period is up to 50 years.[49][50]

See also[edit]


  1. ^ Cambridge Business English Dictionary. Cambridge University Press. 28 November 2011. ISBN 978-0521122504.
  2. ^ Chau, Esther; Wu, Jayce (2013). Economics HL/SL - Study Guide for the IB Diploma. CANA Academy Limited. p. 166. ISBN 978-9881686824.
  3. ^ "Definition of subsidiary - Oxford Dictionaries (British & World English)". Oxford Dictionaries. Archived from the original on 17 July 2012. Retrieved 23 October 2014.
  4. ^ Royse, Roger. "Foreign Ownership of U.S. Real Estate". Royse Law Firm. Retrieved 23 October 2014.
  5. ^ "Impacts of Technological Change on Productivity". Boundless. Boundless. {{cite web}}: Missing or empty |url= (help)
  6. ^ Grimsley, Shawn. "What Is Foreign Direct Investment? - Definition, Advantages & Disadvantages". Education Portal. Education Portal. Retrieved 23 October 2014.
  7. ^ "Foreign ownership and consequences for British business" (PDF). Economic & Social Research Council. Economic & Social Research Council. Archived from the original (PDF) on 13 February 2015. Retrieved 23 October 2014.
  8. ^ Blink, Jocelyn; Dorton, Ian (6 September 2012). IB Economics Course Book 2nd edition: Oxford IB Diploma Programme (International Baccalaureate). OUP Oxford. ISBN 978-0198390008.
  9. ^ Heakal, Reem. "Economics Basics: Supply and Demand". Investopedia. Investopedia US. Retrieved 23 October 2014.
  10. ^ Chau, Esther; Wu, Jayce (2013). Economics HL/SL - Study Guide for the IB Diploma. CANA Academy Limited. p. 167. ISBN 978-9881686824.
  11. ^ "The Impact of Direct Foreign Investment on Wages and Working Conditions" (PDF). OECD. Organisation for Economic Co-operation and Development. Retrieved 28 May 2017.
  12. ^ "How can a foreigner buy property in Belarus". Legal Office "Leshchynski Smolski".
  13. ^ "Property in Belarus | Belarusian Real Estate Investment".
  14. ^ "Can Foreigners Own Land in Cambodia? Here's How". October 2020.
  15. ^ "Can foreigners buy real estate in Cambodia? The 4 titles you must know". 16 September 2020.
  16. ^ Stuart Leavenworth and Kiki Zhao (31 May 2016). "In China, Homeowners Find Themselves in a Land of Doubt". The New York Times. Retrieved 1 June 2016. All land in China is owned by the government, which parcels it out to developers and homeowners through 20- to 70-year leases.
  17. ^ "Georgia's ban on foreign landowners leaves farmers in limbo". Reuters. 17 April 2019.
  18. ^ "Georgia Keeping Its Land Off-Limits for Foreigners | Eurasianet".
  19. ^ "Land reform - land settlement and cooperatives - Special Edition".
  20. ^ "Georgia temporarily lifts ban on sale of agricultural land to foreign citizens". 7 December 2018.
  21. ^ The Jarkata Post (30 September 2014). "New plantation law limits foreign ownership". The Jakarta Post. The Jakarta Post. Retrieved 25 October 2014.
  22. ^ Saleh, Tahir (27 January 2020). "Sah! Asing Boleh Punya Lebih 80% Saham Perusahaan Asuransi RI". CNBC Indonesia (in Indonesian). Retrieved 24 February 2022.
  23. ^ "Buying Property in Indonesia | How to Buy a House in Indonesia". 19 October 2018.
  24. ^ "Foreign Ownership of Land and Property in Indonesia - BALI REALTY".
  26. ^ "Kazakh President Signs into Law Long-Debated Bill Banning Land Ownership by Foreigners".
  27. ^ "Kazakhstan Bans Sale of Agricultural Lands to Foreigners".
  28. ^ "Kazakh president orders ban on foreign ownership of farmland". Reuters. 25 February 2021.
  29. ^ "Laos Opens Real Estate Investment Opportunities to Foreigners". 15 October 2020.
  30. ^ "Want to Invest in Laos? Here's Why You Shouldn't". 10 August 2017.
  31. ^ "Maldives parliament repeals law allowing foreign land ownership". Reuters. 18 April 2019.
  32. ^ "Maldives parliament repeals law allowing foreign land ownership - ET RealEstate".
  33. ^ "Land Law of Mongolia".
  34. ^ "Buying property in Mongolia". March 2017.
  35. ^ "FAQs". 10 October 2015.
  36. ^ "Buying property in Myanmar". 21 March 2017.
  37. ^ "Can foreigners own land in the Philippines?". Manila Standard.
  38. ^ "Real estate regulations in the Philippines". 7 April 2016.
  39. ^ "Solon pushes for limited land ownership for foreigners". CNN Philippines. 13 January 2024. Archived from the original on 13 January 2021. Retrieved 13 January 2024.
  40. ^ "Philippines to allow full foreign ownership in telecoms, airlines, shipping". Reuters. 22 March 2022. Retrieved 13 January 2024.
  41. ^ "DoE opens RE to full foreign ownership". BusinessWorld. 16 November 2022. Retrieved 13 January 2024.
  42. ^ Bakr, Amena; Torchia, Andrew (6 August 2014). "UPDATE 1-Qatar emir issues law raising foreign ownership limits for stocks". Reuters. Thomson Reuters. Retrieved 24 October 2014.
  43. ^ Luhn, Alec (26 September 2014). "Russia tightens limit on foreign ownership of media". The Guardian. Guardian News and Media Limited. Retrieved 25 October 2014.
  44. ^ "Sri Lanka enacts ban on foreigners buying land". Reuters. 21 October 2014. Retrieved 16 February 2022.
  45. ^ "Sri Lanka passes law banning sale of land to foreign citizens | Tamil Guardian". Retrieved 16 February 2022.
  46. ^ "Citizen or Not: The Process and Concerns of Buying Property in Sri Lanka as an Expat". CeylonToday. Archived from the original on 16 February 2022. Retrieved 16 February 2022.
  47. ^ "A guide for foreigners wanting to buy real estate in Sri Lanka". The New Sri Lankan House. Retrieved 16 February 2022.
  48. ^ "Thai real estate laws for foreigners".
  49. ^ "Can foreigner buy property in Vietnam?". 12 September 2019.
  50. ^ "How to Buy Property in Vietnam: The Ultimate Guide". 30 January 2019.