1. State Restrictions

There are numerous state laws affecting foreign investment in natural resources. Generally, these state laws impose restrictions on the investment in land by foreign corporations. Over half of the states have enacted legislation that limits the ownership or inheritance of land by foreign corporations. Additionally, states rich in specific resources (like states rich in farm land or minerals) impose more stringent requirements and restrictions on foreign investors. For example, Oklahoma's State Constitution restricts aliens from directly or indirectly acquiring title to land or owning land in the State of Oklahoma. OK Const. Art. 22, § 1. Additionally, other Oklahoma statutes prohibit the formation or licensing of foreign corporations for the purpose of engaging in farming or ranching, or for the purpose of owning or leasing any interest in land to be used for farming or ranching. Domestic corporations may engage in these activities, subject to certain restrictions. Okla. Stat. Ann. tit. 18, §§ 951(A)(1) to 951(A)(4).

There is also state legislation that restricts investments by domestic corporations controlled by nonresident aliens. Which country or state the business is incorporated in determines whether the corporation is foreign or domestic. Also note that "foreign corporations" are corporations formed outside the state and include corporations in other states and countries. The phrase "alien corporation" refers to a corporation formed in another country exclusively. Many states statutorily treat alien corporations as foreign corporations. Many states also restrict the investment of land by corporation type, by whether the corporation must formally qualify to do business, and by the extent necessary to carry out its corporate purpose. For example, under Ohio Rev. Code Ann. § 1703.01(B) and Ohio Rev. Code Ann. § 1703.01(C), alien corporations are treated as foreign corporations.

Thirty states currently have laws that restrict foreign interests in real estate. Some of these laws apply specifically (or exclusively) to investments in agricultural land. Iowa has enacted restrictions that are exclusively applied to agricultural land. Nonresident aliens, foreign businesses and foreign government may not purchase or otherwise acquire agricultural land in the state of Iowa. I.C.A. § 9I.3. Similarly, California law restricts public lands leases, requiring that leases and prospecting permits for public lands can be issued only to persons who are citizens of the United States, or who have declared the intention of becoming citizens, or whose country grants such rights by reciprocity, or who are granted the right by treaty. Cal. Pub. Res. Code § 6801(a), (c). Hawaii has a similar provision, restricting the purchase or lease of residence lots on Oahu (which must be purchased or leased from the Board of Land and Natural Resources) to United States citizens or declarant aliens who have resided in Hawaii for at least five years. Haw. Rev. Stat. § 206-9(c)(1).

Finally, certain states impose specific mining and exploration restrictions.

2. Reporting Requirements

There may also be reporting requirements.

On a federal level, the Agricultural Foreign Investment Disclosure Act requires a foreign person (whether an individual or an organization) that wishes to invest in United States agricultural land (land located in one or more states and which is used for agricultural, forestry, or timber production) must report certain acts and transactions to the Secretary of Agriculture. The Secretary may impose civil penalties for improper reporting. Under the International Investment Survey Act of 1976, any foreign person who establishes or acquires a new direct investment, including an investment in real estate, is required to file certain forms and supply certain information to the United States Commerce Department.

Some states have additional reporting requirements. For example, the acquisition of any interest in agricultural land in Arkansas by a foreign party must be registered with the Secretary of State of the county where the land is located. Ark. Code Ann. § 2-3-103(a)(1)(A). A "foreign party" includes nonresident aliens, foreign governments, entities created under the laws of a foreign government, and domestic entities, in which a significant interest or not insubstantial control is directly or indirectly controlled by a foreign party, with some exceptions. Ark. Code Ann. § 2-3-102(4). Similarly, in Illinois, a foreign land holder must file a report as to any holding and any acquisition or transfer of any interest in agricultural land (including a nonresident alien individual, a foreign government, a business entity formed in a foreign country or which has its principal place of business outside the United States, or a domestic business entity in which a significant interest or substantial control is, directly or indirectly, held by specified foreign persons and entities). See 765 Ill. Comp. Stat. Ann. §§ 50/1 to 50/8. Under Ohio Rev. Code Ann. § 5301.254, nonresident aliens who acquire an interest in Ohio property in excess of three acres (or that has a market value in excess of $100,000, or any mineral or mining rights with a market value in excess of $50,000) must file a report with the Secretary of State. Sale of the land interest must also be reported, and these reports are public. Id.