National Security Zone (border area) and Nature Reserve Zones: Important information for buyers

National Security Zone: What is the border security area and how does it affect the possibility of buying real estate in these locations?

On many occasions, our clients have heard about the border security areas and this has raised some doubts about the possibility of acquiring real estate in these areas or the conditions for the purchase.

In Paraguay there are so-called border security zones, which are areas delimited by the public authority. The sale of real estate in these areas is subject to certain restrictions.

By means of the Border Security Law No. 2532 of 2005, the Paraguayan State established a border security zone in the areas comprised within the 50-kilometer strip adjacent to the land and river border lines within Paraguayan territory.

The Law consists of the prohibition for those persons originating from countries bordering the Republic of Paraguay or, in the case of legal entities, for those which are composed of a majority of foreigners originating from any of the countries, to become owners, joint owners or beneficial owners of rural properties located in the border security zone.

But under what conditions does the Border Security Law apply?

According to the Law, 2 conditions are required for its application:

1. That the property is considered as "rural", which are properties outside the urban circuit of the border cities.

2. That the potential buyer be a foreigner, a native of the countries bordering Paraguay.

It should be clarified here that this prohibition does not apply to all foreigners, but only to foreigners from countries bordering Paraguay.

This limitation also applies to companies whose capital is mainly made up of foreigners from countries bordering Paraguay.

With this it is clear that the legal limitation on border security zones only applies to Brazilian, Argentinian and Bolivian citizens, since Paraguay has a border with these three countries.

Nature Reserve Zones:

In Paraguay there are numerous natural areas protected by law and they are classified as: National Parks; Protected Landscapes; Biological Reserves; Biosphere Reserves; Biological Refuge; Managed Resources Reserve; Wildlife Refuge and the Private Nature Reserves. It should be noted that the capacity to exploit the land will depend on the classification indicated and the Buffer Zone of the region adjacent to the perimeter of the Protected Area.

According to Law No. 352 of 1994, the Buffer Zone is the parcel of land adjacent to the protected region. These buffer zones vary in size depending on the particularities of each protected area and their delimitation will be indicated in the Management Plan of each Protected Zone.

Why is it important to know if you are buying your property within the Buffer Zone?

If your property is located within the Buffer Zone, for any modification of the property, you must present the environmental impact study, this document is a project prepared by a specialist, which will detail the modifications that will be introduced to the environment and the activities that will be carried out in the Buffer Zone.

The Environmental Authority may request the owner to modify his initial project to adjust it to the Management Plan of the Protected Zone or directly reject the project, according to the environmental protection regulations.

Finally, all good buyers should verify that the property they intend to purchase is not located within the area declared as a protected zone. As we explained in this article, in Paraguay there is a problem regarding land ownership; there are property titles for properties that are within protected areas. These properties are sold by "private contract" and many times, due to ignorance, the buyer ends up acquiring a property that is in a protected area, without any rights over the property he/she has acquired.

For this reason it is important that investors, before acquiring real estate near an environmental protected area, know in detail the exact location of the property and if the property to be acquired is located in the buffer zone, they should also learn about the regulations of the specific Management Plan of the protected area, about the permitted and prohibited activities in the buffer zone.

Here you can check all the protected areas and their extension in this link:

<<http://mades.gov.py/sites/default/files/mapa_actualizado_de_sinasip.pdf>>

If you have any questions, do not hesitate to contact us