by NALC Staff
Since January 2021, almost every state has proposed at least one piece of legislation to prohibit or restrict foreign investments and landholdings in land, particularly private agricultural land, located within the boundaries of their states to some degrees. In fact, over the past few years, the number of states with a foreign ownership law has increased from fourteen to twenty-five. This trend continues in 2025 as the majority of states in the U.S. are considering measures that will enact a foreign ownership law or will amend certain provisions of their states’ foreign ownership law.
This is the fifth article of a series discussing recent state proposals that seek to limit or restrict foreign investments in land. The other articles in this series are available here. This article discusses the proposals introduced in Arkansas.
Background
Arkansas is one of the twenty-five states that has enacted a foreign ownership law, and one of many states seeking to amend certain portions of the state’s restriction. In 2023, the Arkansas state legislature enacted Act 636 (is codified at Ark. Code Ann. §§ 18-11-101(a), -110, 801–805) which established a foreign ownership law to restrict certain foreign investments in real property located within the state. One restriction under Act 636 provides that a “prohibited foreign party” (“PFP”) may not acquire any interest in agricultural land located within the state. The law defines PFP as an individual, business entity, and foreign government of a country subject to the federal International Traffic in Arms Regulations (“ITAR”) and any “Entity of Particular Concern” as designated by the U.S. Secretary of State. Some countries subject to ITAR include China, Iran, North Korea, and Russia.
The other restriction under Arkansas’ Act 636 restricts a “prohibited foreign-party-controlled business” (“PFPCB”) from acquiring any interest in real property located within the state. See Ark. Code Ann. § 18-11-110(b)(1). Under the law, a PFPCB is a “corporation, company, association, firm, partnership, society, joint-stock company, trust, estate or other legal entity whose controlling interest is owned” by a PFP. The law defines “controlling interest” as an interest of 50% or more in the aggregate. Therefore, if a single PFP or multiple PFPs hold, in the aggregate, an interest of at least 50% in a business entity, that entity is classified as a PFPCB. As a result, this entity is prohibited from acquiring an interest in any Arkansas real property. An in-depth discussion of Arkansas’ foreign ownership law is available on NALC’s website here and here.
Arkansas became the first in the nation to enforce a state foreign ownership law when the state’s attorney general ordered a subsidiary of Syngenta Seeds—which is a Chinese-owned company—to divest itself of farmland it owned within the state. Also, Jones Eagle, LLC, a data center business operating to mine digital assets has filed a lawsuit (Jones Eagle LLC v. Arkansas Department of Agriculture, et al., No. 4:24-cv-00990 (E.D. Ark. 2024)) against the state of Arkansas alleging the state’s foreign ownership law violates the United States Constitution. A federal court in Arkansas has issued a preliminary injunction in favor of Jones Eagle, preventing the state from initiating an enforcement action against the business until further notice from the court. An article discussing this lawsuit is available on NALC’s website here.
2025 Legislative Session
During the current legislative session, the Arkansas state legislature is seeking to amend certain portions of the state’s foreign ownership law. Specifically, the state legislature is considering House Bill 1680 (“HB 1680”), which will restrict a PFP and PFPCB from holding any interest in land, including public or private agricultural land, located within a ten-mile radius of critical infrastructure located within the state. The bill defines “critical infrastructure” as a physical or virtual system or asset that if “incapacitated or destroyed would have a debilitating impact on security, national economic security, public health or safety,” including military installations, power transmitters, utilities, railways, communication technology or facility, and cybersecurity information storage systems.
While the current statute restricts PFPs and PFPCBs from acquiring Arkansas land, including agricultural land, this added restriction is most likely intended to restrict PFPs that are resident aliens from acquiring land near critical infrastructure located within the state. Arkansas’ foreign ownership law exempts a PFP who is a resident alien from the restriction. In other words, a non-U.S. citizen who is a PFP but legally residing in the U.S. may acquire and hold agricultural land located within the state. Therefore, if enacted, HB 1680 would likely prohibit PFP resident aliens from acquiring farmland within 10 miles of critical infrastructure.
Although Arkansas’ law permits PFP resident aliens to hold agricultural land located within the state, these foreign landholders have two years to divest of their interest in agricultural land when they are no longer a resident alien. HB 1680 seeks to amend this provision by requiring a PFP who is no longer a resident alien to divest of their agricultural landholdings within one year.
Last, HB 1680 also seeks to clarify that PFPs and PFPCBs are prohibited from leasing land and agricultural land within the state. The statute current prohibits these foreign investors from acquiring land or farmland by “grant, purchase, devise, descent, or otherwise…” See Ark. Code Ann. §§ 18-11-110(b)(1); 18-11-803(a)(1). HB 1680 will amend this restrictive language by including the word “lease” in an attempt to prohibit PFP and PFPCB leaseholds of land located within the state.
This measure has been referred to the Arkansas House Committee on Agriculture, Forestry & Economic Development for consideration. At this stage, the committee can review the bill, hear testimony in support and opposition of the bill, amend the bill, pass the bill for consideration by its respective chamber, or vote to fail passage of the bill out of committee.
The Arkansas state legislature is also considering Senate Bill 317 (“SB 317”). While this measure is not a foreign land ownership law, it does prohibit an institution of higher education in Arkansas from participating in certain activities with a PFP, such as (1) conducting classified research and agricultural research under a contract, (2) selling agricultural products, including seeds, (3) engaging in the production of agricultural products, and (4) entering into a nondisclosure agreement. It is unclear what type of research is considered “classified” because SB 317 does not define the term. On March 6, 2025, the Arkansas Senate passed SB 317 and measure is now be considered by the House.
Conclusion
Over the past few years, the issue of restricting foreign ownership and investments in real property, particularly agricultural and forestland, has emerged or reemerged in almost every state. In fact, fourteen states in 2024 enacted a foreign ownership law or amended its foreign ownership law. So far in 2025, this trend has continued as most states have introduced at least one piece of foreign ownership legislation in their state.
NALC will provide an update to this article as S. 845 and H.R. 1629 advance through the legislative process.
To read NALC articles discussing foreign investments in U.S. agriculture, click here.
To learn more about foreign ownership of U.S. land, click here.
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