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 seventh 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 North Carolina.

North Carolina is one of several states that do not limit or restrict foreign investments in real property located within the state. In fact, the state’s code expressly permits “aliens to take…any lands,…and to hold and convey the same as fully as citizens of” the state. N.C. Gen. Stat. Ann. § 64-1. However, the North Carolina state legislature is considering House Bill 133 (“HB 133”) which seeks to restrict certain foreign investments in certain real property. Specifically, this measure will prohibit an adversarial foreign government from acquiring or holding any interest, including a leasehold interest, in agricultural land and land within a 75-mile radius of a military installation.

HB 133 defines “adversarial foreign government” as a government or government-controlled business entity of a country or group subject to International Traffic in Arms Regulations (“ITAR”) as provided under 22 C.F.R. § 126. Some countries subject to ITAR include China, Iran, North Korea, and Russia. Foreign business entities that have been identified by the Committee on Foreign Investment in the U.S. (“CFIUS”) as not being a risk to U.S. national security and entities that have a national security agreement with CFIUS are exempt from the foreign ownership restriction under HB 133.

Any transaction that provides an adversarial foreign government an interest in land in violation of this restriction is void, meaning the transaction is treated as if it never happened. Further, HB 133 does not require an individual or entity to investigate or determine whether a party to a transaction is an adversarial foreign government. These individuals and entities will not face civil or criminal liability for failing to determine whether a buyer or tenant of agricultural land or land within a 75-mile radius of a military installation is an adversarial foreign government.

The state legislature is also considering Senate Bill 504 (“SB 504”), which contains almost identical language to HB 133. HB 133 has been referred to the Committee on Homeland Security and Military of the House and Veterans Affairs for consideration and SB 504 has been referred to the Committee on Rules and Operations of the Senate. 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 North Carolina state legislature is also considering Senate Bill 338 (“SB 338”), which contains very similar language to HB 133 and SB 504; however, there are some differences between these measures. SB 338 defines “adversarial foreign government” as government or government-controlled business entity of a country designated as a “foreign adversary” by the U.S. Secretary of Commerce. Currently, the countries deemed as foreign adversaries include China, Cuba, Iran, North Korea, Russia, and Venezuela’s Maduro Regime. See 15 C.F.R. § 791.1(a). Accordingly, SB 338 restricts a narrower set of governments and government-controlled businesses because there are several more countries subject to ITAR compared to the countries designated as foreign adversaries.

Like HB 133 or SB 504, SB 338 restricts adversarial foreign governments from acquiring any interest in agricultural land located within the state of North Carolina. However, SB 338 prohibits these restricted foreign governments from acquiring land within a 25-mile radius of military installations located within the state, rather than a 75-mile radius as proposed under HB 133 and SB 504.

SB 338 has been referred to the Committee on Rules and Operations of the Senate.

Another piece of foreign ownership legislation considered by the North Carolina state legislature is Senate Bill 394 (“SB 394”). This measure will restrict a prohibited foreign party (“PFP”) of an adversarial nation—which includes China, Iran, North Korea, and Russia—from acquiring any interest, including leasehold interests, in agricultural land, land within 25 miles of a military installation, and land situated underneath special use airspace designed by the Federal Aviation Administration. SB 394 defines PFP as an individual, business entity, or government of an adversarial nation. Entities, including U.S. entities, are considered PFPs where a significant interest or substantial control is directly or indirectly held by a PFP.

Specifically, a PFP has a “significant interest or substantial control” when they hold 33% or more interest in an entity. In other words, if a Russian citizen holds a 33% interest in a U.S. business, that business is a PFP and is prohibited from acquiring North Carolina agricultural land. Furthermore, multiple PFPs have a significant interest or substantial control of an entity when they hold, in the aggregate, a 33% or more interest and are “acting in concert.” Two or more PFPs that “may not be acting in concert” have a significant interest or substantial control in an entity when they hold an interest of 50% or more.

Entities that have a national security agreement with CFIUS and maintain this agreement are not considered PFPs under SB 394. Also, PFPs that are resident aliens of the U.S. are not subject to the restriction under this legislation. However, once a PFP resident alien is no longer a legal resident alien of the U.S., they are required to divest of any interest they hold in agricultural land, land within a 25-mile radius of a military installation, and land under special use airspace located within the state.

This bill will permit PFPs to acquire land through inheritance and enforcement of a security interest; however, they must divest of this interest within 3 years after acquiring the land. Further, purchasers of land are required to sign an affidavit stating (1) they are not a PFP and (2) their purchase does not violate the restriction provided under SB 394. This measure permits the state’s attorney general to bring a forfeiture action against PFPs that violate the prohibition. If a court determines a violation has occurred, it will order the land be sold through a public auction.

Additionally, PFPs that violate the restriction under SB 394 are guilty of a Class 2 misdemeanor that carries a penalty of up to 60 days imprisonment and a $1,000 fine. Individuals and entities that knowingly sell land to a PFP are also guilty of a Class 2 misdemeanor.

Last, SB 394 permits PFP that acquired real property before the effective date of the measure, but these investors must register their landholdings with the North Carolina Secretary of State and Attorney General. PFPs that fail to register are subject to a civil penalty of up to $1,000 for each day the registration is late.

SB 394 is currently being considered by Senate Committee on the Judiciary.

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. In 2025, this trend has continued as most states have introduced at least one piece of foreign ownership legislation in their state. So far in 2025, three states—Kentucky, Idaho, and Utah—have enacted or amended certain portions of its states’ foreign ownership law. NALC is tracking each states’ foreign ownership proposals and will update this Statutes Regulation Ownership of Agricultural Land compilation when there are changes to a state’s law.

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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