The Legalities of Buying Property Within 50km of the Border: What Foreigners Must Know in Peru

As a licensed Peruvian real estate broker specializing in foreign investment, I frequently guide our clients through the intricacies of property acquisition in Peru. While Arequipa offers myriad opportunities outside the immediate scope of border restrictions, it is imperative for any foreign investor considering property anywhere in Peru to understand one of the most significant constitutional limitations: the prohibition of foreign ownership within 50 kilometers of the country's borders. This isn't a mere administrative hurdle; it's a constitutional mandate with profound implications, and navigating it requires rigorous due diligence and expert legal counsel.

Understanding the Constitutional Restriction: Article 71

The cornerstone of this restriction is Article 71 of the Political Constitution of Peru. This article explicitly states:

“Foreigners, whether individuals or legal entities, cannot acquire or possess, by any title, mines, lands, forests, waters, fuel, or energy sources, either directly or indirectly, individually or as a company, within fifty kilometers of the borders, except in case of public necessity declared by supreme decree approved by the Council of Ministers.”

Let's break down the critical elements of this constitutional dictate:

Who is Affected? "Foreigners, whether individuals or legal entities." This means any non-Peruvian citizen, or any company where the beneficial ownership is ultimately foreign, is subject to this rule. The "directly or indirectly" clause is crucial, preventing workarounds through shell companies that are ultimately foreign-controlled.
What is Prohibited? "Mines, lands, forests, waters, fuel, or energy sources." Essentially, all types of real estate and natural resources.
Where is it Prohibited? "Within fifty kilometers of the borders." This refers to any international land border Peru shares with Ecuador, Colombia, Brazil, Bolivia, or Chile, as well as the maritime border.
The Absolute Nature: The prohibition is categorical. Any acquisition in violation of this article is considered null and void from its inception (nulidad de acto jurídico), carrying severe risks for the investor.

The rationale behind Article 71 is national security and sovereignty. It aims to prevent foreign control over strategic territories and resources close to sensitive border regions.

The Sole Exception: Declaración de Necesidad Pública (Declaration of Public Necessity)

The only permissible path for a foreigner to acquire property within the 50km border zone is through a "Declaration of Public Necessity" (Declaración de Necesidad Pública) issued by a Supreme Decree and approved by the Council of Ministers.

What Constitutes "Public Necessity"?

This exception is not easily granted and is typically reserved for projects of national strategic interest, such as:

Large-scale infrastructure projects (e.g., a major port, highway, or energy facility).
Significant industrial or agricultural developments that are deemed crucial for national economic growth or social welfare.
Major tourism investments that are part of a national development plan and require a specific location within the border zone.

It is highly improbable, bordering on impossible, for a foreign individual seeking to purchase a residential home or a small commercial plot for personal use or a modest business to obtain such a declaration. This process is designed for substantial, state-sanctioned investments.

The Process for a Declaration of Public Necessity (Conceptual Steps):

If you represent a large entity pursuing a project of undeniable national significance, the theoretical process would involve:

Initiation: The interested foreign entity submits a formal request to the Ministry of Foreign Affairs (Ministerio de Relaciones Exteriores).
Detailed Project Proposal: This must include comprehensive plans outlining the project's scope, its economic and social benefits, its strategic importance to Peru, the precise location of the property, and why that specific location within the border zone is indispensable.
Inter-Ministerial Evaluation: The request and proposal would then undergo rigorous review by various relevant ministries, which may include the Ministry of Defense, Ministry of Energy and Mines, Ministry of Economy and Finance, Ministry of Foreign Trade and Tourism, and others, depending on the nature of the project. Each ministry assesses the project's compliance with their respective regulations and its alignment with national interests, particularly concerning security and sovereignty.
Opinion from Joint Command of the Armed Forces: Given the national security implications, the Joint Command of the Armed Forces (Comando Conjunto de las Fuerzas Armadas) will provide a mandatory opinion.
Approval by Council of Ministers: If all ministerial evaluations are positive and the project is deemed to meet the strict criteria of "public necessity," the proposal is then presented to the Council of Ministers for their deliberation and approval.
Issuance of Supreme Decree: Upon approval, a Supreme Decree is issued, formally declaring the public necessity and authorizing the foreign acquisition of the specific property for the defined project. This decree is then published in the official gazette, El Peruano.

Practical Reality: This is a lengthy, complex, and politically sensitive process that can take many months, if not years, and success is far from guaranteed. For the vast majority of foreign investors, particularly those considering residential or small-to-medium commercial ventures, relying on this exception is not a viable strategy.

Practical Implications for Foreign Investors

For anyone considering real estate investment in Peru, the border zone restriction demands absolute diligence.

Due Diligence is Paramount: Verify Location First

Before even considering property details, pricing, or potential, your absolute first step must be to verify the property's geographical location relative to any border. This is non-negotiable.

Geographical Verification Tools & Professionals:

To accurately determine if a property falls within the 50km border zone, you will need to utilize specialized tools and engage qualified professionals:

S.U.N.A.R.P. (National Superintendency of Public Registries) Information: While S.U.N.A.R.P. primarily registers property rights, a Certificado Registral Inmobiliario (CRI) will contain the property's unique registration number, technical description, and often reference to cadastral plans. However, S.U.N.A.R.P. itself does not provide "border zone clearance."
Municipal Cadastral Maps (Planos Catastrales): The local municipality (municipalidad) where the property is located is the primary source for cadastral maps. These maps detail property boundaries, precise coordinates, and often show geographical features.
Professional Land Surveyor (Ingeniero Agrimensor or Ingeniero Civil especializado en topografía): This is perhaps the most critical professional to engage. A licensed Peruvian surveyor will:
- Conduct a physical survey of the property.
- Establish precise GPS coordinates for the property's boundaries.
- Calculate the exact distance from the property to the nearest international border using official georeferencing data.
- Provide a formal report and certified plans that definitively state whether the property is within the 50km zone. Their expert opinion is legally defensible.
Specialist Legal Counsel: A lawyer specializing in real estate and administrative law, particularly with experience in border zone regulations, is indispensable. They will review all documentation, interpret legal precedents, and advise on any potential risks or the (unlikely) path of "public necessity."

Risk Assessment: The Dire Consequences of Non-Compliance

Acquiring property within the prohibited border zone without a Supreme Decree of Public Necessity carries severe risks:

Nullity of the Transaction: The sale contract (Contrato de Compraventa) and subsequent property registration will be declared null and void. This means the ownership was never legally transferred.
Loss of Investment: You stand to lose your entire investment (purchase price, taxes, fees, improvements) with little to no legal recourse to recover funds, as the transaction was constitutionally invalid from the start.
Legal Challenges: You could face legal challenges from the Peruvian State, neighboring property owners, or even third parties, resulting in prolonged and costly litigation.
Reputational Damage: For corporate investors, such a legal misstep can severely damage your standing and future investment prospects in Peru.

Alternatives for Foreign Investors in Border Zones (If Direct Ownership is Not Possible)

If your business or investment strategy absolutely requires presence within a border zone, but your project does not meet the "public necessity" criteria, you might explore alternatives that do not constitute direct or indirect ownership of the land:

Leasing/Rental Agreements: Foreigners are generally permitted to lease or rent property within border zones, provided the lease does not grant them any ownership rights over the land or its inherent resources (mines, water, etc.) and it's for a limited duration. This is a common strategy for commercial operations or temporary residential needs. The lease agreement should be carefully drafted and reviewed by a Peruvian lawyer to ensure it complies with all relevant laws and does not inadvertently grant prohibited ownership interests.
Partnerships with Peruvian Entities: In some cases, a foreign investor might partner with a Peruvian company that does own the land (outside the 50km limit) or has secured a valid lease within the border zone. However, if the foreign capital directly or indirectly controls the Peruvian entity primarily for the purpose of circumventing Article 71, this could still be challenged. The "indirectly" clause is broad and aims to prevent such circumvention.

Step-by-Step Guide for Verifying Border Zone Status

Here’s a simplified yet critical procedure to follow for any property you consider in a region that might be near a border:

Step 1: Preliminary Location Check.
- Use online mapping tools (Google Maps, OpenStreetMap) to get a rough idea of the property's proximity to a border. This is for initial screening only; it is not legally binding.
- Identify the nearest international border point.
Step 2: Obtain Official Cadastral Information.
- Request official cadastral plans and information from the local municipality (municipalidad) where the property is located.
- Look for the property's unique cadastral code (código catastral) and official coordinates.
Step 3: Engage a Professional Land Surveyor.
- Crucial Step. Commission a licensed Peruvian land surveyor.
- Provide them with the property's registration details and cadastral information.
- The surveyor will visit the site, take precise GPS readings, and, most importantly, calculate the exact distance from the property's boundaries to the nearest international border using official georeferencing data.
- Request a formal, signed, and stamped report from the surveyor clearly stating whether the property falls within the 50km prohibited zone. This report is your primary technical proof.
Step 4: Consult a Specialist Peruvian Real Estate Lawyer.
- Absolutely Essential. Present the surveyor's report, cadastral information, and S.U.N.A.R.P. records (Certificado Registral Inmobiliario - CRI) to a lawyer with expertise in Peruvian real estate law and border regulations.
- The lawyer will review all documentation, confirm the legal interpretation of the surveyor's findings, and advise on any further necessary steps or potential risks. They are crucial for ensuring legal compliance and protecting your investment.
Step 5: Review S.U.N.A.R.P. Records (Certificado Registral Inmobiliario - CRI).
- While not directly providing border zone clearance, the CRI offers vital information on the property's legal status, registered ownership, encumbrances, and exact technical description, which your lawyer and surveyor will need for a comprehensive assessment.

Local Context & Warning (Relevant for all Peru, not just Arequipa)

While Arequipa itself is comfortably outside any border zone, many regions in Peru, particularly in the south (e.g., parts of Tacna, Puno, Madre de Dios) and north (e.g., parts of Tumbes, Amazonas, Loreto), are directly affected by Article 71.

Rigor of Peruvian Law: Unlike some regulations that might have bureaucratic workarounds, Article 71 is a constitutional imperative. Peruvian courts and authorities will uphold this law strictly. Ignorance of the law is not an excuse, and attempting to circumvent it will result in severe penalties.
Informal Properties: Be extra wary of informal or unregistered properties, especially common in rural or remote border areas. Without clear cadastral data and S.U.N.A.R.P. registration, verifying the 50km rule becomes exponentially harder and riskier. Never proceed with a purchase without fully registered titles and a professional survey.
Broad Interpretation of "Indirectly": The "directly or indirectly" clause in Article 71 is designed to be broad, preventing foreigners from using Peruvian proxies or corporate structures to achieve what is constitutionally prohibited. Any scheme perceived as an attempt to bypass this fundamental law will likely be met with strong legal challenge by the State.

Verifiable Details for Planning

Currency: Peruvian Sol (PEN). As of late 2023 / early 2024, the exchange rate typically hovers around 3.7 PEN to 1 USD, though this fluctuates.
Surveyor Fees: Engaging a qualified land surveyor can range from $300 to $1,500 USD or more, depending on the property's size, complexity, and remoteness. This is a critical investment.
Legal Fees: Specialist legal counsel for due diligence and advice on complex issues like border zone restrictions will vary widely based on the lawyer's experience and the complexity of your case. Budget accordingly for this essential service.
Property Transfer Tax (Alcabala): Generally 3% of the property's value exceeding 10 Unidades Impositivas Tributarias (UIT). The UIT value changes annually (e.g., PEN 5,150 for 2024).
Annual Property Tax (Impuesto Predial): Paid to the municipality, with graduated rates typically from 0.2% to 1% of the property's assessed value, depending on the value bracket.

Understanding and respecting Peru's constitutional limitations regarding border zone property is not just a matter of compliance; it is fundamental to the security and long-term viability of your investment. Always prioritize expert advice and thorough due diligence.