Publication

Times are changing, and along with them, the rules for acquiring property are evolving. The Law on the Restriction of Transactions Threatening National Security (Nacionālo drošību apdraudošu darījumu ierobežošanas likums) (the “Law”), adopted on 19 June 2025, forces us to view the real estate market from a completely different perspective.

What does this new law mean for companies based in Russia and Belarus, for citizens of these countries, and even for those holding dual citizenship? And what should be done if a transaction was already initiated? This article explores all these questions in detail.

I Nature of the Law and its restrictions

The Parliament of Latvia adopted the Law on the Restriction of Transactions Threatening National Security (Nacionālo drošību apdraudošu darījumu ierobežošanas likums) (the “Law”) on 19 June 2025. The Law entered into force on 3 July 2025. Under this Law, it is prohibited to acquire real estate or a share thereof in Latvia for the following persons and entities:

(a) the Russian Federation (“Russia”) and the Republic of Belarus (“Belarus”) themselves;

(b) citizens of Russia and Belarus;

(c) legal entities registered in Russia or Belarus;

(d) legal entities in which 25% of the share capital (or stocks (akcijas)) are owned by legal entities registered in Russia or Belarus;

(e) legal entities in which nationals of Russia or Belarus, directly or indirectly, own at least 25% of the investment or share capital (or stocks (akcijas)), or where the ultimate beneficial owners are citizens of Russia or Belarus;

(f) legal formations established in Russia or Belarus, or whose ultimate beneficial owners are citizens of Russia or Belarus.[1]

These restrictions apply to all real estate disposal transactions, as well as to any other transactions, with which the subjects to which the restrictions apply, have acquired real estate or part thereof in the Republic of Latvia, concluded after the Law enters into force.[2]

The Law itself does not provide any explanation regarding situations involving dual or triple citizenship. Therefore, based on literal interpretation of the Law, it applies to all Russian and Belarusian citizens, even if they also hold citizenship of other countries. Taking into account that one of the main objectives of the Law is to protect democracy and the security of the country from Russian and Belarusian influence, as well as from any person connected to either of these states, and considering the debates held in the Parliament and its committees, it can be concluded that the legislator intended to restrict any links between persons residing in Latvia and the aggressor states. In practice, notaries also confirm that, in their opinion, the law applies to dual citizens as well and suggest interpreting the law as narrowly as possible for the time being.

The transitional provisions of the Law provide that persons to whom the provisions of the Law apply and who have concluded transactions or initiated inheritance proceedings prior to its entry into force have the right to submit documents for registration of ownership rights in the Land Register within three months from (i) the date the Law enters into force; or (ii) the date of receipt of the certificate of inheritance. If the transaction is not registered in the Land Register within this three-month period, it shall be deemed invalid.

There was extensive discussion during the third reading of the Law in Parliament, and therefore major amendments could not be accepted at the final reading. As a result, in order for the Law to be adopted in June, many compromises were made. As stated by Andrejs Judins, chairman of the Legal Commission of the Parliament: “[..] it is important to adopt the draft law now and not postpone it until autumn”.[3]

Exceptions in the Law

The law provides several exceptions to its applicability. For example, it allows citizens of Russia and Belarus to acquire real estate if they purchase the property as their sole residential property, provided they hold EU permanent resident status in Latvia (issued in Latvia) or have a valid permanent residence permit issued before the date the Law entered into force.[4]

Similarly to the situation in Lithuania, the draft Law initially included an exception for all natural persons who, on the day the Law entered into force, have obtained EU permanent resident status or a permanent residence permit under the Immigration Law (Imigrācijas likums). However, this exception was deleted during the second reading upon the proposal of the Parliament Committee on Legal Affairs.

Similar restrictions in other EU countries

Latvia is not the first country to have implemented restrictions on Russian and/or Belarusian citizens acquiring real estates. For example, Clause 6 of the Law of Lithuania on the Imposition of Restrictive Measures in Response to Military Aggression Against Ukraine (Įstatymas dėl ribojamųjų priemonių, nustatytų karinės agresijos prieš Ukrainą atžvilgiu) provides that the rights of citizens of Russia and legal entities established or controlled by them, as defined in the Law on Competition of the Republic of Lithuania (Lietuvos Respublikos konkurencijos įstatymas), to acquire ownership of real estate located in the territory of Lithuania are suspended, except in the following cases:

(g) where the citizen of Russia has been issued a temporary residence permit or a permanent residence permit in Lithuania; or

(h) where the citizen of the Russia acquires real estate ownership by inheritance.[5]

In June 2025, Finland adopted amendments to the Act on the Acquisition of Real Estate Requiring Permission for Reasons of National Security (Laki eräiden kiinteistönhankintojen luvanvaraisuudesta, 470/2019). Under this Act on Transfers of Real Estate Requiring Special Permission, all non-EU/EEA nationals require approval of Ministry of Defence to purchase real estate. However, following recent amendments, a complete prohibition has been introduced for Russian and Belarusian citizens and entities, preventing them from obtaining such permission due to national security concerns related to the war in Ukraine. This ban also extends to legal entities established or controlled by Russian or Belarusian nationals.[6] Exemptions apply for individuals holding a Finnish permanent residence permit or a long-term EU residence permit issued by Finland[7], who remain eligible to apply for permission subject to thorough security scrutiny.

Apparently, the Lithuanian and Finnish regulations are not as strict as the regulation adopted by Latvia and provide broader exceptions for persons holding either a temporary or a permanent residence permit. This raises the question of whether anyone would try to challenge the Law in the Constitutional Court (Satversmes tiesa), given the rather strict limits imposed by the legislation.

The Ministry of the Interior of Estonia has published information that it is preparing a draft law to address the issue of the large number of Russian citizens who own real estate in Estonia. In some cases, this may lead to individuals losing their property. The Ministry of the Interior aims to present a draft law and related amendments by the end of this year. According to Minister Läänemets, the proposed legislation will prevent third-country nationals from acquiring real estate near defence sites in Estonia, thereby removing their ability to purchase property in these sensitive areas.[8]

Summary

(1) Under the new Law, it is prohibited to acquire real estate or a share thereof in Latvia for natural or legal persons related to Russia or Belarus.

(2) The Law does not address dual or multiple citizenship issues, meaning it applies to all Russian and Belarusian citizens regardless of whether they hold additional citizenships.

(3) The Law applies to individuals holding a residence permit in Latvia or other EU countries. However, an exception applies if a person is acquiring their sole residential property in Latvia and holds EU permanent resident status in Latvia or has a valid permanent residence permit issued before the date the Law entered into force.

(4) It does not matter how large a share of the property is being acquired by a person or entity covered by the Law – acquisition of any part of real estate in Latvia is prohibited by persons and entities to whom the Law applies. Additionally, such persons or entities are not allowed to exercise rights of first refusal and redemption rights.

(5) Additional guidance is expected to be provided by public authorities in the near future. We understand that notaries are already in active discussions about implementing the new regulation and preparing guidance for practice.

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[1]           Clause 2 of the Law on the Restriction of Transactions Threatening National Security, adopted on 19 June 2025.

[2]           Clause 2, paragraph 1 pf the Law on the Restriction of Transactions Threatening National Security, adopted on 19 June 2025.

[3]           Minutes of the meeting of the 14th Legal Commission of the Republic of Latvia of 12 June 2025 No. 141.1.9/3-36-14/25.

[4]           Clause 4 of the Law on the Restriction of Transactions Threatening National Security, adopted on 19 June 2025.

[5]           Clause 3, paragraph 6 of the Law on Imposition of Restrictive Measures in Response to Military Aggression Against Ukraine, adopted on 20 April 2022.

[6]           Clause 5a, paragraph 2 of the Act on the Acquisition of Real Estate Requiring Permission for Reasons of National Security, adopted on 29 March 2019.

[7]           Clause 5a, paragraph 5 of the Act on the Acquisition of Real Estate Requiring Permission for Reasons of National Security, adopted on 29 March 2019.

[8]           Estonia to stop third-country nationals from buying land near strategic facilities. Available: Estonia to stop third-country nationals from buying land near strategic facilities | News | ERR; Estonia blocks Russians’ access to real estate. Available: Estonia blocks Russians’ access to real estate | Caliber.Az; Russian citizens own over 41,000 properties in Estonia. Available: Russian citizens own over 41,000 properties in Estonia | News | ERR.