Land market in Ukraine will be accessible to foreigners

On November 13, 2019, the Verkhovna Rada (Parliament) of Ukraine passed in first reading a bill opening the land market, UkrAgroConsult reports. This led to numerous discussions about whether foreigners will have the right to buy land and how this point will be regulated legislatively, reports UkrAgroConsult.

Some clarifications on these issues were given by attorney and KAC Group managing partner Volodymyr Garkusha:

– Agrarian enterprises with foreign owners who have been working in Ukraine for a long time will get the right for land acquisition and they will have no problems to buy them. First of all, we are talking about transnational agricultural corporations;

– If agrarian enterprises with foreign owners have land banks which are formed not from the leased state lands, but from land units that have been "bought out" or leased from peasants under different schemes, then it is likely that they are waiting for lawsuits to protect their rights as conscientious purchasers. It can be assumed that the peasants will want to change the conditions of "sale" of their land shares due to the new conditions that have arisen. They will be stimulated by competitors;

– Certainly the first "latifundists" will be the local oligarchs who have the administrative capacity and access to inexpensive financial resources. They also have their own banks, and they can easily redirect their own financial flows from the steel market, which is now in recession, to more profitable land speculation. So, when the land market becomes available to foreigners, they are likely to be the main sellers of the land to non-residents;

– A legal entity cannot directly buy land unless its final beneficiary is a resident of Ukraine. But this can be done by an affiliated Ukrainian non-resident company with a resident beneficiary, which will issue securities and derivatives secured by the land, or be released to raise funds for the purchase of the land by the non-resident. And it will be the only kind of its activity.

In the opinion of UkrAgroConsult, stable “rules of the game” in Ukraine’s land market will be developed no sooner than in 2-4 years after its opening.

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