After 19 years of discussions, changes and ameliorations, on March 31st 2020, the supreme legislative body of Ukraine (Verkhovna Rada) adopted the so-called “land bill” #552-IX. The “Law on Circulation of Agricultural Lands” was signed by the President of Ukraine, Volodymyr Zelenski, in May. The official launch of the land market brings more transparency and clarity to this game-changing issue in Ukraine.
The land reform, which is great significance, will regulate the market relationships between both citizens and foreigners. As a first stage, starting from May 2021, the market will be open only for Ukrainians. Legal entities with 100% local capital will be able to acquire agricultural land starting from January 2024. After the initial success of the internal trade, a referendum on opening the international market to foreigners will be held.
Starting from July 2021, citizens of Ukraine will be able to purchase up to 100 ha of land, and up to 10,000 ha as of January 2024. Legal entities local capital will be able to obtain up to 10,000 ha starting from January 2024. However, there are some internal limitations for both physical and legal entities. Notably, no one can own more than 35% of one united territorial community land (“ОТГ”) or more than 8% of one district (“Область”).
The law regulates the terms, quantities and the main conditions of the agricultural land market in Ukraine. Based on the law, certain prohibitions (such as land within 50 km of border areas, temporarily occupied territories, state and municipal-owned lands) have been put in place. Some additional requirements for foreign legal entities will also apply. The limitations include the prohibition of Russian participants, terrorism-related organisations, foreign states, unknown beneficiaries and entities under sanctions.
Overall, the adoption of the Law on Circulation of Agricultural Lands is a sign of a new wind for investors. New business opportunities will continue to open and the Ukrainian land – which is one of the most fertile ones – will be ready for your investments. Eurofast will be here to support you every step of the way. Get in touch with our consultants to get a personal investment plan, support and guidance now!
Oleksii (Alex) Maistrenko
Kyiv Tax and Legal Associate