Are there restrictions on foreign ownership of agricultural land in Ukraine?
Ukraine, often referred to as the "breadbasket of Europe," boasts fertile lands that have been a source of agricultural wealth for centuries. With its vast expanses of arable land and favorable climate, the country has been a magnet for foreign investors looking to harness the potential of its agriculture sector. However, the Ukrainian government has enacted various restrictions on foreign ownership of agricultural land, prompting potential investors to navigate a complex regulatory landscape.
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How it was before?
The question of foreign ownership of Ukrainian agricultural land is rooted in a complex historical narrative. Ukraine's agricultural sector has experienced numerous transformations, from the Soviet era's collective farms to its post-independence land reforms. After the collapse of the Soviet Union, Ukraine embarked on a path to privatize agricultural land and establish a functioning land market.
For many years, the Ukrainian government imposed a moratorium on the sale of agricultural land, effectively preventing foreign investors from acquiring these valuable assets. The moratorium was intended to protect the interests of small-scale farmers and prevent foreign entities from amassing vast quantities of Ukrainian farmland. However, the moratorium's end in 2020 marked a significant shift in the country's approach to foreign ownership of agricultural land.
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Current Regulations: Can the foreigner buy agricultural land in Ukraine?
As of 2020-2022, Ukraine began allowing the sale of agricultural land. Nevertheless, foreign investors still face several restrictions and regulations when it comes to acquiring Ukrainian farmland:
- Size Limitations: Foreign entities are restricted from owning more than 100,000 hectares of agricultural land in Ukraine. This limitation is in place to prevent the concentration of land in the hands of a few large foreign corporations.
- Eligibility Requirements: Foreign individuals, legal entities, and states can only acquire Ukrainian agricultural land if they meet specific eligibility criteria and obtain government approval.
- Notification Requirements: Acquisitions of agricultural land by foreign investors must be reported to the state authorities, allowing for scrutiny and regulation.
- Strategic Crops: There are additional restrictions on the acquisition of land that is used to grow certain "strategic crops" like wheat, corn, and rice, which may require special approval.
- Anti-Monopoly Measures: In an effort to prevent monopolistic control of Ukraine's agricultural sector, any entity that already owns a significant portion of Ukrainian agricultural land may face restrictions on further acquisitions.
At times of war there were no cases of buying agricultural land buy foreigners due to restrictions. But you could find a way.
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Are there any legal ways to buy agricultural land for a foreigner in Ukraine?
It all depends on your needs, possibilities and the land itself. For example, a popular way out of the situation was to register a Ukrainian company for a foreigner. And agricultural land could be purchased or, for example, leased by a company. If for some reason the foreigner was not satisfied with this option, we offered other legal options for solving his problem.
Foreign investors interested in acquiring agricultural land in Ukraine should navigate the regulatory landscape carefully. To do so, it is advisable to seek legal counsel with expertise in Ukrainian property laws and land regulations. By working closely with legal experts, investors can gain a better understanding of the rules and restrictions, ensure compliance, and find opportunities that align with their goals.
The Ukrainian government's approach to foreign ownership of agricultural land is rooted in a desire to balance the interests of small-scale farmers, domestic corporations, and foreign investors. While restrictions are in place, the goal is not to discourage foreign investment but to ensure that it aligns with Ukraine's long-term economic and agricultural interests.
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