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Law on Agricultural Lands Turnover is Signed

Law on Agricultural Lands Turnover is Signed

Ukraine
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On 28 April 2020, the President signed the Law of Ukraine “On Amendments to Certain Ukrainian Laws on Agricultural Lands Turnover” (“Law”). The Law lifts a long-lasting moratorium on private agricultural land sale, but it also introduces and leaves intact certain restrictions and limitations for the argicultural land market.

The provisions of the Law become effective in several stages.

Starting from 1 July 2021:

  • and until 1 January 2024, Ukrainian citizens will be allowed to buy not more than 100 ha of agricultural land per person
  • Ukrainian companies (with some exceptions) will be allowed to buy up to 10,000 ha of certain agricultural land
  • foreigners and foreign companies will be allowed to buy agricultural land only if a national referendum (if it is held) so approves
  • banks will be able to accept agricultural land plots as collateral. In the case of a foreclosure, the bank will be required to sell such land plots via auctions within 2 years. Banks will not be subject to the total land area and ownership structure limitations established for other Ukrainian companies
  • tenants will be entitled to transfer their pre-emptive rights to buy an agricultural land plot to other eligible buyers
  • until 1 January 2030, the price of most agricultural land plots, which earlier were under the moratorium, cannot be lower than the normative monetary value of such land plots

Starting from 1 January 2024:

  • the limit on the total area of agricultural land, which a Ukrainian citizen may purchase, will be increased up to 10,000 ha
  • Ukrainian companies will be allowed to buy any agricultural land within the limit of 10,000 ha per company

In any case, the Law prohibits certain legal entities and individuals to hold agricultural land plots (for example, entities controlled by citizens of an aggressor state or by persons or organisations registered in any of the FATF list states).

We welcome the lifting of the moratorium. At the same time, we are looking forward to further state’s actions aimed at the liberalisation of agricultural land market and hope that foreign investor’s ownership will be eventually allowed.

By Maksym Maksymenko, Counsel, Avellum

 

Avellum at a Glance

AVELLUM is a leading Ukrainian full service law firm with a key focus on Finance, Corporate, Dispute Resolution, Tax, and Antitrust.

Our aim is to be the firm of choice for large businesses and financial institutions in respect of their most important and challenging transactions.

We build lasting relationships with our clients and make them feel secure in new uncertain economic and legal realities.

We incorporate the most advanced Western legal techniques and practices into our work. By adding our first-hand knowledge, broad industry experience, and unparalleled level of service we deliver the best results to our clients in their business endeavours. Our partners are taking an active role in every transaction and ensure smooth teamwork.

AVELLUM is recognised as one of the leading law firms in Ukraine by various international and Ukrainian legal editions (Chambers, The Legal500, IFLR1000, The Ukrainian Law Firms, and others).

Firm's website: www.avellum.com