The Ministry of Agriculture, Forestry and Water Economy of North Macedonia (“Ministry”) recently pointed out that 577,662 ha are classified as arable land in North Macedonia, while 41% of this land is state-owned. It also noted that the current applicable Law on Sale of State – Owned Agricultural Land (“Law”) has many ambiguities and systemic weaknesses, which prevent its full implementation.
In order to rectify the deficiencies of the Law, the Ministry prepared a new draft Law on Sale of State – Owned Agricultural Land (“Draft Law”), which regulates the manner, procedure and conditions for sale of state-owned agricultural land. The Draft Law introduces several novelties compared to the current Law.
While the Draft Law, much like the current Law, prohibits foreign natural persons and legal entities to acquire state – owned agricultural land (apart from certain exceptions), the Draft Law will open the door for foreign natural persons and legal entities to acquire state – owned agricultural land indirectly through ownership of stocks or shares in a domestic legal entity, provided that the ownership is a result of the realisation of a strategic investment project approved under the Law on Strategic Investments of North Macedonia (“Investments Law”).
For a project to be considered as strategic, apart from meeting other criteria prescribed with the Investments Law, such investment must amount between at least EUR 30 million to at least EUR 100 million depending on the territory where it is realised. It should be noted that these amounts do not apply to projects realised within the framework of agreements between states, projects implemented and financed in cooperation with the European Union, Ministerial Council of the Energy Community and international financial institutions (where the holder of the investment is a Macedonian state body listed in the Investments Law).
Subject to certain exceptions, the acquired state – owned agricultural land under the Draft Law cannot be sold, given as a gift, exchanged, given under concession for geological research or exploitation of mineral resources, or converted into construction land for a period of at least ten years after the conclusion of the sale agreement.
The Draft Law envisages various procedures for sale of state – owned agricultural land, which include: (i) sale through public announcement; (ii) sale through public call; (iii) sale of technological unit through direct agreement; (iv) sale for consolidation of agricultural land through direct agreement; and (v) sale for strategic purposes through direct agreement.
Currently, the Draft Law is under public consultation, and should enter into parliamentary procedure in the following months.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
By Veton Qoku, Attorney at Law in cooperation with Karanovic & Partners