Initiatives are continuing to lift Ukraine's moratorium on the sale of agricultural land. To the surprise of many commentators, Parliament passed the Law on State Land Cadastre, well ahead of the expected Autumn 2012 schedule. The next logical step towards lifting the moratorium would be the adoption of the Law on the Land Market. Several drafts of this law - which do not differ fundamentally - have already been published. However, the Law on State Land Cadastre having been adopted so quickly, the Draft Law on the Land Market(1) probably has a better chance of becoming law than the previous bills.

The draft law sets out an exhaustive list of entities that can acquire ownership of agricultural land under civil law contracts: Ukrainian citizens, farms and state and local government bodies. This formulation implies that farms may acquire agricultural land for ownership only as legal entities. Companies incorporated under a different form may acquire such land only for use. Additionally, the draft law states that foreign persons may not acquire ownership of agricultural land. The term 'foreign persons' covers:

  • foreign and stateless individuals;
  • foreign enterprises;
  • enterprises with at least 10% foreign investment in their share capital;
  • foreign legal entities and foreign governments; and
  • intergovernmental and non-governmental organisations.

Foreign persons, whether legal or natural, must first establish a company in Ukraine (which will be considered a 'foreign entity' within the meaning of the Law on the Land Market). This company may then create a further company, which will have the right to acquire agricultural land.

Thus, as in previous attempts at wording regulations on the subject, no effective means has been found to eliminate the possibility of foreign entities acquiring agricultural land.

For further information on this topic please contact Timur Bondaryev at Arzinger by telephone (+380 44 390 5533), fax (+380 44 390 5540) or email ([email protected]).


(1) Law 9000-1.