Ukraine has declared a comprehensive land reform aimed at gradual creating of an agricultural land market. However, to its termination current Ukrainian national legislation clearly regulates issues related to purchasing or lease of land. This press release contains the main description of the regulations of land relations and expecting changes to them.

1. Land legislation

Ukrainian land legislation consists of Constitution of Ukraine, Land Code, Law of Ukraine “On State Land Cadastre” and other laws and regulations adopted according to them. Besides, land reform, aimed at gradual introduction of a free agricultural land market, is in the process.

2. Purpose of land’s use / its status:

In Ukraine, the land is divided into 2 categories:

- Agricultural;

- Non-agricultural.

3. Agricultural land

3.1. Current legislation of Ukraine provides the possibility to purchase agricultural land by citizens and legal entities of Ukraine only, although including those, established by foreign individuals and legal entities.

3.2. Foreigners may lease land plots for their personal peasant homesteads, horticulture etc.

3.4. There is a moratorium on sale of agricultural land in Ukraine till the January 1, 2013.

4. Non-agricultural land

4.1. In Ukraine, foreigners and stateless individuals may purchase non-agricultural land plots within boundaries of populated areas, as well as non-agricultural land plots outside populated areas, where real estate objects, privately owned by such individuals, are located.

4.2. Foreign legal entities may acquire ownership of non-agricultural land plots within boundaries of populated areas in the cases of the acquisition of real estate objects and for the construction of facilities necessary to conduct business activities in Ukraine, as well as non-agricultural land plots outside populated areas, where real estate objects are purchased by them.

4.3. Specific features of the sales of state or community-owned land plots to foreign States and foreign legal entities should be taken into account, namely:

4.3.1. Sale of the state-owned land plots, except of the state-owned land plots, where the objects to be privatised are located, to foreign states and foreign legal entities can be carried out by the Cabinet of Ministers of Ukraine in agreement with the Supreme Council (Parliament) of Ukraine.

4.3.2. Sale of the state-owned land plots, where the objects to be privatised are located, to foreign states and foreign legal entities can be carried out by the state privatisation agencies in agreement with the Cabinet of Ministers of Ukraine.

4.3.3. The land plots, owned by territorial communities, can be sold to foreign states and foreign legal entities by the relevant councils in agreement with the Cabinet of Ministers of Ukraine.

4.4. The land plots, owned by the state or territorial communities, may be sold to foreign legal entities subject to the registration of their permanent representative office entitled to engage in business activities on the territory of Ukraine.

5. Land reform

5.1. In the course of the preparation of the land reform, the issue of granting rights to foreigners, stateless persons, foreign legal entities and foreign states to purchase agricultural land plots, is still controversial.

5.2. Adoption of the Law of Ukraine “On the Land Market”, which is a precondition to removal of moratoriumon sale of agricultural land plots, is expected during the year 2012.

5.3. According to the Law of Ukraine “On Fundamental Principles of the Domestic and Foreign Policy”, one of the basic principles of Ukraine's foreign policy is “to ensure Ukraine's integration into European political, economic and legal space with the aim to obtaining a membership in the European Union”. This means that national land legislation of Ukraine has to be adapted to that of the EU in the future, first of all on the equal access to land market both for Ukrainian and foreign consumers. At the same time, taking into account experience of the new EU member states, it can be predicted that the free access to agricultural land market for foreigners, stateless persons, foreign legal entities and states in Ukraine will be established in a long-term perspective.

Conclusions:

1. Currently, according to Ukrainian national legislation, foreigners, stateless persons, foreign legal entities and states can:

1.1. Lease, including for long-term timeframes, agricultural and non-agricultural lands;

1.2. Purchase non-agricultural land plots.

2. Fully liberalized land market, as it is a case in the majority of the EU member-states, will be established in Ukraine in the long-term perspective.

The Attorneys at Law «IMG Partners» provides a full package of services related to purchase of land plots and its lease.