Until recently, only natural persons could purchase agricultural land. However, as of January 1, 2024, legal entities have become new players in the land market.
How exactly the updated market will work and what rules future owners will have to play by, we will tell in this article.
New potential owners of agricultural land: who are they?
From now on, not only natural persons, the state and territorial communities, but also legal entities will be able to acquire land ownership.
However, not every enterprise will be able to purchase land. The main obstacle is the presence in the company of participants (shareholders, members) or ultimate beneficial owners who are not citizens of Ukraine. Whether such enterprises will receive permission in the future is not yet known, the decision will be made in a referendum.
At the same time, enterprises, participants and beneficiaries of which will be completely banned:
- have citizenship of the Russian Federation, belong or have belonged to terrorist organizations;
- are foreign countries;
- registered in offshore zones;
- are under the sanctions of the National Security Council;
- it is impossible to establish the beneficiary;
- enterprises are under the control of individuals or legal entities registered in a country that does not cooperate with the FATF in the field of combating money laundering.
Potential owners will be checked, first of all, according to the ownership structure, information from the EDR and documents confirming the citizenship of the participants and (or) beneficiaries.
The information contained in the decisions of the National Security Council, put into effect by the decrees of the President of Ukraine, and in the lists of persons connected with the conduct of terrorist activities or to whom international sanctions have been applied, published on the official website of the State Financial Monitoring Service, will also be taken into account.
How many hectares can entrepreneurs count on?
From January 2024, the limits for the purchase of land have been increased - up to 10 thousand hectares in "one hand". Compliance with the established limits by the potential owner during the purchase of land will also be determined by a preliminary inspection.
Please note that when buying land, the company must also confirm the source of funds or other assets. Annual (quarterly, other) financial and/or tax statements are sufficient for this notary.
Has the land market worked as of the end of January 2024?
According to the Ministry of Agriculture, the first week of 2024 became an adaptation period for large companies, as it ended without a single concluded agreement. Some enterprises, on the contrary, despite all expectations, decided to reduce their own land bank. During the first two weeks, companies sold about 207 hectares of land.
However, at the end of January, the balance between the purchase and sale of land somewhat equalized. According to the updated rules, about 70 land plots have already been purchased, the total area of which is 216 hectares. Thus, the updated land market has not yet undergone significant changes and is only gaining momentum.
As you can see, there are a lot of innovations, so if you have any questions about the updated market and the possibility of a company acquiring land, contact our law firm for a thorough consultation.