Agricultural land issues for the foreign investors

How may the non-residential companies possess an agricultural land in Ukraine?

  The actual legislative trends in respect of the land relations reformation are about to promote a further transferability of the agricultural land from precisely 2012. Nevertheless, this actual novel probably would not concern non-residential companies whose ownership of this land categories is about to remain prohibited.

  However, through usage of certain corporate/contract mechanisms the abovementioned companies may actually obtain agro-land to carry out its commercial activity in Ukraine. Herein we could suggest some relevant mechanisms to be used to solve the problem stated.

1. Creating subsidiaries (three-tier structure)

  The effective Land Code does not restrict the Ukrainian legal entities with the national shareholding to own agricultural land allotments. Thus, the usage of three-tier corporate structure may provide foreign firms with the actual land possessing:

2. Leasing/Emphyteusis.

  The other possible scheme is to reject the concept of ownership and to obtain a land plot under the lease or emphyteusis right.

  The effective legislation does not put any limitation for foreign legal entities in respect of the named derived rights. Noticeable that the term of lease may be less than 50 years while the utmost term of emphyteusis of private allotments is not set.

  Moreover, the emphyteusis rights are transferable (including the possibility to mortgage) and are also subject to pre-emptive rights to purchase in case of future sale.