What types of land can foreigners own in Ukraine?

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What is permitted?

Direct acquisition of non-agricultural land:

• by foreign individuals – land within boundaries of cities and other settlements regardless of whether any real estate is located on the land
• by foreign companies – land within boundaries of cities and other settlements
• underlying privately owned real estate
• designated for constructing facilities for business activity in Ukraine
• by foreign individuals and foreign companies – land outside boundaries of cities and other settlements and underlying existing real estate privately owned by such foreign individuals and foreign companies

Foreign individuals and foreign companies may acquire land indirectly (through a Ukrainian corporate structure) for most commercial purposes on a par with Ukrainian individuals and companies (i.e. the above restrictions would not apply)

SALE OF LAND PLOTS TO FOREIGN COMPANIES

• State-owned land plots are sold by the Cabinet of Ministers subject to approval from the Verkhovna Rada (the Ukrainian Parliament)
• Municipally-owned land plots are sold by relevant local councils, subject to approval from the Cabinet of Ministers

Ukrainian laws do not specify whether foreign individuals may buy state- and municipally-owned land and whether they are subject to the same requirements of the sale approval by the state authorities

WHAT IS PROHIBITED?

Foreign individuals and companies are prohibited from buying and otherwise acquiring agricultural land, whether directly or indirectly, including by way of disposal of mortgaged land

This restriction can be cancelled through a nationwide referendum

Absolute private ownership ban extends to:

• military lands
• common-use lands in residential areas (waterfronts, parks, garden squares, etc.)
• certain water reserve lands and forestry lands

GREY AREA

Not listed among the legal entities expressly entitled to acquire land

• 100% foreign-owned Ukrainian companies
• Ukrainian companies with mixed Ukrainian and foreign shareholders (so called "joint ventures")

LEASE

No special bans or restrictions on land lease by foreigners or local entities incorporated by them

CORPORATE AND TAX STRUCTURING WILL HELP

• avoid some of the restrictions and expand opportunities for land acquisition
• optimize taxes and address tax risks (e.g. permanent establishment risk, etc.)
• use international tools for investment protection

For more information, please contact Asters' partner Oleg Boichuk and associate Andrii Kokhan