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ACQUIRING LAND IN UKRAINE
Ukraine has over 40 million hectares of farmland. The majority of this land was privatized by dividing the land on each former state farm between all the employees (past and present) which means that on average each employee has between 1.5 and 6 Ha as their land share. Buildings and the remaining machinery were also divided in a similar way.
Buying Assets
At the moment there is a ban (moratorium) on selling farm land but this is due to expire in 2010 and may be extended. However it is very likely that land sales will be allowed in the next 2-3 years which is why many large international investors are piling into large scale land rental agreements. Many of these funds have well over 100,000 Ha and growing fast. They are concentrating on large black soil fallow farms (land that has been unused for the last few years) as it has no ingoings and no staff or other baggage. Despite the fact that there was a lot of unused land (estimates put this at around 10 Million hectares) - it is almost all been rented over the last year or so. It is possible (often) to buy buildings and, of course, machinery and livestock. The buildings are usually poor but they do make a base with, hopefully, some concrete, where you can store machinery and erect better buildings in the future.
As you can imagine it is difficult agreeing rental contracts with many hundreds of people. In summary the farming part is relatively easy - the difficult part is an acquiring a good farm and then dealing with the administration and tax issues. Many foreign farmers coming here concentrate on the farming and then realise they have a number of problems to deal with on taxation and general administrative issues. In fact the taxation system is generous for farmers with no corporate income tax but it is important to set up your operation correctly and then ensure that all tax and other administrative reports (usually 12-14 per month) are made on time. Careful thought as how to transfer funds into Ukraine and subsequently how to transfer profits or capital out again should be given. We can recommend a number of experienced legal and audit companies that can ensure you are set up in the right way and that all the ongoing issues can be handled smoothly.
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