Ilyashev & Partners | View firm profile
Dmytro Hruba, Attorney at Ilyashev & Partners Law Firm
As Ukraine recovers and rebuilds amid war, its real estate and land markets present unique opportunities for foreign investors – especially in logistics, infrastructure, agriculture, and humanitarian operations. Yet these opportunities come with regulatory complexity, legal restrictions, and evolving risks.
This guide outlines the legal landscape for foreign investment in Ukrainian real estate and land, offering practical strategies for ownership structuring, risk mitigation, and legal due diligence.
Ownership Rights: What Foreigners Can and Cannot Acquire
Foreign individuals and companies may freely acquire residential and commercial real estate in Ukraine, including apartments, office buildings, hotels, warehouses, and retail premises. However, the acquisition of agricultural land is prohibited for foreign nationals and foreign-owned companies under current legislation.
Key rules:
- Since July 2021, Ukrainian citizens have been allowed to purchase up to 100 hectares of agricultural land.
- As of January 2024, Ukrainian legal entities (with exclusively Ukrainian shareholders) can purchase up to 10,000 hectares.
- Foreigners can only acquire agricultural land if a national referendum permits it—a referendum that is currently not planned.
Alternative options for foreign investors include long-term land leases (up to 50 years), but such models offer limited control and carry legal risks.
At Ilyashev & Partners, we regularly assess these alternative structures for compliance and asset protection.
Legal Due Diligence: Verifying Title and Ownership
Before entering any real estate transaction, comprehensive due diligence is critical. This process should verify the seller’s rights, property encumbrances, intended land use, and potential litigation.
Core sources of verification:
- State Register of Real Rights to Immovable Property (SRRR)
- State Land Cadastre
- Unified State Register of Court Decisions
- Local zoning plans and territorial documents
- Archival and urban planning cadastres
We recommend detailed legal due diligence not only on the property but also on the seller and related litigation risks.
Structuring the Deal: Safe Acquisition Models
In practice, there are many ways to acquire ownership of land or real estate, including direct purchase of assets and acquisition of corporate rights of legal entities that own land or real estate etc.
Each method may be appropriate and used under certain conditions, and must undergo a detailed due diligence. However, the safest option is always to acquire title to land or real estate through direct purchase based on a sale and purchase agreement.
It should be remembered that in Ukraine, agreements for the sale and purchase of real estate, including land plots, are subject to notarization, and ownership of such assets arises from the moment of registration of such title in the SRRR. Such registration is carried out by a notary at the same time as the notarization of the sale and purchase agreement, thereby fulfilling the principle of the inseparability of notarial and registration actions concerning real estate to minimize risks for the buyer.
In the purchase and sale agreement, we recommend paying special attention to the representations and warranties of the parties, the terms of payment, the liability of the parties in case of a breach of the agreement, etc. To increase the level of control over the deal, we also always recommend that real estate buyers consult with trusted notaries.
Construction and Development Approvals
A common form of land use for foreigners is leasing, especially for construction projects, although not exclusively. In agriculture, this is almost the only adequate alternative to ownership.
In this regard, it should be noted that land leases can be quite long-term, with the law stipulating that such agreements may be concluded for up to 50 years.
When preparing and agreeing on a land lease agreement, we recommend paying special attention to the representations and warranties of the parties, land use and payment terms, the liability of the parties in the event of a breach of the agreement, the procedure, and other issues related to early termination of the agreement, etc.
Notably land lease agreements are not subject to mandatory notarization, but in some cases, we recommend that our clients use this option and have the agreement notarized.
It is also important to register the leasehold in the SRRR, as the law links the creation of the leasehold to the moment of such registration.
As for public or communal land, as a general rule, it can only be leased on a competitive basis through public tenders (auctions). The law also provides for a number of exceptions to this rule, the list of which is quite extensive. The assessment of the grounds for obtaining public or communal land for lease without a tender must be carried out before its acquisition in order to avoid further claims from the regulatory authorities and loss of land rights.
Construction Permits & Urban Planning Restrictions
If the purpose of acquiring or leasing a land plot is for further development, the investor must ensure that the specific land plot allows for the implementation of the future construction project before acquiring it and, of course, before starting construction.
In this regard, it is particularly important to check and clarify the following:
- Information on the intended use of the land plot and permitted types of use.
- The presence and nature of restrictions on the use of the land plot, etc. (requirements for the type of development, number of stores, etc.).
- The functional purpose of the territory within which the land plot is located.
- Compare the above information with the development plans.
In this regard, it is necessary to examine the documents for the land plot, information from the State Land Cadastre, the State Urban Planning Cadastre, and review local urban planning documentation (general plan of the settlement, zoning plan, detailed plan of the territory, the Comprehensive Plan for Spatial Development of the Territories (CPSD), etc.).
If, as a result of the above analysis, it can be concluded that the land plot parameters and the future development plans are in line with each other, you can proceed to the procedures for obtaining a construction permit.
Depending on the purpose of the development, it may be necessary to obtain technical conditions for connecting the future object to utilities, urban planning conditions, and restrictions on the land plot, etc. These documents are usually necessary for construction design.
The next necessary step may be to obtain a positive expert opinion on the construction project.
The final stage before the start of construction work is obtaining the appropriate permit to perform the work from the authorized state body.
Depending on the construction project, the list of documents may vary in scope. The need or lack of need to obtain certain documents should always be assessed in the context of the specific project.
However, for any construction project, the final stage will be the acceptance of the completed objects into service and the subsequent registration of ownership rights in the SRRR.
Risks of Hidden Ownership and Support for Transactions with Corporate Entities
In Ukraine, foreign investors sometimes choose indirect or hidden ownership of assets through nominal owners, partners or multi-level corporate structures. This approach may seem convenient for optimizing management or circumventing certain legal restrictions, yet it creates a number of serious risks.
Main threats:
- Loss of assets due to claims by state authorities.
For example, if a competent government agency discovers that a foreigner is illegally owning (directly or indirectly through a corporate entity) agricultural land, it may apply to the court to confiscate the land.
- Loss of control over the asset. Risk of hostile takeover.
If the property is legally registered to a third party (e.g., a local partner), the actual investor risks losing real control in the event of a conflict or breach of agreement. If the investor holds no legal title to the asset, it will be almost impossible to protect it from such a takeover.
- Difficulty of protecting rights in court.
The hidden owner often has no direct legal grounds to apply to the court or state authorities. This makes it much more difficult to regain control over the asset.
Red Flags in Real Estate Transactions
Real estate transactions in Ukraine may involve a number of hidden risks. Identifying such risks at the stage of checking the property or counterparty allows you to prevent financial losses and legal disputes in a timely manner.
The most common risks include:
- Significant discrepancies between the documents for the real estate property and the information in the SRRR.
- The owner does not have a complete set of title documents.
- Suspicious chain of owners, frequent changes of owners without logical and economic justification.
- Errors or unauthorized corrections in purchase and sale agreements or technical documentation, technical documentation.
- Encumbrances and legal disputes, mortgages, seizures or prohibitions on alienation; pending legal proceedings in relation to the property or its owner;
- Third-party claims that may challenge the ownership.
- Land issues, such as lack of registered land use rights for the property.
- Lack of a cadastral number or errors in land documentation;
- Conflicts regarding the intended use of the land and the actual development plans (e.g., use of land for the construction of individual residential buildings (private plots) for multi-storey apartment buildings without changing its intended use).
The above are typical risks that most often occur in real estate transactions. However, this list is not exhaustive, and a thorough due diligence of a specific property and seller will allow you to identify the risks specific to a particular transaction. Ignoring the signals identified during the legal due diligence may turn an investment into a long-term dispute or a loss-making asset.
Dispute Avoidance and Protection
Disputes in the real estate sector have been and remain widespread in Ukraine. The most common disputes concern the performance of purchase and sale or lease agreements, their invalidation, or the recovery of property, the legality of construction, etc. In the agricultural sector, disputes with landlords regarding the performance of lease agreements or their termination are also common.
Following these recommendations during the preparation stage of a deal by conducting a full due diligence, structuring the deal, assessing future development plans, and developing appropriate protection mechanisms to minimize risks will help avoid negative consequences associated with complaints from regulatory authorities or counterparties.
Case Snapshot
Ilyashev & Partners Law Firm handles numerous cases where clients, during the preparation stage of a deal, request due diligence of real estate or land, assessment of future development plans, land use, etc.
Recently, an international humanitarian organization sought legal advice from Ilyashev & Partners Law Firm regarding the acquisition of real estate for its activities in Ukraine. Several sites were rejected following due diligence; safe acquisitions were successfully completed.
Ilyashev & Partners Law Firm also advised an agricultural producer founded by a foreign citizen on the regulation of land relations. We conducted a detailed due diligence of the current land relations and assisted in reviewing and restructuring land use arrangements in compliance with Ukrainian law.
Tax Considerations
Real estate and land transactions trigger tax obligations that vary depending on asset type and party structure.
Assessing the types and amounts of future taxes and related payments will be most effective when taking into account the specific project, as well as the possibility of applying certain tax exemptions and preferences.
Strategic Entry into Ukraine’s Real Estate Market
Ukraine’s real estate market remains open, with the exception of agricultural land ownership. Foreign investors benefit from low entry costs and long-term growth potential but must navigate legal restrictions and wartime regulations.
To succeed, foreign investors must:
- Conduct full legal due diligence
- Structure transactions to ensure compliance and protection
- Rely on experienced local counsel familiar with real estate, land, and construction laws
With the right legal strategy, Ukraine offers significant real estate opportunities for foreign investors ready to act with foresight and precision.
Ilyashev & Partners is one of the most reputable and experienced law firms in Ukraine, with recognized expertise in real estate, land law, complex litigation, and regulatory matters. Our team advises international investors, development agencies, and corporate clients on structuring land and real estate transactions, conducting legal due diligence, resolving disputes, and ensuring full compliance with Ukrainian law.
To learn more, please visit the Ilyashev & Partners Law Firm website or contact Dmytro Hruba directly.