Gov’t sets new land registration rules for foreigners

Georgia’s Government has prepared a draft law that outlines new rules for land registration for foreigners.

The draft law on Agriculture Land Ownership was arranged by the Minister of Justice following consultations with industry insiders, including international experts.

The Government believed the new rules were balanced where on one hand protected Georgia’s national interests and at the same time defended the rights of foreign investors.

The new draft law on Agriculture Land Ownership outlined:

• Foreign company registered outside of Georgia and private foreign person(s);
• Foreign company and private foreign person(s) will not be able to purchase agricultural land across five kilometres of the country’s official border and at border zones defined by the Government, even it was registered or established in Georgia;
• The private foreign person and foreign company established in Georgia in accordance with local law will be able to purchase agricultural land but there will be some restrictions. In particular, both the private foreign person and foreign company must have five-years of working experience in the agriculture sector on Georgian territory; or in the case of a private foreign person, he/she must have permanent residence permission or investment permission;
• The private foreign person and foreign company established in Georgia will be able to purchase agricultural lands with a minimum of five hectares and maximum of 100 hectares;
• In the case of a serious investment proposal from a private foreign person or foreign company, the Georgian Government will have the right to support them and following their case to allow them to purchase the agricultural land;
• A private foreign person who was previously a Georgian citizen and had agricultural land passed down to him/her by their ancestor will be able to receive the land in his/her ownership;
• In case of mixed marriages when a wife or a husband is a foreigner they will have the right to have ownership of land. In the case of divorce, the foreign citizen will be obliged to sell the land that was held in co-ownership of the couple and the Georgian spouse will be have the first chance to purchase land.

Meanwhile, in June 2013, Parliament passed a temporary legal ban restricting non-Georgian citizens from purchasing or inheriting agricultural land until December 2014.

The temporary suspension of selling agriculture land to foreigners was removed in June this year following a verdict of the Constitution Court of Georgia that requested the withdrawal of the provision to suspend sale of agriculture land to foreign nationals.

The moratorium generated fierce opposition from foreign citizens as well as opposition parties who said the decision would halt Foreign Direct Investments (FDIs) in Georgia.

The Government imposed the moratorium to avoid the real threat of irrational privatisation of land, which may have had a negative consequence on the country’s economic security, environmental protection and state security. It may also have significantly damage the rural population, officials believed at the time.