Buy ownership of agricultural land to a foreigner

This question is of interest to more and more foreign investors and foreigners wishing to organize agriculture in the Russian Federation or simply invest in land.The purchase of agricultural land guarantees income of 25% per year, especially after the introduction of retaliatory sanctions and import substitution programs, which increased the demand such lands. Most law firms that provide advice on land issues cannot answer the question of how to buy agricultural land to a foreigner. The only and widespread answer is a long-term lease of agricultural land for 49 years. Such firms specialize in consulting “simple lands” – individual housing construction sites, summer cottages, gardening, etc., guided by the Civil Code of the Russian Federation. According to the legislation of the Russian Federation, namely, Article 3 of the Federal Law of July 24, 2002 (as amended on July 15, 2016) No. 101-FZ “On the turnover of agricultural land”, a foreign citizen can buy agricultural land by registering land for a legal entity (company).

How to buy agricultural land for a foreigner in 2021?

The easiest way is that the land is registered in the name of a legal entity, an ordinary Russian company, as an ordinary transaction for the sale and purchase of a company’s land plot. After the registration of agricultural land with the FRS, receipt of documents and a certificate of ownership (canceled from January 1, 2017, at the moment it is replaced by an extract of the USRN), the company is sold (re-registered) to a foreign citizen in accordance with paragraph 1 of Art. 8 of the Federal Law of 08.02.1998 N 14-FZ “On Limited Liability Companies”, thus, the foreign investor becomes the owner of the legal entity. persons and lands for agricultural purposes.

An alternative to this method is still the opening of a legal entity in Russia by two founders, a Russian and a foreigner, and according to Federal Law No. 101, the main condition is the distribution of shares in the authorized capital. A foreigner must own less than 50 percent of the company; in practice, this is no more than 25-30%. Then (after registration of the land transaction) the share of the citizen of the Russian Federation in this company is bought by a foreigner, who remains the sole owner and founder of this company.

And the third possibility of registering agricultural land for a foreign investor, in our opinion, is the most difficult in terms of time and collection of documents: a foreign company registered outside the Russian Federation opens a representative office (branch) in Russia, temporarily becomes a part of this company “Russian” and is issued an ordinary contract for the sale and purchase of a land plot by a legal entity.

Thus, knowing the current legislation of our country, you can register agricultural land in Russia in the ownership of a foreigner and it is quite simple to do this!

How is the deal made?

To sell a land plot to a foreign citizen, you must be guided by the legislation of the Russian Federation:

The sale and purchase agreement is concluded at the place where the property is located. Registration by a notary is not a prerequisite. Exception: for example, a house and a plot are purchased, and the objects have several owners. In other situations, you can prepare the paper yourself if you have an idea of ​​how to compose it.

The list of documents for the transaction is standard:

If the foreigner’s passport does not contain a translation of the information into Russian, then it must be done with certification from a notary. The residence permit will not cause any problems.

We add that a foreigner who wants to buy land or other real estate in Russia needs to remember about the obligation to pay taxes. You need to know that the rate for non-residents of the Russian Federation is increased. Perhaps it will be more profitable to first obtain Russian citizenship, and then think about your own home.

When a deal is prohibited

Despite the absence of special restrictions or prohibitions on the sale and purchase, the legislation still identifies a number of situations when this transaction is prohibited.

In particular, the following features must be taken into account:

  1.  In paragraph 3 of Art. 15 of the Labor Code of the Russian Federation established that non-residents do not have the right to acquire land plots located in border areas. The same applies to other territories established by special federal laws of the Russian Federation. Examples of settlements where such non-sale land is located are the Neklinovsky District, Taganrog and Azov.
  2. In the Federal Law “On the turnover of agricultural land” it is established that foreign citizens can receive plots of this type only on a lease basis, registration of property rights to them is not allowed by law.

Therefore, the permitted purposes of land use for non-residents will be as follows:

Obtaining agricultural land, in accordance with the legislation of the Russian Federation, is available only to citizens of the country.

According to Art. 20 of the Labor Code of the Russian Federation, if a foreign person has a plot that he inherited or on the right of permanent use, then it will not work to formalize it into private ownership with the help of the law “On dacha amnesty”. In this case, the procedure for registering land will take place in a general manner, with the obligatory payment of all necessary taxes and duties established for non-residents of the Russian Federation.

In addition, the following types of land are prohibited from purchasing for such persons:

As for the last point, the purchase of real estate by foreigners is prohibited in certain areas, which are enshrined in special legislative documents.

A complete list of these settlements is given in the Decree of the Government of the Russian Federation No. 508 of 07/05/2001.