Home / Economy / Business Ombudsman Offers a Number of Changes to the Draft Law on the Sale of Farmland to Foreigners

Business Ombudsman Offers a Number of Changes to the Draft Law on the Sale of Farmland to Foreigners

The Georgian Parliament has not yet begun to discuss the draft amendments to the law on the sale of agricultural land, which should resolve the issue of sale of land to foreign citizens – a corresponding project has already been prepared by the Ministry of Justice and sent to the Parliament.

In particular, the Business Ombudsman’s Office isagainst the amendment, according to which, the authorization to sell agricultural land to a foreign citizen must be issued by the local assembly of the region or the Ministry of Agriculture.

The Business Ombudsman’s Office considers that the participation of administrative bodies in the process of sale of land will create additional administrative barriers. In addition, there is a claim to  the maximum allowable area of land for sale within 100 hectares.

“We believe that establishing a maximum limit will slow the development of agriculture, in particular, willmake the implementation of major projects more problematic, which in the case of adoption of this law will be unprofitable as sometimes 100 hectares  are too small for a successful project,” – say in theOmbudsman’s Office.

Business Ombudsman also speaks out against the rules providing for the sale of agricultural land only to those foreign nationals who have 5 years of  experience in the agricultural sector of Georgia – in his opinion, any additional requirements complicate procedures for investors who are not able to start business activities in the country.

The bill also provides for a ban on the sale of land to legal entities registered abroad. According to the Ombudsman,  the  international organizations such as the International Finance Corporation, the European Bank for Reconstruction and Development, Asian Development Bank, the German Development Bank, World Bank, etc, should be allowed to agricultural land as an exception.

“These organizations carry out major agricultural projects in Georgia, and they should have thisopportunity. They implement direct loan programs jointly with the Georgian banks or independently. There are cases when these organizations invest in the  companies registered in Georgia, respectively, ifthis fact is not taken into account, then there may be negative consequences, “- the Business Ombudsman believes.

The Office also offers not to impose restrictions on those foreign nationals who had already bought land in compliance with the legislation before   the law came into effect .

According to the Business Ombudsman’s Office, the final recommendation was the only one that was considered by  the bill developers, while  the rest were ignored.

Recommendations and comments were sent to the Ministry of Justice on 22 September.

The bill provides for a ban on the sale of agricultural land to foreign nationals or companies registered in Georgia by foreigners in the 5 km area from the borders and border areas established by the government.

Natural or legal persons established in Georgia by foreign nationals can acquire agricultural land only if they have experience in agricultural activities in the country for at least 5 years; individuals are also required to have a residence permit in Georgia.

Under the law,  the foreign nationals or companies with foreign participation will be required to purchase at least 5 and not more than 100 hectares of land.