On 30 August 2022, the Parliament of Ukraine registered Draft Law No. 7711 on regulating land relations to ensure swift implementation of investment projects during martial law, which is aimed at expediting the construction of industrial and production facilities. The enactment of this law will transform the current Ukrainian manufacturing and production sector into one that is attractive to investors. This target will be reached by, among others, shortening terms of land acquisition and easing zoning and construction procedures.

The Draft Law creates special regulations for investment projects that will restore Ukraine’s economy. According to the Draft Law, these economic restoration projects must comply with the following requirements in order to be approved:

  • They must be an investment of at least EUR 500,000;
  • They must be an industrial construction or rehabilitation projects (except for landfills of household and industrial waste and wastewater sumps); and
  • The implementation term cannot be more than three years.

According to the Draft Law, the following simplified procedures will apply to an economic restoration project:

  • reduction of the term for land acquisition;
  • exemption from the mandatory refund of agricultural losses (in case construction takes place on agricultural land);
  • “tacit consent” when applying for urban planning conditions and restrictions, and construction permitting documents;
  • opportunity to obtain grid-connection technical conditions before obtaining the right to carry out construction work or at the pre-commissioning stage; and
  • possibility to commence construction even if the designated purpose for the land does not correspond to its functional zoning.

These new provisions will be available during the period of martial law and for ten years following its conclusion. To apply these rules, investors should requests the Ministry of Economy, which considers the application and passes the request to the Cabinet of Ministers for the latter to add the recovery project to a special list, which the cabinet oversees.

The following entities will be restricted in the use of these eased rules:

  • governmental and municipal authorities;
  • companies listed in the Financial Action Task Force (FATF), registered in offshore jurisdictions, and lacking transparent corporate structure (i.e. lack of an ultimate beneficial owner or UBO);
  • businesses with Russian ties; and
  • sanctioned business entities.

The Draft Law awaits adoption by the Ukrainian parliament and the President’s signature. The law’s final text is not yet available and CMS will follow up with updates when the law's final form has been released.

For more information on Ukraine’s new zoning, construction, and land title acquisition procedures, contact your regular CMS advisor or local CMS experts: Natalia Kushniruk, Anna Pogrebna.

Legislation: Draft Law No.7711 “On Amendments to Legislation Regarding the Land Relations to Ensure Swift Implementation of Investment Projects”

LINK: https://www.cms-lawnow.com/ealerts/2022/09/ukraine-passes-law-to-make-war-recovery-projects-more-attractive-to-investors?cc_lang=en