Latvia: On 1 May 2014, new rules on acquisition of agricultural land in Latvia will come into force.
On 1 May 2014, new rules on acquisition of agricultural land in Latvia will come into force
Since joining the EU, Latvia has preserved restrictions on natural and legal persons from other countries who wish to purchase agricultural land in Latvia. For instance, citizens of other EU Member States could acquire agricultural land only if the purchaser had been personally registered in Latvia as an autonomous farmer, had permanently lived in Latvia for at least three years and had continuously worked as a farmer for at least three years. Additionally, companies wishing to purchase agricultural land had to fulfil certain conditions, such as: at least 50 % of their registered capital had to belong to citizens of Latvia or of other EU Member States.
As of 1 May 2014, citizens of other EU Member States and Latvian citizens will be subject to the same rules on acquisition of agricultural land in Latvia. However, a new set of restrictions is currently being elaborated to be applied in the same manner to citizens of all countries.
Due to an allegedly high percentage of speculative deals with agricultural land in Latvia, whereby numerous companies – often using foreign capital – acquire agricultural land solely due to their relatively low price as a future-oriented investment yet with no intention of performing any agricultural activity, the Latvian government has decided to amend the relevant laws in order to restrict these practices. According to the draft amendments, in future all natural or legal persons wishing to purchase agricultural land will have to prove that they have generated income from farming for at least last three consecutive years and that they fulfil eligibility criteria under the single area payment scheme; they will also have to commit themselves to using land which they purchase predominantly for agricultural purposes. In addition, legal persons have to show that the company employs people with a degree in agriculture or that their majority shareholder holds the same or a comparable degree.
The amendments are envisaged to come into force on 1 May 2014.
Source: Law on Land Privatisation in Rural Areas