Who can buy land from an industrial park?
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One of the most vital resources and assets of industrial parks in Ukraine is their land. For business owners, it is undoubtedly advantageous to swiftly acquire a land plot owned by the municipality, which comes with the following benefits:
- Located in a convenient area.
- Designated for the appropriate purposes.
- Comes with already approved local urban planning documentation.
In other words, within the industrial park itself.
A company can purchase land within an industrial park if it is a lessee or sublessee of a municipal land plot as either the managing company of the industrial park or one of its participants, or if it is associated with the industrial park through some other entity.
However, it is of utmost importance to ensure proper preparation, formalization, and implementation of all necessary measures to obtain property rights to the land. Business owners, in most cases, strive to gain full control over all fundamental assets, including land, to minimize business risks, and this aspiration is well-founded.
The primary focus today is on how the managing company, participants, or other entities of the industrial park can acquire a land plot within the park's territory.
This article will explore the available options. If you seek advice tailored to your specific case, feel free to consult directly with our specialists.
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How to obtain a land plot in an industrial park through lease or sublease?
To have the opportunity to acquire a land plot in an industrial park, the first step is to become its lessee or sublessee. In the terms of the Ukrainian Law "On Industrial Parks," this could mean being recognized as the managing company of the industrial park, a participant, or another entity associated with the industrial park.
According to the Land Code, only the managing company can obtain land owned by the municipality within the industrial park, and this can be achieved through a lease agreement.
Subsequently, the managing company can sublease the rented land to participants and other entities within the industrial park, granting them the right to develop it.
In cases where the initiator of the industrial park's creation is the lessee, the leased land or its parts can be directly subleased to participants and other entities of the park without the lessor's consent, unless otherwise specified in the land lease agreement.
Please note! We recommend preliminary dividing the territory of the industrial park into several plots, each of which can be subsequently subleased.
If there are no buildings with assigned postal addresses within the territory of the industrial park, companies won't be able to become its participants and take advantage of the benefits provided for them by the legislation. However, this is a separate issue, and we can also offer you comprehensive consultations regarding conducting activities within the industrial park.
The matter of leasing and alienating land presents some challenges. The initiator of the industrial park's creation may:
- Lease out (sublease) land plots.
- Alienate real estate objects (including land) within the boundaries of the industrial park to the managing company or participants.
However, the provisions of the Land Code only allow leasing land to the managing companies of industrial parks. The simplest option is to take a land plot on sublease and, after constructing and commissioning a real estate object on it, purchase it as private property.
Another practical issue is that the Land Code stipulates a requirement for leasing land for a minimum term of 30 years, but often there might not be the need or possibility for such a long-term lease.
Nevertheless, our company is familiar with legitimate ways to address these matters.
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How to acquire ownership of a leased or subleased municipal land plot within the industrial park?
The Land Code allows for the possibility of purchasing the land plot by the owner of the immovable property situated on that land.
It's essential to note that the presence of buildings or facilities (such as industrial or warehouse structures) on the land serves as strong evidence for the legitimacy of the land plot's transfer.
The procedure for exercising this right is outlined in the land legislation.
The sale price of the land plot is determined by the respective local council and may be equal to or higher than the expert monetary appraisal paid in advance by the buyer.
To initiate the land acquisition process within the industrial park, follow these steps:
- Submit a formal application to the local council. In the application, provide details about the land plot's location (cadastre number), intended use, size, and area. Additionally, include your consent to enter into a contract for the advance payment of the land plot's price.
- Attach necessary documents that confirm your ownership rights to the immovable property located on the land plot, legal entity information, copies of the land plot's lease or sublease agreement, and the agreement related to the establishment and operation of the industrial park or any agreements regarding economic activities within the park.
- The local council will review your application within one month and make a decision regarding the development of the land management project for allocating the land plot (if such a project is required) and/or conduct an expert monetary appraisal of the land plot. If the council decides to refuse the sale, they will provide valid reasons for the rejection.
- Once the price is determined, the local council will proceed to finalize the sale of the land plot at the specified price.
Our company can assist you, including providing well-founded justifications for implementing payment installment plans for land acquisition, for a duration of up to five years (the maximum period permitted by the legislation).
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Payment of land tax when acquiring land in an industrial park
Land tax is a compulsory payment imposed on landowners for their land plots.
It is essential to note that the right to ownership of the land comes into effect upon the state registration of such ownership. Until the date of state registration, the payment is made in accordance with the terms specified in the land lease or sublease agreement.
However, local councils have the authority to grant exemptions or reductions in land payments (rental fees, land tax) for lands designated for industrial use, where industrial parks listed in the Register are located.
As a result, users and owners of land plots within industrial parks may benefit from full or partial exemption from land payments for a certain period.
It is crucial to be aware that such decisions might have specific considerations during periods of martial law (prior to its cancellation or termination) and different implications after its conclusion, falling under the scope of the Law of Ukraine "On State Support to Business Entities." Our goal is to develop an optimal strategy to help you achieve your objectives and assist you in implementing it effectively.
We are here to simplify the entire process for you, from obtaining the right to manage the land plot to acquiring full ownership rights.
If you have any inquiries concerning the registration of industrial parks in Ukraine or any other matters related to their activities, please feel free to reach out to us.