The current legislation of Ukraine provides equal opportunities for its citizens and non-residents concerning a purchasing of housing or commercial real estate. In particular, real estate property may be bought by private persons, who are individual foreign citizens, or legal persons, which are foreign companies.
At the same time, there are arisen many legal risks at purchasing of real estate by non-residents. First, these risks include risks connected with possible failure to comply with established procedure by law at drafting sale and purchase agreements, and at making payments for purchased real estate. Second, these are risks to deal with cheats on real estate market of Ukraine (who illegally re-sale somebody’s real estate or do not pay for purchased real estate).
Support of real estate lawyer
To mitigate the stated above risks, real estate lawyers of our Law Office provide a set of legal support services for foreign client in purchasing of real estate on a “turnkey” basis, which include the following:
- consultation in necessary legal issues;
- legal due diligence of apartments and offices in new buildings (if real estate is purchased in new buildings);
- legal due diligence of real estate on secondary real estate market;
- drafting of consent of husband or wife to purchase real estate (if a buyer is married);
- development or review of a sale and purchase agreement;
- support at payment of taxes, registration payments and others.
Important! If necessary, we communicate with a client in English.
Selection and due diligence of real estate
We are ready to select housing real estate or commercial real estate under a proper request and in accordance with specified characteristics. Both for own needs of non-resident client and for investing with purpose of sale or lease in the future. Herewith, on a mandatory basis, there is conducted the procedure “due diligence” of a seller, real estate and sale and purchase agreement, which includes the check of:
- title property right/ right to use the land;
- permits for construction and taking into operation;
- proprietary rights to real estate, absence of encumbrances and arrests to property;
- person of a seller (developer/owner of property): reputation in media, absence of litigation and court enforcement actions, tax or any other debts;
- history of real estate, transferring of ownership.
Note! For the present, foreigners are not entitled to purchase agricultural lands in Ukraine. But when purchasing a country house, for example, a foreign citizen along with title to this building may acquire a title to adjoining lands.
Obtaining registration taxpayer card
To purchase real estate, a foreigner has to be registered as a taxpayer in Ukraine that is to draw up a taxpayer card (identification code) by applying a proper application to the State Fiscal Service authority. It is necessary to add to the application passport of a person with translation certified by official translator and Ukrainian notary.
If a buyer of real estate is a foreign legal person, so instead of obtaining an identification code, it is necessary to be registered in a proper State Fiscal Service authority by applying the Extract from Trade Register along with the application which is a verification of the company registration in a proper jurisdiction (with apostille on the specified document and translation into Ukrainian).
Payment via bank investment account
For the present, cash payment for real estate cost by a foreigner is prohibited in any way. As this settlement procedure grossly violated the current legislation of Ukraine. Money as payment for real estate should be transferred only by cashless: from foreign bank account of a non-resident to an investment account opened in Ukraine. Then, finances are entered to a proper bank account of non-resident (seller of real estate).
So, the opening and use of investment account is safe and effective method of payment for real estate. Due to it, the payment procedure by a foreigner will be the following:
- preparation of necessary document identified a person of foreigner;
- preparation of necessary documents verified the source of funds (it may be a statement on salary receiving, dividends from business, statements on payments of taxes and others.);
- opening of investment account in one of Ukrainian banks;
- then transferring of money to this account in foreign currency from abroad;
- conversion of foreign currency into Ukrainian hryvnia;
- after signing the real estate sale and purchase agreement in Ukraine, the transferring of the specified money to the current bank account of a seller.
Note! Purchasing of real estate is not regarded as economic investment in terms of the current legislation, even the cost of purchasing is exceeded a proper line (equivalent is 100 000 USA Dollars). Economic investments provide establishment of own business in Ukraine by a foreigner (e.g., registration of LLC), or a contribution of money to the authorized capital of an existing company.
At the same time, in some cases, it is possible to contribute money for formation of an authorized capital of enterprise and then spend them for purchasing of real estate. Thereby, it will be hereby investment which allows to a foreigner to obtain a permanent residence certificate in Ukraine.
If you have questions concerning the purchasing of real estate by foreigners and the procedure to make investments, the lawyers of the Law Office of Andriy Lotysh give legal consultations in the office (Kyiv city, 77 Sichovykh Striltsiv Street, office 407) or online (skype, zoom) by an appointment.