New agricultural legislation in Latvia
The new Latvian law "Law on Land Privatisation in Rural Areas” came into effect 1 July 2017. The law introduces limitations on how much agricultural land you can buy / own as a company or private individual in Latvia. The law is related to agriculture land only. As HD Forest focus on forest land, we assess that the new law has limited or no influence on investment for new or existing HD Forest clients.
Below is described a summary of changes in connection with the new law. The biggest problem is for large companies, which already own more than 4,000 hectares of farmlands, that they are forced to sell now. The law might influence agriculture land prices on short time as the number of potential buyers are being limited. There is, however, discussion that the law is violating EU-rules and therefore might be revoked by the EU-system. How much time this process will take is uncertain.
Highlights of the new Latvian “Law on Land Privatisation in Rural Areas”
- Only citizens/legal entities of EU, European Economic Zone, Swiss Confederation or from countries, with whom Latvia has concluded international agreements on investment protection can acquire land. If citizens/legal entities outside the above countries already own land, they must sell within 2 years, unless they can declare further use of agricultural land and get an approval by the local municipality
- Companies that own any land in rural areas must inform the municipal council of any shareholder changes
- Higher Latvian language proficiency requirements for foreign individuals, who are purchasing farmland in Latvia
- Restrictions for citizens/legal entities alone to own no more than 2,000 hectares or 4,000 hectares if owning with another holding company or group of companies
- Large scale owners must provide written confirmation that they will begin to use the land for farming purposes within one year after it is purchased
HD Forest has an agricultural expert in our office, so please contact us should you have any questions or concerns.