Land rights for foreign investors in Belarus
1) Can a foreign company/foreigner acquire land in the host country, and what forms are permitted: ownership, long-term lease, sublease, servitude?
According to the Land Code of the Republic of Belarus, foreign legal entities are not entitled to acquire land plots into ownership and may only obtain them under lease.
As for the similar restriction established for foreign citizens and stateless persons, there are a number of exceptions that allow private ownership or lifelong inheritable possession of land plots designated for residential houses, summer houses, or garden houses.
Such exceptions include cases where land plots are inherited, allocated for the maintenance of inherited property, acquired together with property as a result of a transaction or pursuant to a court order, or transferred as a result of marriage with a citizen of the Republic of Belarus followed by division of property.
2) Are there restrictions on land categories (agricultural/non-agricultural, border areas, strategic plots, coastal zones) and on size/duration of ownership/use?
A list of land plots that may not be transferred into private ownership is established by law, regardless of whether the land user is a resident of Belarus, a foreign legal entity, a foreign citizen, or a stateless person.
These include land plots designated for: agricultural use; environmental protection, health, recreational, or historical and cultural purposes; forest and water funds; roads and other transport infrastructure; and public use. In addition, land plots on which real estate objects that may only be in state ownership are located; territories subject to radioactive contamination; areas of proven mineral deposits; and land designated by urban planning documentation for purposes that exclude transfer into private ownership cannot be granted into private ownership.
Such land plots, in certain cases, may be granted under other forms of land use rights.
Legislation provides for restrictions on the size of land plots allocated for the construction and maintenance of residential houses, for gardening and summer house construction, and for farming. In other cases, the size of the land plot is determined on the basis of the purpose of allocation and local conditions.
For leased land plots, the lease term is established by the lease agreement: for land plots owned by the lessor under private ownership - without limitation; for state-owned land - depending on the purpose, but not exceeding 99 years.
For example, the minimum lease term for agricultural land is 10 years; for land plots intended for the construction and maintenance of capital structures (buildings and facilities) - not less than the normative period of their construction and/or operation, unless a shorter period is requested by the right holder; and for land including a water body (or part thereof) transferred under lease - not longer than the lease term established for such use.
3) What is the best way to structure the transaction: purchase of shares in a local landholding company, direct land acquisition, long-term lease through an SPV, concession, or PPP?
The answer depends on the purpose for which the land is required, as well as whether a suitable plot has already been allocated or remains available for allocation. A foreign investor may acquire land through a lease auction conducted by the local executive authority; however, use of such land, particularly for construction purposes, without establishing a local legal entity may be highly inconvenient. In some cases Belarusian entities can obtain land without auction (e.g., for specific purposes or in rural areas), but for a foreign entity this option exists only by Government decision based on a Presidential act or instruction.
If the land is already held by a Belarusian legal entity, acquiring control over that landholder is often the most efficient way to secure use of the plot for its designated purpose, or to change its designation in accordance with the law.
For large infrastructure projects, land may be obtained under concession agreements or public-private partnerships (PPP). While a foreign investor may participate in a tender or act as a project initiator, the private partner in a PPP must be a Belarusian legal entity, in which the foreign investor may hold shares or stocks. Concessions do not impose this restriction, although access to benefits and incentives is generally tied to the status of a Belarusian entity.
Additionally, land may be granted without auction to investors, including foreign ones, for construction of capital structures under investment projects included in the list of preferential projects or registered investment agreements. Local executive committees maintain lists of plots reserved for investment agreements, with specific projects designated for development on those sites.
4) What approvals and permits are required (government, municipality, land commission, antimonopoly authority), and how long does the process usually take?
In the case of acquiring a lease right as a result of a land auction, the land plot is already registered, and only the lease right itself needs to be registered. The procedures for formalizing the auction results and registering the lease right take up to 1 month.
When entering into an investment agreement, the process of negotiating the terms of such agreement with the Government, signing it, and registering it in the register of investment agreements may take 6 months or more. Subsequently, on the basis of the investment agreement, materials for the preliminary approval of the location of the plot with determination of its area will be developed, and after the development and approval of the design documentation, the plot will be allocated to the investor. The duration of each procedure is 1-2 months, or longer in the case of obtaining the President’s consent for the use of forest or agricultural land. The overall term depends on the time required for the development, approval, and examination of the design documentation.
A PPP agreement must be concluded within 12 months from the date the winner of the tender is determined, the duration of which is established in the decision of the state partner. If the initiative comes from the private partner and no other expressions of interest are submitted within 30 days, the agreement may be concluded without a tender through direct negotiations. Subsequently, a procedure similar to the conclusion of an investment agreement will apply.
A concession agreement must be concluded no later than 3 months from the date of signing the protocol on the results of the tender (auction); taking into account the preceding procedure and the subsequent need to adopt a decision on granting the plot, the total period may not be less than 12 months.
The approval of the antimonopoly authority may be required in cases of acquiring control over a local land user where such transaction is considered an economic concentration upon meeting the criteria set out by law. The period for issuing such approval generally does not exceed 2 months from the date of submission of the application and required documents. In addition, time should be taken into account for carrying out due diligence of the land user, holding negotiations, and concluding the M&A transaction.
5) How is land due diligence conducted: boundaries, cadastre, encumbrances, servitudes, disputes, mortgages, designated use, environmental and urban planning restrictions?
Land plot due diligence is carried out on the basis of documents and information provided by the current land user, including documents relating to capital structures located on the land plot, as well as data obtained from state resources. The analysis covers the legal capacity of the seller and the existence of restrictions on disposal (such as enforcement bans or bankruptcy), the actual condition of the real estate objects and their compliance with documentation, the history and rights to the real estate objects, and any restrictions or encumbrances affecting such rights.
As part of urban planning due diligence, taking into account applicable urban planning projects, the analysis includes the possibility of long-term use of the land plot for the same purposes, or the change of its designated use for the implementation of an investment project.
6) Is it possible to change the designated use of land (re-zoning) for the project, what is the process, timing, risks of refusal, and possible appeals?
Yes, it is possible to change the designated use of land (re-zoning).
The decision is taken by the competent executive authorities (local executive committees, FEZ administrations, or the administration of the Great Stone Industrial Park), while agricultural and forest lands require approval by the President.
Where land is granted for the construction and maintenance of capital structures, rezoning is decided simultaneously with the permit for design and construction works. If the previous designation was connected with construction that has not been completed, in certain cases additional payments for changing the designation may apply.
The process usually takes up to two months, and key risks include statutory prohibitions for certain land categories, non-compliance with planning regulations, and possible refusal on environmental or safety grounds.
7) What mechanisms exist to protect rights: registration of title, title insurance (if available), contractual penalties, international arbitration, investment agreements/stabilization clauses?
In Belarus, state registration of rights to a land plot is mandatory, with a registration period not exceeding six months from the date the grounds arise; the exact duration depends on the type of right - for example, allocation by a government decision or a transaction involving a capital structure. Only registered rights are subject to judicial protection.
Title insurance is not provided; risks may be partially covered through general types of insurance (e.g., liability insurance). Contracts may include penalties, fines, or compensation, but these do not protect against state decisions.
The law also provides for compensation when land is seized for public needs - covering the market value of demolished capital structures, land improvements, and greenery, but not less than what is required to construct a similar object.
When an investment agreement is concluded, in addition to benefits, additional guarantees may be provided: stabilization clauses, if provided for in the regulatory act governing the implementation of the investment project, and the choice of foreign arbitration for dispute resolution if the matter cannot be resolved through negotiations - either ad hoc arbitration under the UNCITRAL rules, or the ICSID, with the participation of the investor’s home state under the 1965 Washington Convention, or another arbitral institution, taking into account the content of the investment agreement and applicable international treaties.
8) What are the tax and payment aspects: land tax, lease payments/indexation, VAT/profit tax on disposal, incentives for priority investment projects, transfer pricing in land transactions?
Land tax is payable on land plots granted into ownership or permanent use, which is not available to foreign investors. For land plots granted under lease, rental payments are due. The amount of annual rent is determined on the basis of the cadastral value of the land plot and coefficients ranging from 0.00025 to 0.03, depending on the type of its functional use. The amount of rent may be revised in the event of a reassessment of the cadastral value by decision of a state authority or a change in the type of functional use upon the lessee’s application with the execution of an additional agreement to the lease.
When a land plot is granted within a free economic zone to its resident for the implementation of an investment project, a fixed amount of rent is established, which remains unchanged throughout its validity period and applies after the expiry of the rent exemption. Rent exemptions are also provided in certain other cases, generally related to socially oriented projects, as well as for all land plots granted for the construction of new capital structures - during the first year of their operation.
Lease rights, in cases where rent has been paid, may be the subject of an agreement on the assignment of rights and obligations under the lease agreement. In such a case, the turnover from the disposal of property rights is subject to VAT.
Transactions involving rights to land plots may be subject to transfer pricing control if the relevant conditions are met (for example, a foreign trade transaction with a related party).
Authors: Maxim Lashkevich, Polina Sachava, Taisiya Pakhomskaya
