Do amendments of the Law on Agricultural Land actually limiting foreigners in the purchase?

On 1 September 2017 recently adopted amendments of the Serbian Law on Agricultural Land (the „Law“) have entered into force. The intention of the proposers was to mitigate the effects of the Stabilization and Association Agreement, more precisely, its provisions which equalize the rights of EU citizens to purchase agricultural land with the rights of the Serbian citizens.

But, was it actually accomplished with these latest amendments?

The adopted amendments have introduced specific conditions for EU citizens to purchase agricultural land in private ownership, only if they: i) have at least 10 years of permanent resident in municipality where the land is located, ii) cultivate respective agricultural land for at least three years, iii) have the registered agricultural farmstead for at least 10 years, and iv) owns mechanization and equipment necessary for cultivation of the land.

Respective land may not be located within 10 km from the external borders of Serbia and maximum surface which each EU citizen may acquire amounts to 2 ha. Republic of Serbia is also entitled to pre-emption right over respective land, according to the added provisions.

Since the above mentioned provisions pertain to the EU citizens only – meaning natural persons, nothing was said explicitly about the prospects of the foreign companies and the companies owned by foreign entities. So far, it was possible for foreign investors to establish the company in Serbia and it was allowed for these companies to acquire agricultural land without any particular and additional limitation. It derives that this practice would not be altered after these last changes.

Moreover, the amended provisions pertain to the land in the private ownership only, while those in the ownership of the state or local authorities were not envisaged by the amendments, meaning that no additional prohibitions were introduced in this type of transactions.

It remains to be seen whether adopted changes will lead to any particular and practical effects, since they pertain only to one group of the potential investors, but also, to particular type of the land.

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