Real estate in Russia
The present-day potential of the Russian commercial real estate market remains very high, while the volume of foreign investments is significant (their share, by certain specialists' estimates, is about 60%).
The provisions of Russian real estate law are provided for by the Constitution of the Russian Federation, the Civil Code, Land Code, Town-Planning Code and other relevant legislative acts.
Real estate matters are also regulated by regulatory acts, e.g. local acts in the cities of Moscow or St-Petersburg. Mostly, the local legislation affects the procedure of obtaining rights (ownership or lease rights) to plots of land from the local authorities and it may also contain technical and organisational regulations relating to the development.
As a general rule, foreign citizens and foreign legal entities may acquire rights to land on the same basis as Russian individuals and legal entities, with the exception of specific cases established by law. The restrictions of the rights to acquire land ownership rights to existing building or to construction that are applicable to foreigners are as follows:
- Foreigners are specifically prohibited from owning land plots in border areas (a list of which is to be drawn up by the President), or in other special territories of the Russian Federation.
- The Land Code of the Russian Federation stipulates that titles to land plots owned by state and local authorities may be granted to foreign legal entities and individuals only for payment, whereas in certain cases Russian legal entities and individuals are entitled to obtain land plots owned by state and local authorities free of charge.
- Foreigners are prohibited from owning agricultural land.
The Agricultural Land Law determines the rights to agricultural land that may be granted to foreign nationals and foreign legal entities (and stateless persons): those in this category may only lease agricultural land plots.
These restrictions are also extended over Russian legal entities in which the equity participation of foreign nationals, foreign legal entities exceeds 50%.
At present time in Russia the majority of land (outside cities and populated areas) is still categorised as agricultural land, consequently, it cannot be used for development or industrial purposes.
To use these lands for a purpose other than agricultural production, a landholder must first have the land reclassified to another category in accordance with its proposed use.
Registration of rights of foreign entities to real estate (except in relation to cases where foreign entities cannot own certain real estate objects) is carried out according to the same procedure as for Russian entities. Such foreign entity should provide all documents required for state registration and those documents issued outside of Russia should be apostilled/ legalized and translated.
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