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Ukraine is an emerging market presenting a big potential. The total land of Ukraine is about 603,700 sq km. The country shares borders with Hungary, Moldova, Poland, Romania, Russia, and Slovakia, and has a population of 48 million. The largest city is Kiev, which is also its capital. Ukraine became independent in 1991 when the former Soviet Union was dissolved. Shortly after its independence, the Ukrainian government liberalized most prices and erected a legal framework for privatization. The country has rich agricultural land, strong scientific facilities, an educated and skilled workforce, significant coal, and moderate oil and gas reserves. In 2002, Ukraine's real GDP rose 4.8 percent and industrial product output grew by 6 percent. According to the Economist Intelligence's forecast, Ukraine's annual real GDP may reach 6 percent for 2003 despite the poor grain harvest in the third quarter. The Ukraine's FDI inflow was $792 million in 2001 according to the World Bank report. More current figures were unavailable as of this writing. The Economist Intelligence Unit reports a 2002 FDI for Ukraine of $693 million, and projects an increase to $800 million for 2003, and remaining steady for several years. Similarly, the Ukraine Deputy Minister of Economy reported at an April 2004 European Business Association presentation that the volume of direct foreign investments in 2004 would not fall, but remain the same as 2003, for which he indicated there were "1.3 times more investments than in 2002."
A parliamentary system of government with separate executive, judicial, and legislative branches is exists in Ukraine. The president nominates the prime minister, who must be confirmed by the parliament. The 450-member unicameral parliament (Supreme Rada) initiates legislation, ratifies international agreements, and approves the budget. Its members are elected to four-year terms. Political parties in Ukraine include former communists, socialists, agrarians, liberals, nationalists and various centrist and independent forces.
Shortly after becoming independent, Ukraine named a parliamentary commission to prepare a new constitution, adopted a multi-party system, and adopted legislative guarantees of civil and political rights for national minorities. A new, democratic constitution was adopted on June 28, 1996, which mandates a pluralistic political system with protection of basic human rights and liberties.
According to the constitution, Ukrainian is the only official state language. In Crimea and some parts of eastern Ukraine areas with substantial ethnic Russian minorities, Russian as a language is permitted by local and regional governments for local official correspondence.
Official trade unions have been grouped under the Federation of Trade Unions. A number of independent unions, which emerged during 1992, among them the Independent Union of Miners of Ukraine, have formed the Consultative Council of Free Trade Unions. While the right to strike is legally guaranteed, strikes based solely on political demands are prohibited.
As reported by the media in the first quarter 2004, construction cranes are everywhere in Kiev, the Ukrainian capital city. Many have believed that the real estate fever may soon spread to the rest of the country. Housing prices doubled in 2003, reaching up to US$1,000 per square meter in downtown Kiev. For now, the boom is primarily centered in Kiev and the industrial cities of Donetsk, Dnipropetrovsky and Kharkiv. In the last decade, more than 80 percent of the Ukrainian population has purchased various kinds of immovable property and the market’s annual turnover exceeds $3 billion, with more than 500,000 sale agreements made, involving approximately 3 million citizens.
There is no licensing requirement to practice in Ukraine except when the transaction is conducted with the real estate of the state enterprises, in which case the license is provided by the Fund of the State Property of Ukraine.
Ukrainian Realtors® Association was established as a non-profit public organization in 1995. Its members are from 23 regions of Ukraine. While the creation of Association was initiated by the recognition of the necessity for an independent body capable of public regulation of real estate practitioner activity, there was also a common interest in the development of a highly efficient and dynamically growing real estate market in Ukraine.
The main objective of the Ukraine Realtors® Association is to unite real estate specialists with common problems and interests, defending their rights and lobbying their interests in the supreme state power bodies, and extending their possibilities in entrepreneurial, methodical and technical development. The Ukrainian Realtors® Association is working to improve prestige of real estate related professions.
A new Land Code was adopted by the Ukrainian Parliament on October 25, 2001. It became effective on January 1, 2002. The adoption of the code was a significant step toward the land reform even though some of the important provisions will not take effect until January 1, 2005, including allowing agricultural land to be traded and used as collateral.
The most significant part of this code is the private ownership of land. The previous code was limited to individuals only and the transition of land was only possible in restricted circumstances. Lands are divided into several major categories, such as agricultural lands, lands for residential construction, lands for industry, transportation, energy. The procedure for land re-classification has been simplified due to the shift of authority from the Parliament to local Councils.
Since January 1, 2002, any legal entity or individual has been allowed to acquire non-agricultural land excluding beaches, roads, and strategically important state-owned lands, such as railways, airports, pipelines, etc. Foreigners enjoy the same ownership of non-agricultural land as Ukrainian residents do without incurring significant limitations.
Under Ukraine's law, no special permits or licenses are required for a foreign investor to purchase Ukrainian real estate. However, an approval in purchasing a real property for the purpose of accommodating a foreign diplomatic organization from the Ukrainian Ministry of Foreign Affairs or local state authority is needed prior to registering the property. Foreign residents are permitted to own non-agricultural land within city limits when acquiring buildings and structures for the purpose of construction. They can also acquire the ownership of the non-agricultural land located outside of the city limits if they purchase the structure(s) on the land. Nevertheless, non-residents need to receive approval from the Cabinet of Ministers and the Parliament if they want to purchase the state-owned land. Some conditions apply. For instance, the foreigner has to register a permanent establishment in Ukraine before he/she can buy state-owned and municipal land.
- Lymar, Anton and Onishchenko, Sergei, Ukrainian Legal Development: New Land Code, April 2002
- Ukraine Country Commercial Guide FY 2003
- Colliers, Real Estate Review 2001 - Ukraine
The Ukrainian Realtors® Association (URA) was established in 1995 in the capital, Kiev. It unites members from 23 regions of Ukraine. The primary mission of the Association is to unite real estate specialists with common problems and interests, defending their rights and lobbying their interests in the supreme state power bodies, extending their possibilities in entrepreneurial, methodical and technical development. URA is a member of the Central European Real Estate Networks Association (CEREAN), formed in 1995 as a regional umbrella group for Central and Eastern Europe. In 2002, URA signed a bilateral agreement with NAR.
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