Foreign Ownership of Georgian Farmland; Amendments to the Existing Ban

On February 7 2014, the Georgian parliament read a draft amendment to the current ban on foreign entities, and foreign-invested companies, from purchasing  farmland in Georgia. The current ban has been in place since June 2013, and has effectively brought new foreign investment in Georgian agribusiness to a halt.


One aspect of the amendment is to exempt banks from the ban, which is a welcome relief; most banks in Georgia have foreign shareholdings and so mortgage business had become a perplexing issue for them. Hopefully this will apply also to banks domiciled outside Georgia, and local microfinance lenders, to provide a competitive environment in the farm finance sector.

In place of the blanket ban on land purchase by foreign-invested entities, the draft proposes that a government-appointed panel consider all potential acquisitions of land by foreign-invested entities. The criteria for approval, and the processing time, and appeals process, are not yet clear.

This is a move in the right direction, but it is to be hoped that any approvals process will be prompt, transparent, and take into consideration the huge contribution that foreign investment in the Georgian countryside can make to poverty alleviation, food security, human resource development and Georgia’s balance of trade.




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