Right of foreign citizens to buy properties and to acquire ownership rights on immovables in the Republic of Serbia

Rights of foreign persons (natural and legal) to acquire the right of ownership on immovables on the territory of the Republic of Serbia through legal transactions inter vivos (purchase and sale agreement, deed of gift, life care contract, and alike) and legal transactions mortis causa (through inheritance) are stipulated by the Law on Basis of Ownership And Proprietary Relations (“Official Gazette of SFRY”, Nos. 6/80 and 36/90, ” Official Gazette of SRY”, br. 29/96 and ” Official Gazette of RS”, No. 115/2005 –state law –hereinafter referred to as: the „Law“).

Provisions of the Law stipulate that foreign natural and legal persons conducting activities in Serbia may, under terms of reciprocity, acquire the ownership rights on immovables necessary for conducting of such activities, while foreign natural and legal persons not conducting activities in the Republic of Serbia may, under terms of reciprocity, acquire ownership rights over apartment in residential building as may the other citizens of the Republic of Serbia.

The question of reciprocity required for acquisition of immovables is not stipulated by the said Law. Therefore, the view is that such acquisition does not require the existence of contractual (diplomatic) reciprocity with a related foreign country, but that it is sufficient if legislature of such country allows for acquisition of immovables to foreign persons under the conditions that are not materially more difficult than the conditions prescribed by the domestic Law, as well as that in practice the citizens of the Republic of Serbia are equally allowed to acquire immovables on the territory of such country (factual reciprocity).

With respect to acquisition of rights over immovables through legal transactions inter vivos by natural persons, the Republic of Serbia has established mutual reciprocity with a small number of countries. In some of such countries the reciprocity is explicitly contractual, while with some of them such reciprocity exists through application of the most favoured nation clause. Those are the following countries: Great Britain, United States of America, The Kingdom of Holland, and Japan.

With respect to the other countries with which reciprocity is not contracted, the Ministry of Justice – based on the legal regulations of such countries where this matter is regulated i.e. through exchange of notes – has established the existence of reciprocity with many countries such as: Israel, Iran, Ireland, Italy, Japan, Armenia, South African Republic, Jordan, Republic of Kazakhstan, Canada, China, Cyprus, Lebanon, Latvia, Lithuania, Lichtenstein, Luxembourg, Hungary, Malta, Morocco, Mexico, Moldova, Germany, New Zealand, Norway, Panama, Peru, Poland, Portugal, Russian Federation, Romania, the United States of America, Singapore, Syria, Slovakia, Slovenia, Turkey, Uzbekistan, Ukraine, Finland, France, Holland, Croatia, Montenegro, Czech Republic, Swiss Confederation, Sweden, Spain, United Arab Emirates, Azerbaijan, El Salvador, Qatar, Cuba, Senegal, Yemen, Georgia.

With respect to the countries not indicated here, the procedure of reciprocity establishment may be ongoing and therefore it is necessary in such cases to address the Ministry of Justice for clarifications.

Regarding acquisition of ownership rights over agriculturalland, Article 1 of the Law on Agricultural Land (“Official Gazette of RS”, Nos. 62/2006, 65/2008 –state law, 41/2009, 112/2015 i 80/2017) explicitly stipulates that foreign natural i.e. legal person may not be owner of agricultural land. Article 2 of the same law defines that agricultural land is the land used for agricultural production (fields, gardens, orchards, vineyards, meadows, pastures, fish ponds, reed plainsandswamps) and the land that may be converted to the use in agricultural production.

The exception with respect to transactions with agricultural land relates to the citizens of the European Union member countries, who may acquire agricultural land as private property to the maximum of 2 hectares through a legal transaction with compensation or without compensation under the following conditions: (i) if the foreign citizen has permanent residence of minimum 10 years in the local self-government where transaction on agricultural land is performed; (ii) if the foreign citizen cultivates the agricultural land subject to legal transaction for at least 3 yearswith or without compensation;(iii) if the foreign citizen has a registered agricultural economy with active status in the capacity of a holder of the family agricultural economy in accordance with the law arranging agriculture and rural development, and in continuity of minimum 10 years; (iv) if the foreign citizen has possession over mechanisation and equipment for performance of agricultural production.

Subject of legal transaction may only be the land in private ownership: (i) if such land is not the agricultural land intended by specific laws for the purpose of construction land; (ii) if such land does not belong to protected natural resources; (iii) if such land does not belong to or does not border with military facilities and military compounds, and if it is not located within th protected zones around the military facilities, military compounds, military objects and objects of military infrastructure; if it does not belong to and does not border with the Ground Security Zone.

Agricultural land in private ownership located at up to 10 km from the state borders of the Republic of Serbia may not be subject of such legal transaction.

Foreign natural persons may, under reciprocity terms, acquire the right on immovables located on the territory of Serbia through inheritance under the same conditions as domestic citizens.

With respect to the countries where contractual reciprocity does not exist relative to the rights of ownership on immovables through inheritance, the view deriving from long years of practice suggest that establishment of reciprocity is not required for each individual state. It should be rather presupposed that each country recognises our citizens the right to inherit immovables until proven otherwise, which means that foreign citizens may inherit immovable property on the territory of the Republic of Serbia based on the supposed factual reciprocity where the interested parties may present their evidence to the contrary.

Attorney at law Stefan Mojsić

The information contained herein has been provided only for the purpose of general information and cannot be considered as a legal opinion or legal advice. Accordingly, the Law Firm Petrovic Mojsic & Partners disclaims all responsibility and accept no liability in respect to actions taken or not taken based on any or all the contents contained herein.