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Learn about legal requirements for setting up and doing business in Ukraine
The regulatory environment and terms of registering and doing business in Ukraine improve every year, which is evidenced by the steady rising of Ukraine’s rank for conducting business in many international organizations.
As of today, the scope of documents and terms of registration of companies in Ukraine is reduced and usually does not cause much difficulty. These changes alter the attitude of foreign investors to Ukraine and increase the presence of foreign business in the country.
The most popular types of business companies that have shown themselves to good advantage in the eyes of foreign investors is a limited liability company, joint stock company and representative offices of a foreign company in Ukraine.
The easiest way to carry out an economic activity in Ukraine is registration of an individual, including a non-resident, as a private entrepreneur. Registration as a private entrepreneur means that such a person shall own business without establishing a legal entity. Information about the private entrepreneur is entered into the Unified State Register, it is public and may be verified at any stage of activity of such a person.
One of the advantages of registering as a private entrepreneur is the option to choose the simplified tax system, which greatly facilitates financial reporting to the regulatory authorities and allows individuals to apply reduced fixed tax rates on income. However, this type of business is not for all market actors, as it sets certain limitations on the amount of allowable annual turnover, the number of employees and admissible activities.
Although carrying out economic activities as a private entrepreneur with or without use of the simplified tax system provides several advantages, one should not forget about liability related to the activities of an individual in such a legal status. Private entrepreneurs are responsible for liabilities associated with business activities for the full extent of their assets. At that, the Ukrainian law does not provide for apportion of property used by the entrepreneur for his/her business activity from the bulk of assets owned by an individual. Therefore, on the basis of a court ruling a penalty may be charged on all the debtor’s property, regardless of whether it is used for business purposes or not.
In any case, a private entrepreneurship is the most mobile way of doing business in Ukraine, which does not require complex preparation of financial statements.
In Ukraine, entities may be established with a view to go beyond the limits set out for carrying out economic activities by private entrepreneurs, reduce the risk of the investor’s personal liability and be able to combine equity and assets to achieve common financial goals. The most common legal type of a legal entity for doing business is a limited liability company.
Both foreign legal entities and foreign nationals can be founders (shareholders) of an LLC. There are no limits in this respect, including the share size in the authorized capital. Thus, a foreigner or a foreign legal entity can own 100% in the company's authorized capital.
Registration of an LLC in the state register can be done within 24 hours. Receiving all registration documents, opening a bank account, and registering an LLC with the customs can take up to several working days.
A limited liability company being registered, such a company shall comply with certain formal requirements: the limited liability company founders shall develop a charter (the main statutory document of a company), whereby they specify the company name, information on the company management bodies, their competence, the procedure for adopting resolutions; the procedure for joining and withdrawing from the company.
For simplicity, company founders can use the model charter, a statutory document already drafted and maintained by the government. If they choose to adopt the model charter, they must specify certain details in their decision to establish the company, including the company name, list of founders, amount of charter capital, each founder’s respective interest or shareholding in the charter capital, and the form of contributions to the charter capital.
The founders shall appoint the director and determine the person in charge of the state registration with the state authorities in the minutes on the company establishment.
The founders’ presence while the charter and protocols being signed as well as at the registration procedure itself is not required. Signing statutory documents, registering the company, as well as receiving all the necessary documents may be exercised by an authorized representative on the basis of a notarized (legalized/apostilled) power of attorney.
The minimum size of LLC’s authorized capital is not determined by the legislation of Ukraine. Thus, the founders jointly determine the size of the shares at their discretion (optionally - their ratio). This means that the authorized capital can theoretically be UAH 1 or an amount in the national currency of Ukraine, equivalent to EUR 1/ USD 1. But in practice, evaluation of an authorized capital amount should be based on the fact that the company needs initial funding (e.g., for payment of rent, salaries, etc.) to support itself.
The contribution of a shareholder may be in cash, securities, or other property. An in-kind contribution must have a monetary value approved by a unanimous decision of the members’ general meeting.
The authorized capital shall be paid within 6 months from the date of state registration of the company unless otherwise stipulated by the company’s charter.
Shareholders of a limited liability company may be individuals and legal entities, including non-residents. In addition, these persons do not necessarily have to be located or reside on the territory of Ukraine. To confirm the data on the non-resident legal entities as shareholders, the state registrar shall be provided with an extract from the commercial, banking or other registry of the country of registration of such persons, which, if necessary, shall undergo the legalization or apostillization procedure. In addition, the ultimate beneficial owners of the company shall be disclosed while setting up the company. The ultimate beneficial owner of a company is any individual who exercises a decisive influence on the activities of a legal entity (including through a chain of control/ownership).
A limited liability company may be established by one shareholder, and the sole shareholder of a limited liability company (an individual) may act as the director of the company. The maximum number of members of a limited liability company is not limited.
Opting for a limited liability company as a legal type of business activity in Ukraine is attractive primarily due to the fact that shareholders are not liable for the obligations of the company. The shareholders assume the risk of loss related to the company’s activities within the scope of their contributions.
However, it should be noted that in the event of a shareholder’s personal debt, such as in case of his/her failure to satisfy creditors’ claims by his/her other assets, an enforced collection of the property of a limited liability company proportionate to the share of such a shareholder in the authorized capital is allowed. Thus, personal debts of a shareholder of a limited liability company may lead to cessation of her/his participation in the company.
The company's bodies are the general meeting of shareholders, supervisory board (in case it is created), and executive body. The general meeting of shareholders is the highest body of a company electing the supervisory board and executive body. The company’s executive body can be individual (“director”) or collegial (“board of directors” headed by a general director).
The general meeting of shareholders determines the company’s main activities and appoints the company director (board of directors) in charge of management over the company’s operational activities (unless otherwise provided by the charter).
The director on behalf of the company shall sign any contracts. Therefore, upon the appointment of the director, the charter and the employment contract shall clearly stipulate the powers of the director in order to prevent abuse on his/her part.
The supervisory board may be established to monitor the director’s activities in a limited liability company. In particular, the supervisory board competence may include electing the sole executive body or members of the company collegial executive body (any, all or some of them), suspending and terminating their powers, establishing remuneration to the company executive body members.
Upon establishment, as well as at further stages of a limited liability company’s activity, its funding may be carried out in several ways. This shall be done primarily by its shareholders’ contributions to the authorized capital, non-repayable financial assistance from the company’s shareholders or by providing a credit/loan by any of the shareholders to the company.
The Ukrainian law does not stipulate limits on the amount of credit that may be provided by shareholders to their company, but the shareholder granting loans shall take into account peculiarities of taxation of such loans and adhere to thin capitalization rules, as well as consider the requirements of the currency regulation of Ukraine, if such a loan is granted by a non-resident.
Another legal type that protects members against any personal liability for the company’s debts is a joint stock company. The legal regulation of liability of the shareholders of joint stock companies is very similar to the limited liability companies’ regulation. However, joint stock companies have their own features, such as an amount of the authorized capital (the minimum amount equals to approximately USD 39,000), the requirement to register and submit reports to the National Commission on Securities and Stock Market.
It should be noted that the joint stock company registration procedure is more complicated than that of a limited liability company. To establish a joint stock company the founders shall make notification of intent to create a joint-stock company, subscribe for shares, hold a statutory meeting and carry out a joint stock company state registration with a number of regulatory authorities.
A joint stock company is also distinguished by the special requirements to the content of the charter. The charter shall contain information on the types of shares issued, their nominal value, ratio of different types of shares, the number of shares purchased by the founders, consequences of default on the redemption of shares, the term and procedure for annual payment of dividends at the end of a year, etc.
A foreign company may exercise certain activities in Ukraine without establishing a legal entity. Such activities are carried out through representative offices of a foreign company in Ukraine, acting on behalf of the foreign company they represent. A representative office of a foreign company does not have its own charter, as it acts as a separate unit of a foreign company. A head of a representative office acts under the power of attorney issued by a foreign company.
The procedure for registration of a foreign company representative office significantly differs from the procedure of business entities registration. Thus, the Ministry of Economic Development and Trade of Ukraine carries out registration of representative offices by adopting a decision on registration within 20 days.
Foreign companies open their representative offices in Ukraine usually for the purpose of non-commercial activities, such as representation of their interests, data collection, market analysis or monitoring.
Foreign companies may also conduct commercial activities through their representative offices. In this case, the representative office must register as a permanent establishment with the tax authority and pay corporate income tax along with other applicable taxes in Ukraine.
One may enter the Ukrainian market by purchasing shares in an already established company in Ukraine. The main advantage of the purchase of shares in an existing company is the fact that it has already built a management structure, it has assets necessary for its activity, contractual relationships with partners and customers, as well as experience in specific areas and a certain market share. To reduce the risk of hidden liabilities a purchaser needs to conduct a detailed legal and financial audit (due diligence) of the firm.
When purchasing a stake in a Ukrainian company one needs to remember to follow the provisions of the Ukrainian anti monopoly law and seek merger clearance where applicable.
On 13 February 2021, the Law "On State Support of Investment Projects with Significant Investments" (hereinafter referred to as the Law) came into force. In addition to the sectors of state support for investment projects with significant investments and creation of new jobs, this Law, also defines the stimulation of economic development of regions and increases the competitiveness of Ukraine's economy.
A new type of investor has been distinguished – an investor with significant investments, as well as an investment project with significant investments. Moreover, the Law provides a number of benefits for such investors and defines forms (tools) for providing state support to investment projects with significant investments.
The Law provides for establishment of a special government agency that will support these investment projects, assist investors from the beginning and throughout project's process.
Under the Law, an investment project with significant investments must meet all the following requirements:
The Law stipulates that state support of investment projects with significant investments may be provided to an investor in the following forms:
Special investment contract is concluded for a period agreed by the parties, but not more than for 15 years. The contract defines the period of implementation of the investment project with significant investments, which may not exceed 5 years from the commencement date of the contract.
Information on the total amount of state support and the amount of actually provided state support under a special investment contract is public, entered in the register of investment projects with significant investments and published on the official website of the Ministry of Economy of Ukraine.
An applicant, who intends to implement an investment project with significant investments and receive state support, prepares and submits to the Ministry of Economy of Ukraine the following:
The investment project with significant investments is evaluated by the Ministry of Economy within 60 calendar days from the date of receipt of documents from the applicant. The Antimonopoly Committee of Ukraine, the Ministry of Finance of Ukraine, the Ministry of Justice of Ukraine, the State Ecological Inspectorate of Ukraine, and the local self-government body (if state support for implementation of the investment project with significant investments is provided by such body) must be involved in the evaluation of the investment project with significant investments. Other state bodies may be also involved in the evaluation due to the competence.
Based on the results of the evaluation of the investment project with significant investments, the Ministry of Economy prepares one of the following decisions:
State support will not be provided for implementation of investment projects in the sectors of renewable energy, crop production, and the financial sector.
Following categories of investors will not be able to be applicants for state financial support:
The main agreement, regulating relations between the employee and the enterprise is a labour agreement. Under the terms of such an agreement, the employee shall undertake to perform work determined in the agreement, and the enterprise shall pay salary to the employee and provide working conditions required for work performance.
The labour agreement may be entered into in the verbal or written form. However, Article 24 of the Labour Code of Ukraine stipulates cases where the written form of a labour agreement is mandatory.
This applies in particular to the following cases:
However, it should be noted that the fixed-term labour agreement may be entered into only in certain cases prescribed by law, such as when the labour relations may not be established for an indefinite period of time, given the work nature or its performance conditions, or the employee’s interests.
A special form of the labour agreement is a labour contract. The labour contract provisions may envisage its validity, rights, duties and responsibilities of the parties (including financial ones), employees’ benefits and conditions, the contract termination. Cancellation terms may also be set by contract of the parties thereto.
The scope of the labour contract is determined by law. Thus, paragraph 4 of Article 65 of the Commercial Code of Ukraine stipulates that the labour contract shall be concluded with the head of an enterprise.
The labour contract may not be entered into with the head of a representative office of a foreign company in Ukraine. Paragraph 4 of Article 65 of the Commercial Code of Ukraine envisages the option of the labour contract conclusion between the head of an enterprise and an enterprise, i.e. a legal entity. Since a representative office of a foreign company in Ukraine is not a legal entity, the representative office head is entitled only to conclude a written labour agreement.
The labour contract is essentially an agreement between a highly qualified employee and an organization for which he/she shall perform important work at a high level, achieve certain specific results crucial for the organization, while the organization shall undertake to agree to certain conditions for remuneration, powers, labour conditions, duration, termination provisions etc.
When entering into a labour agreement, the parties may agree on establishment of a probation period for the purposes of verification of the employee’s relevance to the job entrusted thereto. That said, a provision of probation shall be specified in the order (an instruction) on employment. If the employee refuses to undergo the probation, the labour agreement shall not be deemed as concluded.
Within the probation period, employees shall be governed by the labour legislation. This means that, on the one hand, the employee is required to perform all work duties assigned to him/her by law and a labour agreement, and on the other hand, the probation does not entail any restrictions of labour rights, including salaries as well.
The probation period at employment may not exceed three months, and in certain cases, as agreed upon with the respective body of a trade union organization, six months. If the employee has been absent from work within the probation period due to a temporary disablement or for other good reasons, the probation period may be extended for the respective number of days, within which the employee has been absent.
If the probation period is over, and the employee continues to work, he/she is considered to have passed probation successfully, and subsequent termination of a labour agreement shall be allowed only on common basis. If within the probation period the employee’s inconsistency with the job, for which he/she was employed, has been established, the employer shall be entitled to terminate the labour agreement.
Employees’ normal working hours may not exceed 40 hours per week. This being the case, working hours may not exceed the established periods for certain categories of employees. Thus, for workers aged 16 to 18, as well as workers employed in jobs with hazardous working conditions, working hours may not exceed 36 hours per week.
A five-day working week with two days-off shall be established for employees as a rule. In exceptional cases where the introduction of a five-day working week is impractical, a sixday working week with one day-off may be established. The working week duration shall be determined by the employer or the body authorized by the employer as agreed upon with the elective body of a primary trade union organization.
As a rule, overtime work shall not be allowed. The owner or the body authorized by the owner may use overtime work only in exceptional cases such as in case of necessity to complete the work started due to the result of unforeseen circumstances or accidental delay due to production conditions, which cannot be completed within normal working hours.
The remuneration that the employer shall pay the employee for the performed work is determined by the labour agreement parties. This remuneration may not be lower than the minimum salary. It is worth noting that the minimum salary is a legally set amount of salary for simple, unqualified labour.
Salaries in Ukraine are paid in the Ukrainian currency.
Salaries shall be paid to the employee regularly on working days in the period established by the collective contract or a normative act of the employer, at least twice a month, not later than after 16 calendar days. If the pay day coincides with a day-off, holiday or non-working day, salaries shall be paid in advance.
Employees are entitled to a leave. In this case, employees shall be given both annual and additional leaves. The annual basic leave shall be given to employees for the period of at least 24 calendar days per working year worked. The annual additional leave shall be given to employees for work under harmful and severe working conditions, for specific character of work and in certain other cases. The legislation of Ukraine also stipulates a compensation for all unused days of the annual leave.
The important issue in labour relations is the procedure of dismissal, involving several grounds, such as the labour agreement or work permit expiration or the labour agreement early termination on the grounds provided by law at the initiative of the employee or the employer.
The procedure of the labour agreement termination on the employee’s initiative depends on whether such an agreement is entered into for an indefinite or the definite (termed) period of time. The employee shall be entitled to terminate the labour agreement entered into for an indefinite period of time by way of sending a two-week notice to the employer in writing.
In case the employee’s letter of resignation was caused by impossibility to continue working (movement to a new place of residence; transfer of a spouse to a job in another locality; entry to an educational institution; impossibility to live in this locality proven by the medical opinion; pregnancy; care of a child until it reaches the age of fourteen years old, or of a disabled child; care of an ill family member according to the medical opinion, or of a person of the first disability group; retirement; competitive employment, as well as for other good reasons), the employer shall terminate the labour agreement within the period requested by the employee.
The termed labour agreement shall be subject to early termination at the employee’s request in case of his/her disease or disablement, which prevents work performance, violation of the labour legislation, a collective or a labour agreement (a contract) by the employer, and in cases, provided for termination of a labour agreement entered into for an indefinite period of time on the employee’s initiative.
As for the dismissal on the initiative of the employer, the labour legislation of Ukraine defines a number of reasons for this, in particular:
The employee dismissal on the employer’s initiative shall not be allowed within the period of the employee’s temporary disablement (except for dismissal in case of absence from work within more than four successive months as a result of temporary disablement), as well as within the period of his/her staying on leave. This rule, however, shall not apply to cases of full liquidation of an enterprise.
To start working in Ukraine a foreign employee shall obtain a work permit in Ukraine. Getting a work permit is required also for employees of foreign companies sent to Ukraine to perform certain work or provide services under contracts with Ukrainian companies.
It is not a foreign national but an employer (company) who has to apply for a work permit. A work permit is issued to a particular person for a particular staff position (workplace). Therefore, a work permit in Ukraine is limited (it does not grant an unlimited access to the Ukrainian labour market) and tied to a particular employer.
A work permit is valid for the period specified in the labour agreement (the contract), but not more than for one year. For special categories of foreigners and foreign seconded employees a work permit is issued for up to three years. Ukrainian laws do not set a limit on the number of work permits in Ukraine. The application for renewal of a work permit must be submitted at least 20 calendar days before expiry date of a work permit in Ukraine.
A work permit in Ukraine is not required when it comes to:
Under the general rule, a work permit is valid for two years. However, exceptions apply in certain cases such as allowing work permits of up to three years for seconded employees and internal corporate assignees.
Work permits may be issued for shorter periods to be indicated in the employer’s application.
The previous condition for a special minimum monthly wage has been abolished. Now, the standard minimum wage requirement of UAH 8,000 (approximately USD 193 as of late 2024) applies.
Having obtained a work permit, a foreign citizen and an employer (a company) shall enter into a labour agreement (a contract) and submit a certified copy of such an agreement to the employment centre within 10 working days upon its signing.
Having obtained a work permit, a foreign citizen and an employer (a company) shall enter into a labour agreement (a contract) and submit a certified copy of such an agreement to the employment centre within 10 working days upon its signing.
On 1 July 2021 the Law “On Amendments to Some Legislative Acts of Ukraine on the Agricultural Land Circulation” (hereinafter referred to as the Law) came into force. This Law introduced the land market in Ukraine. Since the date of the Law coming into effect, agricultural land owners are entitled to sell their plots.
In the past, land owners could only lease the land.
The following individuals and entities are entitled to acquire up to 10,000 hectares of the agricultural land:
The following individuals and entities are prohibited to acquire the participatory interests in the authorized capital, the shares in, and be the members of legal entities (owning the agricultural land):
The abovementioned restriction does not apply to the foreigners owning the participatory interests in the authorized capital and being the bank ultimate beneficiaries.
Banks can also acquire the agricultural land ownership, but only under the procedure of enforcing recovery on them as on the pledged property. Such land plots shall be alienated by the banks at the land auction within two years from the date the ownership has been acquired.
Foreign nationals and Ukrainian legal entities, participants or ultimate beneficiaries of which are foreigners, will be allowed to purchase agricultural land in Ukraine only after the relevant decision has been made by the national referendum. The timing of such a referendum has not yet been set by the legislation.
Under all conditions, the following individuals and entities are prohibited to own the agricultural land:
It is prohibited to:
On 20 October 2019, the Law of Ukraine “On Concession” (hereinafter referred to as the Law) came into force. On the one hand, the Law facilitates the increase of investment (including foreign investment) in order to upgrade and extend the infrastructure and provide high quality services of social significance. On the other hand, the Law creates conditions that will enable investors to profit from participating in a public-private partnership.
The Law has been developed in accordance with EU laws, which control the issue of a public-private partnership. When drafting the Law, the authors considered the international experience of concession projects implementation, which should considerably improve the Ukrainian investment climate in general, and eliminate some administrative barriers during concession projects implementation.
The Law introduces several positive novelties, aimed at simplifying the involvement of private capital of both domestic and foreign investors in public-private partnerships. The key novelties are as follows:
Concession can be used for the implementation of projects in all fields of economic activities, except for the objects, which fall under the restrictions for concession according to the Ukrainian legislation.
The concessionaire may be supported by state in the following forms:
Any legal entity (both domestic and non-resident), an association of legal entities (Ukrainian and /or non-resident) which fulfilled the requirements to acquire the status of a participant can take part in the selection procedure under concession. However, it should be pointed out that only a Ukrainian legal entity can become a concessionaire (a party to the concession agreement). This means that if the concession tender is won by a non-resident legal entity, such a legal entity shall register a legal entity under the Ukrainian law in order to enter the concession agreement.
The concessor can select the concessionaire based on one of the following options:
For the organization and holding of a concession tender, the concessor forms the tender committee that includes representatives of relevant authorities, local government, the concessionaire, trade-union organizations. The tender committee evaluates the competitive proposals and provides conclusions as to the best terms of concession implementation as offered by the tender participants.
According to the decision of the concessor, the tender participants might be obligated to secure their competitive proposals by means of a guarantee or in other form, the amount of which cannot exceed 1% of the expected volume of capital investments of the project to be carried out under the terms of concession.
By results of consideration and assessment of all competitive proposals the tender committee within 30 calendar days from the date of deadline for submission of competitive proposals,prepares a conclusion about the winner of the tender. The results of the tender are subsequently published on the official website of the concessor.
Another way of identifying the concessionaire is a competitive dialogue which is partly regulated by the rules for holding a concession tender. Competitive dialogue is applied if a concessionaire may not clearly identify technical, qualitative characteristics of the project, or if it is unknown what technical, financial and legal solutions may be offered by potential tenderers. In this case, the negotiations with the participants should be held to allow for an optimal solution (e.g., in case of implementation of innovative projects, large complex infrastructure projects, etc.).
According to the Law, the tenant, with which the lease (agreement) was entered into before the Law came into force and which has duly complied with its obligations under the state property lease agreement and which intends to implement investment project on the terms of concession with the use of the leased property, may apply to the concessionaire for public-private partnership under the terms of concession. Meanwhile, the validity period of concession agreement may not exceed the period remaining until the lease term expires, but obligatorily should be at least 5 and not more than 50 years.
According to the results of the concession tender, competitive dialogue or direct negotiations with the tenant of state property, the concessor shall enter into a concession agreement with the concessionaire.
Among the terms and conditions which should be included in the concession agreement the Law shall stipulate the following terms and conditions:
Concession agreement may include other terms and conditions as agreed upon by the parties, in particular: conditions of the use of national materials during the concession, those of employment and involvement of citizens of Ukraine, conditions of use of intellectual property rights, those of financing by a concessionaire the construction of related infrastructure facilities (railways, highways, engineering communications, etc.) and other terms as agreed upon by the parties. Prior to the execution of the concession agreement, the concessionaire has the right to involve third parties (contractors, suppliers and others), for which actions it will bear full liability.
An important provision of the Law, which protects the investor’s rights, is the provision that the terms and conditions of the concession agreement shall be valid for the entire duration thereof, including the cases when after entering thereinto the rules will be introduced by legislative acts, which will worsen the concessionaire‘s situation.
Concession agreement should be entered into for the period which should be fixed thereby and should be at least 5 years and not more than 50 years. It should be noted that the concession contract period as to the construction and further operation of highways should be at least 10 years.
Concession agreement should provide for receipt by the concessionaire of payment from the users (consumers) for the publicly significant services provided by the concessionaire with the use of the object of concession.
Concession agreement may provide for the concessionaire's payments to the concessionaire and/or vice versa. The conditions and procedure for making such payments shall be determined by a concession agreement in accordance with the Law. Concessionaire’s payments in favor of the concessionaire shall be possible, if the concessionaire may not receive full reimbursement of the investment made by it at the expense of the users (consumers) of services.
Any actions as performed by the concessionaire in relation to the concession object (its complete construction, major repairs, reconstruction, technical re-equipment, etc.) do not result in acquiring by the concessionaire the ownership of such a constructed or reconstructed object. The ownership of concession object shall remain with the state or territorial community. Upon termination of concession agreement, such an object shall be returned to the concessionaire.
Concessionaire has the right to lease a part of the property constituting a part of the concession object, if it is stipulated by concession agreement. In such a case, concession agreement should contain an exhaustive list of the property which may be leased, as well as the terms of its lease.
As regards the movable property which was purchased by the concessionaire to perform the concession agreement, the concessionaire remains the owner of such property, unless otherwise provided for by the concession agreement.
The land plot of state or communal ownership, necessary to implement the concession project, shall be leased to the concessionaire for the term of concession agreement in the manner stipulated by the Land Code of Ukraine. The preparatory measures necessary to lease the land plot to the concessionaire, in particular development of land management documents and formation of the land plot required to implement the concession project, may be taken due to the concessionaire’s efforts and at the expense of state or local budgets. The costs for development of the above mentioned documents may be reimbursed by the concessionaire in accordance with the terms and conditions of the concession agreement.
Unless the concessionaire acquires through the concessionaire’s fault within one year from the date of concession agreement the right to lease the land plot necessary to implement the concession project, and if such a fact results in the concessionaire's failure to comply with its obligations and liabilities under the concession agreement, it shall have the right to terminate the concession agreement.
The Law enshrines the principle of a free choice of law that will apply to the concession agreement. However, if the applicable law is not chosen in the concession agreement, then such an agreement shall be governed by the law of Ukraine.
In accordance with the Law, the parties to the concession agreement may also freely choose the mechanism of dispute resolution, including mediation, non-binding expert evaluation, national or international commercial or investment arbitration, including arbitration with location abroad (if concessionaire is a foreign-owned enterprise/company within the meaning of the Law of Ukraine "On Foreign Investment Regimes"), and procedural rules for dispute resolution.
Trademark registration in Ukraine is conducted by the State Enterprise "Ukrainian Intellectual Property Institute" (hereinafter referred to as “Ukrpatent”).
Any person wishing to obtain legal protection to its trademark should file appropriate request along with the supporting documents to the Ukrpatent in order to receive relevant certificate indicating that such trademark is included into the State Register of Trademarks of Ukraine (hereinafter referred to as “the Register”).
Pursuant to the Law of Ukraine “On Protection of Rights to Marks for Goods and Services” (hereinafter referred to as “the Law”), the request shall consist of:
Any individual or legal entity has the right to receive a certificate. An applicant with an earlier date of an application filing with Ukrpatent or, if priority is claimed, an earlier date of priority (provided that the application is not deemed withdrawn, has not been withdrawn, and Ukrpatent has not rejected trademark registration), has the right to receive a certificate.
The request (as well as the supporting documents) is further examined by the Ukrpatent in order to assess its compliance with the legal requirements under the Law. Usually this process may take up to 24 months from the date of submission of application. However, there is an option for fast-track registration, in which case it will be possible to register your trademark 6 within months.
If successful (and upon payment of the applicable state duty), the decision on issuance of a certificate on registration of a trademark is published in the official bulletin of the Ukrpatent and the relevant entry is made in the Register.
The scope of legal protection provided includes a trademark image and a list of goods and services entered in the State Register of Trademark Certificates of Ukraine and is certified by a certificate containing a copy of a trademark image and a list of goods and services entered in the Register. The certificate is valid for 10 years following the date of submission of the application and can be prolonged every 10 years (subject to payment of the state fee).
Under paragraphs 1 and 2 of Article 18 of the Law, no one other than the former owner has the right to re-register the trademark during two years following the termination of the certificate unless the owner of the terminated certificate consents to the registration of the trademark.
Furthermore, pursuant to the Law, any person may register a trademark in foreign jurisdictions.
According to the Madrid Agreement Concerning the International Registration of Marks 1891 and the Protocol Relating to that Agreement 1989, the application for international registration of a trademark shall be submitted through the Ukrpatent along with the payment of national fee.
Even if the international application for a trademark is approved, the Ukrpatent shall also conduct expertise of a trademark application pursuant to Ukrainian law. Therefore, there might be cases when a trademark is approved for registration under the Madrid Agreement, but is not granted protection pursuant to Ukrainian legislation. It is always worth checking whether a trademark enjoys legal protection under Ukrainian legislation with the Ukrpatent.
While out-of-court settlement and pre-dispute resolution procedures could be very useful and, probably, the most correct way for resolving any disagreements regarding use of a trademark, it may not be the most efficient option in order to get the violator to stop breaching the IP rights.
Pursuant to the Law the owner of the trademark may demand the violator to stop breaching the IP rights and reimburse incurred losses. In particular, the owner has the right to demand the removal of the goods, the product packaging, labels, badges, or other object attached to the goods with the illegally used trademark, including prohibiting storage of such product, its subsequent offering for sale, import and export. Furthermore, the owner may prohibit use of a trademark by other persons during offering and provision of any services for which the trademark was registered, including in business documentation or in advertising and in the Internet or even to demand destruction of the images of such trademarks.
Unfortunately, under the current state of affairs the violators rarely agree to stop breaching IP rights in Ukraine in the out-of-court settlement arrangements. However, we advise the lawful owners of trademarks to use any pre-trial procedures only upon gathering of enough and proper evidence base against the violator, with which it would be easier to prove the violation in court in case of unsuccessful out-of-court settlement.
We also note that any pre-trial procedures are not mandatory under the Ukrainian legislation, and any person may choose to refer to the court immediately upon discovering of a violation.
In the event that the out-of-court settlement has not resulted in elimination of the violation, the rightful owner of a trademark has only one option, which is to refer to a court.
Pursuant to the Law, the main methods of protection of the breached trademark right in courts are:
The dispute is heard in a commercial court of the general jurisdiction of Ukraine. The dispute shall be resolved within two months following receipt of a claim. However, a court may prolong the term for resolving a dispute by 15 days, if there are some special circumstances present in the case and taken into consideration by the court.
Pursuant to the Law of Ukraine “On Protection from Unfair Competition”, unfair competition is any action in the competition, contradicting trade and other fair customs in economic activities. Unfair competition in this sense also includes: use of name, commercial brand, trademark, advertisement, packaging, other marks and periodicals, etc., without consent of the business entity which has been using such marks previously or use of similar or identical marks, which results in confusion with activities of such entity.
Thus, the peculiarity of antimonopoly protection of a trademark is that it could be enjoyed by a person not on the basis of the document (certificate), but based on the actual primacy of use by the owner of such trademark.
The Antimonopoly Committee of Ukraine performs the following activities during implementation of the antimonopoly policy of Ukraine:
Use of unfair competition practices leads to a fine of up to 5% of income from turnover of the entity for the last fiscal year. Limitation period for any unfair competition violation is three years from the date of commitment or, in case of the on-going violation, from the date of the completed violation.
An updated register of intellectual property rights (IPR) is now published on the Unified State Information Web Portal “Single Window for International Trade”. The weekly update of the register is another step in the implementation of customs legislation reform in the field of intellectual property rights protection.
The reforms are intended to bring the provisions of Ukraine’s customs legislation in line with EU standards and practices. They will help to increase the level of prevention of and counteraction to the goods’ transfer that violates intellectual property rights across the customs border of Ukraine, and, as a consequence, to purify the domestic market from pirated and counterfeit products.
To register an IPR object in the customs register, the applicant submits a written application to the State Customs Service of Ukraine for registration of an IPR object in the customs register or sends its scanned copy by electronic means. An application can also be submitted in electronic form using information and telecommunication systems of the State Customs Service.
It should be noted that, as of today, the application may include several objects of intellectual property rights at the same time.
The following documents shall be attached to the application for registration of an IPR object in the customs register:
The term for the application processing is 30 working days from the date of the application registration. During this term, the IPR object is either registered or rejected from registration in the customs register of Ukraine.
After registration of the object of intellectual property rights in the customs register of IPR objects, the customs authorities of Ukraine shall take actions to ensure the protection of IPR based on such register’s data. In particular, in case of revealing the goods suspected of violating the IPR, the goods customs clearance is delayed based on the customs register. Delay of goods customs clearance (except for perishable goods) may also occur at the initiative of the customs authority of Ukraine. The right holder and the declarant are notified on the delay on the day of the relevant decision.
By responding to the notification, the right holder confirms or does not confirm the conclusion of the customs authority that the goods are charged with violating IPR, or reports that the goods are original, and notifies of his/her intention or lack of intention to take cooperation actions or gives consent to renewal of their customs clearance. Whereas, the declarant sends the objection or the consent of the goods’ owner to the destruction of the goods (the absence of objections constitutes consent).
Based on the right holder’s and the declarant’s answers, destruction of goods with delayed customs clearance may be carried out on charges of violating the IPR. In case of agreement between the right holder and the owner of the goods, there is also a possibility of preterm release of goods with delayed customs clearance on charges of violating the IPR. It is allowed to change the identification marks or markings on the goods or their packaging in the process of customs clearance to eliminate the signs of violation of intellectual property rights, provided that such actions are agreed with the right holder or done at their request.
It should be emphasized that the reimbursement of costs associated with the storage, as well as the destruction of goods with delayed customs clearance on charges of violating the IPR, is carried out at the expense of the right holder. It is worth noting that actions to ensure the protection of IPR do not apply to original goods.
The key legislative act regulating data protection in Ukraine is the Law of Ukraine “On Personal Data Protection” No. 2297-VI, dated June 1, 2010 (the “Law”)
The Law applies to individuals and legal entities that perform any actions or a set of actions, such as collection, registration, accumulation, storage, adaptation, modification, updating, use and dissemination (distribution, sale, transfer), depersonalization, destruction of personal data, including with the use of information (automated) systems.
The Law may not apply if the data is processed:
Data controllers must comply with the following obligations:
The Law also sets out certain requirements for securing protection measures during the processing of data.
The law provides the subject of personal data with a wide range of rights regarding the processing of his or her personal data, including:
Personal data may be transferred to foreign parties to relations related to personal data only if the relevant state ensures proper protection of personal data in cases established by law or an international agreement of Ukraine.
It is assumed that the following countries provide such level of protection:
The Cabinet of Ministers of Ukraine determines the list of states that ensure adequate protection of personal data.
Personal data may be transferred to foreign subjects of relations related to personal data also in the case of:
Martial law is a specific legal regime introduced in Ukraine or in some of its regions in the event of armed aggression or threat of attack, threat to the state independence of Ukraine, its territorial integrity and provides for the provision of the relevant state authorities, military command, military administrations and local self-government bodies with the powers necessary to avert the threat, repel armed aggression and ensure national security, eliminate the threat to state independence.
Due to russia’s military aggression since February 24, 2022, President Volodymyr Zelenskyy signed Decree No. 64/2022 “On the Introduction of Martial Law in Ukraine”, which is regularly updated at the legislative level (every 90 days).
Mobilization includes a set of measures to ensure that the national economy, state bodies, local governments, enterprises, institutions and organizations are ready to operate in wartime conditions. It covers the transition of their activities to the war regime, as well as the training of the Armed Forces of Ukraine, other military units and civil defense forces for wartime operations.
Mobilization in Ukraine is carried out in accordance with the Constitution of Ukraine, the Law “On Mobilization Training and Mobilization” and other legal acts. On May 18, 2024, the new Law No. 3633-IX “On Amendments to Certain Legislative Acts of Ukraine on Certain Issues of Military Service, Mobilization and Military Registration” came into force, which introduced significant changes to the mobilization process, including:
Certain categories of citizens are granted a deferment from conquistion for military service during mobilization in Ukraine in accordance with the law. In particular, deferment is granted to:
The deferment shall be granted on the basis of relevant documents confirming the existence of these circumstances. The decision to grant the deferment is made by the TRC. For more information on the procedure for deferment, see Law of Ukraine “On Mobilization Activities and Mobilization”.
In the context of mobilization, persons subject to call-up may be granted a deferment of mobilization for the duration of the circumstances that constitute grounds for granting the deferment or for the duration of the booking. The deferment is granted by territorial recruitment centers (TRC) and commissions on the basis of submitted applications and justifications. Resolution of the Cabinet of Ministers of Ukraine of May 16, 2024 No. 560 “On Approval of the Procedure for Conscription of Citizens for Military Service during Mobilization, for a Special Period”.
The grounds for extending the deferment are checked, in particular, with the help of the Unified State Register of Conscripts, Persons Liable for Military Service and Reservists.
In the context of mobilization, businesses can book key employees to ensure the continuity of important production and functional processes. This applies to employees whose activities are critical to the functioning of enterprises, organizations or institutions. The procedure for booking employees, who are critical to the economy and defense, is determined by the Law of Ukraine “On Mobilization Activities and Mobilization”.
Since July 2024, Ukraine has introduced electronic booking through the Diia portal. This significantly speeds up the process and reduces the workload of ministry employees. The booking procedure takes about an hour, and decisions are made automatically based on checks in the registers.
The Law of Ukraine “On Licensing of Types of Economic Activity” defines a list of types of economic activity that are subject to mandatory licensing. In particular, such activities include:
See the full list of activities subject to licensing here in the Law.Licensing procedure
Procedures may differ slightly depending on the type of activity. Specific laws and regulations regulate in detail the procedure for getting and renewing licenses for specific types of activities.
Some licenses and permits can also be obtained through the Diia portal. For example,
During the martial law, the Government of Ukraine simplified the procedures for construction at complex facilities by regulating the possibility of obtaining permits for construction activities under a simplified declarative procedure.
Construction companies working on CC2 (medium level of consequences) and CC3 (significant level of consequences) objects can submit the relevant declarations online through the Diia portal and offline through the Administrative Services Center. Such class facilities include multi-storey residential buildings, administrative institutions, healthcare facilities, office premises, manufacturing enterprises and infrastructure facilities.
Starting from August 2024, foreign companies operating through permanent representative offices in Ukraine can also benefit from this opportunity.
The initiative is aimed at ensuring fast and high-quality reconstruction of infrastructure facilities and opening the construction market to foreign investors.
In addition, the Law came into force, according to which, during the period of martial law, the right to carry out certain actions in relation to economic activities or types of economic activities may be acquired by a business entity on the basis of submission of a declaration on conducting economic activities to the relevant licensing authorities free of charge without obtaining permits, except for those types of economic activities, the list of which is determined by the Cabinet of Ministers of Ukraine.
Ukraine has the right to impose sanctions to protect its national interests, security, sovereignty and territorial integrity. Sanctions may be imposed by Ukraine against a foreign state, a foreign legal entity, a legal entity controlled by a foreign legal entity or a non-resident individual, foreigners, stateless persons and entities engaged in terrorist activities.
In particular, on February 22, 2023, the President of Ukraine implemented the decision of the NSDC on sectoral sanctions against all financial institutions of the russian federation.
The sanctions cover hundreds of russian banks and tens of thousands of financial institutions, including banks, non-bank credit organizations, operators of payment systems, insurance companies and other financial institutions registered in russia. They provide for the termination of relations with russian financial institutions, suspension of financial obligations to them and a ban on servicing payment instruments issued by these institutions.
The State Register of Sanctions provides free public access to up-to-date information on legal entities and individuals subjected to sanctions. This resource can be used to verify sanctioned entities. Currently, the Ukrainian Sanctions Register contains more than 10 thousand sanctioned individuals and more than 7 thousand sanctioned legal entities.
On March 8, 2022, the National Bank of Ukraine once again updated its regulatory framework regarding the operation of the financial system during wartime by adopting Resolution No. 44 “On Amendments to Resolution No. 18 of the Board of the National Bank of Ukraine dated February 24, 2022”. The new resolution imposes additional restrictions on entities associated with russia and belarus, which are recognized under Ukrainian law as the states engaged in armed aggression against Ukraine.
Resolution No. 44 provides for restrictions on:
Ukrainian financial institutions are prohibited from conducting expenditure transactions on the accounts of the above-mentioned entities, except for the expenses to support the Armed Forces of Ukraine, payments to government agencies, social benefits, payroll, utility bills, taxes, levies and other mandatory payments.
In addition, Ukrainian financial institutions are prohibited (with certain exceptions) from conducting foreign exchange transactions:
The purpose of these restrictions is to prevent the withdrawal of funds by the beneficiaries of such companies and their use in russia. In practice, this can lead to the blocking of funds of such companies.
“Diia” (lit. “State and Me”) is a portal that brings together government services in one place. Diia makes it easier to do business in Ukraine by significantly reducing administrative barriers and simplifying the process, which is of great interest to foreign investors.
Diia is a brand of the digital state and an ecosystem of projects that includes:
Currently, much of the information on the portals is available only in Ukrainian.
Foreign residents can register on the Diia portal if they have a taxpayer registration number (TIN) and an open account in a Ukrainian bank or a residence permit. Non-residents are required to complete the BankID identification procedure. For correct operation of the Diia portal, it is important that the bank, with which the account is opened, supports the BankID system.
1. Registration and doing business, e-Entrepreneur:
2. Tax services:
3. Getting permits and licenses:
Through the Diia portal, you can apply for licenses and permits to conduct certain types of activities in Ukraine, in particular:
4. Electronic signature:
5. Reservation:
6. Getting official extracts from the registers that may be required for legal or financial transactions.
7. Interaction with government agencies:
8. Citizenship and immigration:
However, note that each service on the Diia portal has its own access requirements, and it is quite a challenge to list the terms and conditions of each. For more information, see the website. For example, registering as a sole proprietorship through the Diia portal is not available to foreign citizens. However, using Diia by you and your partners in Ukraine can significantly simplify communication and reduce administrative barriers.
Diia.Business is one of the components of the Diia portal. It is a national project for the development of entrepreneurship and exports implemented by the Ministry of Digital Transformation of Ukraine and the Office for Entrepreneurship and Export Development.
The Diia.Business online platform offers:
However, the Diia.Business portal cannot be used to register/close a sole proprietorship or LLC, these functions are available only on the Diia portal.
The offline component of Diia.Business is a network of entrepreneur support centers where you can get free consultations, participate in educational events for business, rent premises for events, and test your product at a specially equipped pop-up location. Diia.Business Entrepreneur Support Centers are located in Odesa, Poltava, Uzhhorod, Bucha, Ternopil, Kryvyi Rih, Kremenchuk, Lutsk, Rivne, Warsaw, and at the Taras Shevchenko National University of Kyiv (for students).
The Center has been operating in Warsaw since May 2022. The following services are available there:
