Ukraine

Ilyashev & Partners Law Firm has acted as a legal advisor to the Ukrainian enterprise Technological Synthesis Ltd on the privatization of the unified property complex (UPC) of the State Enterprise “Ukrainian State Research Institute of Special Steels, Alloys and Ferroalloys”. SE Ukrniispetsstal is a leading research institution in Ukraine specializing in the development of new steel grades, alloys, and production technologies. It serves as a strategically important facility for scientific research in the metallurgical industry. Located in Zaporizhzhia, SE Ukrniispetsstal operates a pilot plant with a full metallurgical cycle, including smelting, forging, rolling, heat treatment, and powder production. The implementation of this project will allow the investor to consolidate production and scientific capacities within the metallurgy sector. Technological Synthesis Ltd was declared the winner of the bidding process following an electronic auction and the subsequent signing of a sale and purchase agreement with the Regional Office of the State Property Fund of Ukraine. The privatization unit included real estate, equipment, trademarks, and other assets of the institute. A key stage in closing the deal and transferring title to the assets was ensuring the transaction’s compliance with laws on protection of economic competition. Ilyashev & Partners’ Antitrust and Competition Practice team performed a detailed analysis of the financial thresholds of the concentration participants and handled the preparation of the application to the Antimonopoly Committee of Ukraine (AMCU). Based on the review of the case, the AMCU issued the preliminary conclusions confirming that the acquisition of SE Ukrniispetsstal’s assets does not require a merger clearance. AMCU’s conclusions allowed the parties to sign the transfer and acceptance act and finalize the transfer of ownership rights. The project was led by Oleksandr Fefelov, Partner, Head of Antitrust and Competition Practice at Ilyashev & Partners, together with Alina Borovets, Attorney.  

Yana Trynova, Attorney at Law, Dr. iur., Professor, Ilyashev & Partners Law Firm The full-scale war has fundamentally reshaped the role of Ukraine’s defence industry. Once a closed and predominantly state-controlled sector, it has evolved into one of the most dynamic areas of the economy, actively attracting private businesses and foreign investment. Today, the defence industry is no longer just about weapons production. It is about technology, international cooperation, innovation, and rapid business scaling. However, alongside these opportunities comes a new reality: operating in this sector means constantly balancing growth with heightened legal risks. State Defence Contracts in Ukraine: Legal Risks, Liability and Compliance Challenges For most companies in the defence sector, cooperation with the state is essential. Yet this is also where a significant portion of legal challenges arises. Government defence contracts involve strict deadlines, complex pricing mechanisms, and heightened scrutiny from regulatory and law enforcement authorities. In practice, even minor technical deviations or delays can result in penalties, disputes, or inspections. For example, if a UAV component is manufactured using a material different from that specified in technical requirements, or if there are tolerance deviations, certification inconsistencies, or insufficient testing, the manufacturer may face non-compliance reports, contractual penalties, or rejection of the product. Similarly, producing a component for weapons or ammunition using improper materials may lead to severe consequences during use (e.g. premature or failed detonation). For the manufacturer or supplier, this may result in production suspension, inspections, product recalls, financial losses, and in some cases criminal liability. To mitigate such risks, businesses must strictly follow regulations, comply with contractual obligations, and invest in qualified internal control functions, including legal and compliance specialists. Export Control, Sanctions and International Cooperation: Legal Risks for Defence Businesses in Ukraine Another major block of risks relates to foreign economic activity. Companies dealing with military or dual-use goods must comply with export control requirements, obtain appropriate permits and licences, observe sanctions regimes, and follow regulations of partner countries. Any mistake in these processes may cost not only a contract but also the company’s reputation. For instance, exporting UAV electronics as civilian goods when they qualify as military products may lead to fines, licence revocation, or even criminal liability. Additionally, some joint activity agreements concluded before 2014 may still formally remain in force. However, cooperation with entities from an aggressor state now constitutes a criminal offence punishable by up to 12 years of imprisonment and asset confiscation. Entering the European market also requires compliance with intellectual property rules. Any engineering innovation must be properly protected (copyright, patents), and authorised for use. Failure to do so may result in contract invalidation and liability for damages. Reselling goods to third countries without the original supplier’s consent may trigger sanctions, contract termination, and criminal liability, particularly if such goods end up in restricted jurisdictions. The use of dual-use goods is especially sensitive. Incorrect classification or lack of proper licensing may lead to asset seizure, criminal proceedings, searches, and reputational damage. These examples highlight the critical importance of qualified legal support capable of preventing such risks. Criminal Liability and Investigations in Ukraine’s Defence Sector: Key Risks for Businesses The defence sector is under constant scrutiny by law enforcement authorities. In recent years, there has been a significant increase in criminal proceedings related to procurement, supply chains, product quality, regulatory compliance, and alleged cooperation with the aggressor state. Given the complexity of legislation and the speed of regulatory changes, risks may arise even without intent, due to negligence. Typical offences in this sector include abuse of power, forgery, official negligence, and violations of export control regulations. In more severe cases, charges may extend to tax evasion, obstruction of the Armed Forces’ activities, or even high treason. In essence, operating in the defence sector is like walking a tightrope: without proper legal support, the risks can be extreme. Individuals may face long-term imprisonment and asset confiscation, while companies risk liquidation. Investing in Ukraine’s Defence Industry: Legal Barriers, Risks and Due Diligence Requirements Despite the risks, Ukraine’s defence sector remains one of the most promising for investors. Its strengths include a strong engineering base, production capabilities, integration with international partners, and growing demand for defence technologies. However, this market requires a deep understanding of local specifics. Without it, even strong investors may face critical barriers. Current investment trends include funding repair centres for armoured vehicles, ammunition production facilities, defence startups (drones, AI, cybersecurity), and infrastructure projects. All these formats require robust legal support, including export control compliance, sanctions screening, beneficiary checks, and thorough due diligence. Legal Risk Management in Ukraine’s Defence Sector: What Actually Works in Practice Our experience shows that in the defence sector, success belongs to those who prevent problems rather than react to them. An effective legal support model includes: – comprehensive compliance systems; – proper structuring of relationships with government authorities; – control over foreign economic operations; – management of criminal law risks; – legal support for personnel and internal security. In practice, the legal function becomes an integral part of business strategy and corporate governance. Each strategy must be tailored to the specific needs of the defence enterprise. Where strong and trust-based cooperation exists between a business and its legal advisors, many of these risks can be effectively minimised. Ukraine’s defence industry today combines high potential with high risk. For businesses, the key takeaway is simple: success depends not only on technology or financing, but on the ability to operate effectively within a complex legal environment. This capability is becoming a critical competitive advantage. Ilyashev & Partners is a leading Ukrainian law firm acting as criminal defence lawyers in Ukraine, with a recognised focus on white-collar crime, defence industry legal risks, and regulatory investigations in Ukraine. We represent defence companies, manufacturers, and executives operating in Ukraine’s defence sector, including businesses involved in military production, dual-use goods, and export-controlled technologies in Ukraine. Our team provides end-to-end legal protection against criminal risks and criminal liability in Ukraine arising in the defence sector, including allegations related to abuse of office, fraud, forgery, export control violations, sanctions breaches, and cooperation with restricted jurisdictions. We represent clients in criminal investigations in Ukraine, including dawn raids, interrogations, asset seizures, and court proceedings before Ukrainian law enforcement authorities and courts, ensuring immediate response and strategic defence. We have extensive experience supporting companies involved in defence contracts with the state in Ukraine, military supply chains, and international defence cooperation, helping them navigate compliance with Ukrainian criminal law and regulatory requirements in Ukraine, including export control regulations, sanctions regimes, and defence procurement rules. Our lawyers work closely with businesses to prevent criminal exposure in Ukraine, conduct internal investigations, compliance audits, and risk assessments, and prepare clients for interactions with law enforcement authorities in Ukraine. We advise companies and investors on how to operate safely in Ukraine’s defence industry, minimising exposure to criminal liability and regulatory enforcement. In addition to criminal defence, we handle cross-border disputes involving Ukraine, sanctions-related matters, and protection of assets affected by wartime risks, including damage documentation, recovery strategies, and coordination with international compensation mechanisms. With decades of experience in high-stakes disputes and criminal defence in Ukraine, Ilyashev & Partners is a trusted legal advisor for companies and investors seeking protection against criminal liability, regulatory risks, and enforcement actions in Ukraine and Ukraine’s defence and security sector. To learn more, please visit the Ilyashev & Partners Law Firm website or contact Yana Trynova directly.

Oleksandr Fefelov, Partner, Head of Antitrust and Competition Practice at Ilyashev & Partners Alina Borovets, Attorney at Ilyashev & Partners  Ukraine's legal environment for foreign investment is characterized by two distinct features. As a whole, Ukrainian legislation maintains a broad openness to foreign capital, protects investor rights, and offers basic mechanisms for the establishment of or acquisition of corporate presences in the country. In contrast, a real investment decision in Ukraine today cannot be based solely on the provisions of the investment framework laws. It requires much more than a broader analysis – taking into account foreign exchange regulations, tax burden, banking compliance, sanctions profile, and the potential introduction of a foreign direct investment screening regime. Foreign investment's practical architecture has been transformed by martial law from 2022 to 2026. The key issues before the full-scale war were corporate structuring, tax optimization, and investment protection, but now the key concern is assessing whether a given investment is realistic from the standpoint of currency restrictions, banking controls, and regulatory predictability. Therefore, foreign investors considering entry into the Ukrainian market should evaluate the legal environment not just in formal terms but also from the perspective of the model they are considering. Forms and Objects of Foreign Investment The legal regime governing foreign investment in Ukraine rests primarily upon the Law of Ukraine "On Investment Activity" and the Law of Ukraine "On the Regime of Foreign Investment." These instruments establish the fundamental principles of investor protection, define the general guarantees of investment activities, and define the legal status of foreign investments in Ukraine. Pursuant to Article 2 of the Law of Ukraine "On the Regime of Foreign Investment," foreign investments in Ukraine may be made in the following forms: A foreign currency recognized by the Ukrainian National Bank as convertible; Ukraine's currency, if reinvested into the original investment object or into any other object in compliance with applicable law; Any property, movable or immovable, and its related rights; Securities, including shares, bonds, and corporate rights; Claims for payment and rights to claim performance of contractual obligations guaranteed by prime-rated banks; Intellectual property rights whose value is confirmed based on legislation of the investor's country or international trade customs; Generally, rights granted by law or contract for conducting business, including the use of subsoil and the exploitation of natural resources. If the foreign investor's share of the authorized capital is not less than 10%, the enterprise acquires the status of an enterprise with foreign investment as of the date the foreign investment is recorded on the balance sheet. Ilyashev & Partners' experience shows that the pre-entry stage is crucial to identifying the most efficient investment form. In practice, foreign investors in Ukraine most commonly use one of three basic market entry models: (1) Greenfield investment: The establishment of a new Ukrainian legal entity for independently launching operations. This approach is traditionally used where the investor seeks full control over business processes, corporate governance, and compliance architecture from the first day of its presence in the country. (2) M&A transactions: The acquisition of a stake in an existing business. This route allows for faster market entry, but simultaneously requires significantly more extensive legal due diligence, as the investor assumes the risks associated with the target company’s prior activity – corporate, tax, contractual, labor, regulatory, and sanctions-related. (3) Asset-based and contractual structures: Investment through the acquisition of individual assets or the use of contractual structures without the classical acquisition of corporate rights. This approach may be appropriate for projects involving real estate, infrastructure, leasing, concession arrangements, production facilities, or separate technological complexes. As privatization processes for state and municipal property intensify, significant assets can be acquired at extremely attractive prices at investment auctions. Currently, this sector represents a strategic entry point for investors looking toward the post-war recovery phase. Among corporate forms, the private limited liability company (LLC) is the most commonly used by foreign investors. For structuring a foreign capital presence in Ukraine, LLC is the most versatile and functionally appropriate form. By combining charter-based governance with contractual instruments, it enables the construction of a manageable corporate model, the entrenchment of internal arrangements among participants, and a flexible approach to entry, exit, corporate control, and ownership changes. Due Diligence as a Critical Condition for Safe Entry Legal due diligence is a critical stage of the investment process, regardless of the entry model chosen. Due diligence in Ukrainian conditions goes beyond simply identifying risks – it also determines the architecture of the future transaction, as we see at Ilyashev & Partners, from the scope of representations and warranties to the list of conditions precedent to indemnification mechanisms, escrow mechanisms, and retention of the purchase price. Several blocks need particular attention: Corporate status: the ownership of interests and the authority of control bodies; history of changes; encumbrances; and corporate disputes. Beneficial ownership: Structure and the AML profile of the business (UBO disclosure is now a cornerstone of Ukrainian compliance). Taxation: The tax block, which in Ukraine is frequently a source of significant post-closing risks. Currency flows: Whether the prospective payment model for non-residents will be permitted under NBU rules. Sanctions component: Due to the dynamic nature of sanctions lists in the region, sanctions are no longer optional, but a mandatory aspect of any due diligence review. In the current economic climate, quality due diligence should encompass not only the legal cleanliness of the asset, but also the overall feasibility of the transaction. Investors need to ensure not only that they understand what they are acquiring, but also that their investment can operate normally thereafter - opening accounts, obtaining financing, processing payments, engaging with counterparties, and not being blocked for compliance reasons. The Tax Environment: The Importance of Correct Classification of Payments The Tax Code of Ukraine establishes the basic framework for the taxation of foreign investments. Among the most material aspects for investors are corporate income tax, value-added tax, taxes on non-resident income, and international double tax treaties. International tax treaties, however, do not guarantee a safe structure in transactional practice. What is decisive is the correct combination of the legal characterization of a payment, its tax classification, documentary substantiation, and currency law permissibility. Incorrect classification often leads to complications with the tax authorities and difficulty in repatriating funds. Particular attention should be paid to dividends, interest, royalties, and intragroup fees. During the structuring stage, foreign investors need to understand how specific cross-border cash flows will be required following market entry, as well as whether they comply with both applicable tax rules and foreign currency regulations as well as banking compliance requirements. The taxation of income from foreign investments is governed by the Tax Code of Ukraine. Key parameters relevant to foreign investors include the following: Dividends: Dividends paid to non-residents are taxed at 15% (general rate) or at reduced rates under applicable conventions to avoid double taxation (DTTs). Ukraine is a party to over 70 such conventions. Royalties: Subject to 15% withholding tax (or reduced DTT rates). Customs duties: Property imported by foreign investors for at least three years for investment purposes under registered agreements is exempt from customs duties. Corporate Income Tax: Profits are subject to the standard rate of 18%. Foreign Exchange Regulation as a Central Element of Investment Planning Prior to 2022, currency law was often regarded as a technical aspect of a transaction, but now it's one of the most important considerations for investment planning. The Law of Ukraine "On Foreign Currency and Foreign Currency Transactions" and the numerous amendments to Resolution No. 18 of the Board of the National Bank of Ukraine "On the Operation of the Banking System During the Period of Martial Law" effectively constitute a separate regulatory oversight framework that directly affects capital flows, debt servicing, profit repatriation, and intra-group settlements. At Ilyashev & Partners, we advise that a legally correct and tax-compliant payment is not always feasible in operational terms. The key considerations are whether the relevant transaction falls within the list of permitted foreign currency transactions, whether it satisfies the applicable criteria, and whether the servicing bank is prepared to process it from a foreign currency control perspective. In this context, foreign currency exchange regulation functions as a filter for the investment model as a whole. It determines the practical feasibility of the investor’s ability to repatriate invested capital, service external financing, pay dividends, or make other cross-border transfers. It is for this reason that planning an investment in Ukraine today is impossible without a detailed currency law analysis. One of the most sensitive issues for a foreign investor remains income repatriation. In recent years, the National Bank of Ukraine has been gradually easing currency restrictions; however, such liberalization has been targeted and measured in character. Ongoing monitoring of NBU policy is essential for any medium-to-long-term investment strategy. Protection of Investor Rights: Contractual Architecture, Arbitration, and International Mechanisms Despite its complex regulatory environment, Ukraine maintains basic legal mechanisms for investor protection on both a domestic and international scale. While domestic law formally protects foreign investments, bilateral investment treaties and arbitration mechanisms supplement the international law dimension. Practical experience demonstrates that the most effective protection begins at the transaction structuring stage. Contractual architecture is of utmost importance: Properly formulated warranties and indemnities. Clearly defined conditions precedent and risk allocation methods. Sanctions clauses and the right to withdraw in the event of regulatory changes. A carefully considered dispute resolution model. International commercial arbitration remains the most predictable and professional dispute resolution method for cross-border contracts. At the same time, it is advisable for a foreign investor, already at the market entry stage, to assess whether its home state has a bilateral investment treaty in force with Ukraine and what standards of protection such a treaty provides. The possibility of a foreign investor bringing a claim against a host state in investment arbitration is a certain guarantee for the investor in the case of a violation of rights. Recourse to international investment arbitration, such as, for instance, the International Centre for Settlement of Investment Disputes (ICSID), is also an effective tool for resolving disputes between an investor and a host state (Ukraine). For concentrated or concerted actions, certain investment transactions may require the approval of the Antimonopoly Committee of Ukraine. Draft Law No. 14062 on the Screening of Foreign Direct Investments Draft Law No. 14062 On Screening of Foreign Direct Investments, which provides for the introduction of a foreign direct investment screening regime in Ukraine, should receive special attention in 2026. Despite the fact that this draft law has not yet been adopted, its advancement reflects a clear governmental trend as of April 2026: Ukraine is gradually moving away from the general openness model toward a differentiated approach based on national security concerns. Investing primarily focuses on: Critical infrastructure. Strategic subsoil resources. Defense and dual-use sectors. For investors, this means that in the medium term, the standard M&A process in Ukraine may be supplemented by an additional mandatory layer of approvals. Should the law be adopted in a form close to the current concept, a separate condition precedent linked to the completion of investment screening will need to be incorporated into sensitive-sector transactions, along with the preparation of an expanded information package regarding the control structure, sources of financing, and the nature of the asset. Non-compliance with the anticipated screening regime may have significant consequences – ranging from corporate restrictions and invalidations of transactions to substantial financial sanctions. Therefore, even in the absence of enacted legislation, investors should adopt a screening-ready approach already at this point, especially in transactions involving sensitive assets. Conclusion The legal framework for foreign investment in Ukraine is in the process of active evolution, driven by two parallel processes: gradual integration with the EU and adjusting legislation to match the conditions of martial law. Existing legislation provides a sufficient set of protections for foreign investors, from expropriation protection to capital repatriation rights. The wartime currency regime, however, temporarily restricts these guarantees in practice. The key to successful market entry lies in a thorough understanding of this evolving legal environment. Engaging a competent legal adviser with deep jurisdiction-specific experience allows investors to navigate these complexities effectively. Ukraine remains an attractive market for human capital, resource potential, and future reconstruction opportunities. Ilyashev & Partners is one of the leading full-service law firms in Ukraine, with 30 years of experience advising international investors, multinational corporations, and domestic businesses across a wide range of industries. With offices in Kyiv, Kharkiv, and Odesa, the firm provides comprehensive legal support in key practice areas such as dispute resolution, international arbitration, antitrust and competition, corporate and M&A, tax, white-collar crime, and cross-border transactions. The team has extensive experience in complex, high-stakes matters, including investment structuring, regulatory compliance, sanctions, and multi-jurisdictional disputes. To learn more, please visit the Ilyashev & Partners Law Firm website or contact Oleksandr Fefelov directly.

Sayenko Kharenko’s international trade practice secured the initiation of an anti-dumping investigation against imports into Ukraine of non-galvanised welded steel pipes originating in the Republic of Türkiye, acting on behalf of a group of Ukrainian producers. The applicants in the case include PJSC Ilyich Iron And Steel Works Of Mariupol, LLC DMZ Kominmet, PJSC Trubostal Pipe Plant, LLC Metinvest-SMC and PJSC Zaporizhstal. The Interdepartmental Commission on International Trade issued its decision to open the investigation on 26 January 2026. The firm’s lawyers advised the applicants on the use of trade defence instruments, prepared the complaint and supported its submission to the Ministry of Economy of Ukraine. According to the complaint, import volumes of Turkish welded steel pipes increased by more than 400% during the investigation period, while prices remained consistently below the production costs of comparable Ukrainian-made goods. In the applicants’ assessment, this trend led to a deterioration in key industry indicators, including declining output, falling domestic sales, and reduced capacity utilisation. Sayenko Kharenko’s team included senior associate Oleksandra Sandul, junior associate Maksym Mykytiuk, and partner Anzhela Makhinova. https://sk.ua/sayenko-kharenko-secures-initiation-of-anti-dumping-investigation-into-steel-pipe-imports-from-turkey/