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Despite the full-scale war, recent years have seen a growing number of foreign citizens arriving in Ukraine for various purposes: from participating in volunteer, humanitarian, and educational projects to starting businesses and building partnerships with Ukrainian entrepreneurs. Their presence holds significant value from a humanitarian and economic perspective, as it fosters international support, attracts investment, and facilitates the exchange of valuable expertise. At the same time, despite the imposition of martial law, Ukraine’s migration legislation has not undergone significant changes. As a result, the rules governing the duration of stay and other migration-related matters remain standard legal issues that shall be addressed by those concerned. Foreign citizens entering Ukraine without a visa are generally permitted to stay for no more than 90 days within any 180-day period, unless otherwise stipulated by international treaties. For citizens of countries subject to a visa regime, the permitted duration of stay is determined by the conditions of the issued visa, which typically also allows for a stay of up to 90 days. After the permitted stay expires, foreign citizens shall leave the territory of Ukraine. Failure to comply may result in administrative liability in the form of a fine. However, the most severe consequence may be a ban on re-entry into Ukraine. A temporary residence permit is one of the main legal mechanisms for foreign citizens to remain in Ukraine. It allows them to stay legally in the country for at least one year, with the possibility of extension, and to travel freely in and out of Ukraine without obtaining a visa each time, which is a significant convenience. The law provides a relatively broad list of grounds for a foreign citizen to obtain a temporary residence permit in Ukraine. These include official employment, participation in volunteer activities, involvement in cultural, scientific, educational, or sports activities, employment in a representative office of a foreign company, participation in the activities of branches of foreign non-governmental organisations, and more. Employment is among the most common grounds for obtaining a temporary residence permit. To employ a foreign citizen officially, the employer shall obtain a permit to use foreign labour, issued by the relevant regional employment centre. This permit is a mandatory prerequisite for obtaining a long-term D-04 visa, allowing the applicant to submit documents for a temporary residence permit in Ukraine. The D-04 visa is issued by Ukrainian consular offices abroad, typically for 90 days. The visa fee is USD 65, but the amount may vary depending on the applicant’s citizenship and the applicable bilateral agreements. For instance, U.S. citizens are charged a visa fee of USD 182 based on reciprocity. Therefore, foreign citizens are advised to check current consular fees in advance to avoid unexpected expenses. It is important to remember that once a temporary residence permit is issued, foreign citizens shall register their place of residence at their address within 30 calendar days. Failure to fulfil this obligation is common in practice, particularly among individuals staying in Ukraine for short-term professional or humanitarian purposes. However, missing the registration deadline may result in an administrative fine and, in some cases, may even prevent the permit extension. It is worth noting that under martial law in Ukraine, the validity of temporary residence permits that expired after the introduction of martial law is automatically extended for the duration of martial law and 30 days after its termination or repeal. Nonetheless, even though such permits are automatically extended, we recommend renewing them on time, especially if the foreign citizen plans to travel abroad, submit documents to banks, or obtain permits and enter into contracts. At the same time, in response to legislative initiatives introduced by certain EU member states to regulate the legal status of Ukrainian citizens, Ukraine has implemented reciprocal mechanisms for simplified legalization. The most notable example is the Republic of Poland: under the Law of Ukraine No. 2471-IX dated 28 July 2022, Polish citizens are granted the right to reside in Ukraine for up to 18 months, with the possibility of extension. They may be employed without obtaining a work permit, register legal entities or operate as individual entrepreneurs, and access public healthcare, education, and other social services on terms comparable to those available to Ukrainian nationals. In this way, the Ukrainian legislator has established a special legal regime that significantly facilitates the integration of Polish citizens. In conclusion, Ukrainian legislation enables foreign citizens to live and work legally based on a temporary residence permit. The process is relatively quick and non-bureaucratic if the application package is prepared correctly. This is particularly important for attracting foreign managers and specialists who can effectively integrate into the Ukrainian business environment, contribute to economic development, and expand international cooperation. At the same time, it creates favourable conditions for foreign businesses to enter the Ukrainian market through the direct presence of their representatives, which is especially relevant in Ukraine’s post-war reconstruction. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law; Oles Riabchuk, Senior Associate of Corporate and M&A practice at GOLAW, Attorney at law; Oleksandr Shevchuk, Junior Associate of Corporate and M&A practice at GOLAW.

Corporate PPAs (Power Purchase Agreements) are gaining popularity not only worldwide, but also in Ukraine. These are direct contracts under which electricity from renewable sources is sold not to the government, as was the case under the “green” tariff, but directly to private companies – end consumers. EU countries and the US have been moving away from government subsidies for renewable energy in favor of market mechanisms for a while now. According to BloombergNEF, 183 corporate PPAs were signed in the US in 2024 alone – nearly twice as many as the previous year. For Ukraine, this model is especially relevant given that the “green” tariff is only valid until 2030 and no longer applies to new industrial facilities (except in a few cases explicitly set out by law). It’s also becoming more attractive due to the ongoing financial instability in the energy sector. Benefits of PPAs in the Ukrainian Context Corporate PPAs primarily provide predictability and stability. These contracts are typically signed for 10 to 20 years and lock in the electricity price, helping businesses avoid market fluctuations. Beyond price stability, long-term PPAs also ensure a reliable power supply – a crucial factor given Ukraine’s recent energy challenges, especially after years of widespread blackouts. PPAs also serve as confirmation of a project’s financial viability, which is key for banks and investors when deciding on funding. For businesses committed to sustainability, PPAs help reduce CO₂ emissions, improve ESG ratings, and enhance corporate reputation. On top of that, they open the door to instruments like guarantees of origin and carbon credits – and that’s just the beginning. Regulatory framework: is it already working? Law No. 3220-IX has enabled renewable energy producers to enter into bilateral agreements without mandatory auctions. Regulatory restrictions on the term of such agreements have also been lifted, allowing long-term contracts to be signed even at the project development stage. Producers can leave the Guaranteed Buyer balancing group and operate on the open market, while retaining the right to return to the state model. Therefore, the legal landscape is already in place – all that remains is to use it effectively. ESG, guarantees of origin, carbon credits – how does this relate to PPAs? Guarantees of origin are electronic documents that officially confirm electricity was generated from renewable sources. This mechanism is already in place in Ukraine and is essential for access to EU markets. ESG principles refer to a business’s responsibility in environmental, social and governance matters. Investors and partners are increasingly demanding compliance with these standards – and purchasing electricity from renewable energy sources through PPAs is a concrete way to confirm your environmental friendliness. Carbon credits or emissions trading system – a system in which companies receive CO₂ emission limits: surpluses can be sold, shortages can be purchased. From 2025, Ukraine will reinstate the obligation to report emissions, and the launch of the emissions trading system itself is expected in 2028. Accordingly, entering into PPAs with renewable energy producers allows businesses to meet ESG requirements, obtain guarantees of origin, and prepare for new climate regulatory requirements. Practical aspects of concluding a PPA After considering the general principles of corporate PPAs, it is worth moving on to the the practicalities of putting them into action. First of all, this concerns the terms and conditions of the sale and purchase of electricity, which must be clearly regulated in the contract. If the electricity seller operates under the PPA model, it is important to stipulate in the contract the buyer's obligation to purchase the entire volume of electricity produced, except for that consumed for the station's own needs. The actual conclusion of the contract for a specific trading day is confirmed by the synchronous submission of identical daily volumes of electricity through the electronic platform of the transmission system operator – NPC Ukrenergo. In this regard, the contract must provide for an agreed procedure for coordinating the daily supply schedule, specifying the deadlines, responsible persons and methods of communication. Equally important is defining the moment when ownership of the electricity is transferred. In Ukrainian practice, this usually happens when the transmission system operator confirms the registration of the contract. From this moment, all risks associated with the ownership, use and disposal of electricity, as well as responsibility for compliance with market rules, are transferred to the buyer. Pricing within the PPA is one of the most sensitive issues. Usually, a model based on the day-ahead market is used, with simultaneous determination of price limits – minimum and maximum. This allows maintaining a balance between protecting the interests of the parties and flexibility in market conditions. The contract should also clearly outline the timing and procedure for payments, in line with tax law requirements. Given the long-term nature of PPAs, it is worth providing for the seller's right to temporarily suspend electricity supply in the event of a breach of payment discipline, failures in volume registration or default by the buyer. The conditions for such suspension must be clearly spelled out and agreed upon by the parties in advance. The contract separately regulates both planned and emergency maintenance – including notification procedures, shutdown schedules, and deadlines for resolving technical issues. This helps avoid disputes and interruptions at the energy facility. The parties must hold all licenses, agreements, and technical documents required under the Electricity Market Rules. It is also necessary to provide for the seller's right to suspend electricity supply in the event of disruptions in the transmission or distribution system, including during maintenance, without applying sanctions. Particular attention should be paid to regulating liability for imbalances – the financial consequences of deviations between the forecast and actual volume of electricity supply. Moreover, the issue of regulating imbalances is an essential condition of the contract. There are also specific points to consider around the contract duration. It all depends on the stage of project implementation. While the agreement is formally in force from the date of signing, actual electricity delivery usually begins only once the facility has been commissioned for commercial operation – that is, once all technical conditions have been met and supply can physically take place. Altogether, these provisions form the backbone of a well-functioning and predictable corporate PPA. Challenges and solutions Despite its benefits, the PPA market in Ukraine still faces a number of challenges. The biggest issue is the lack of a guaranteed long-term buyer (offtaker) willing to purchase large volumes of electricity. Green auctions have not been implemented at scale, and the private PPA market is developing slowly due to a shortage of creditworthy buyers. In particular, green auctions with state support do not enjoy investor confidence, due to both procedural imperfections and the risk of non-fulfilment of obligations on the part of the state. The current “contract for difference” model used in green auctions is unattractive to investors, as auction prices are often lower than market prices. The “contract for difference” mechanism provides that the state guarantees a fixed price to the producer, compensating for the difference in the event of a market decline. A transition to a “market premium” model is being discussed, where the producer sells the electricity itself and the state only pays extra when prices are low. Let us turn our attention to quotas. Investors working in Ukraine have much larger construction projects than the quotas currently offered in auctions. This significantly reduces the possibility for large projects to win. Conclusion Corporate PPAs are not just a trend, but a real tool for transitioning to a sustainable, competitive and energy-independent economy. They open up new opportunities for both energy producers and consumers, allowing them to combine economic efficiency with social and environmental responsibility. A well-structured agreement, supported by professional guidance, is the key to making the most of this instrument in the Ukrainian context. Authors: Oleksandr Melnyk, Partner at GOLAW, Head of Corporate Law and M&A practice, Attorney at law; Khrystyna Zimenko, Associate at Corporate Law and M&A practice at GOLAW; Vladyslava Zaichko, Paralegal at Corporate Law and M&A practice at GOLAW.

On 5 August 2025, the National Bank of Ukraine adopted resolution No. 95, which significantly amends the rules on foreign exchange operations for corporate clients and foreign investors. Key changes in foreign exchange regulation Resolution of the NBU board No. 95 of 5 August 2025 marks another step is easing the wartime foreign exchange restrictions introduced by resolution No. 18 of 24 February 2022. The new rules are aimed at stimulating investment and increasing the foreign exchange flexibility of Ukrainian businesses, while maintaining the necessary control mechanisms. Dividend repatriation One of the most important innovations concerns the payment of dividends abroad. Residents will now be able to partially repatriate dividends for the period of activity starting from 1 January 2023. The monthly limit of EUR 1 million remains unchanged. According to the NBU, the current overall limit prevents a significant increase in demand for foreign currency, while allowing dividend repatriation will strengthen foreign investors’ confidence and stimulate the inflow of new capital into Ukraine. Funds transferred abroad in the form of dividends may also be used for other purposes, including repayment of debt obligations. New risk management instruments Resolution No. 95 considerably expands the possibilities for forward transactions. First, clients are now entitled to sell foreign currency to banks for hryvnia on forward terms without the need for physical delivery of the underlying asset. Second, residents are permitted to purchase foreign currency from a bank on a forward basis for the purpose of hedging exchange rate risks in import transactions. At the same time, restrictions have been set for banks: they may not increase their net long foreign currency position, so such forward transactions are possible only within the amount of currency the bank has itself purchased on a forward basis from its clients. These innovations provide corporate clients with more tools to manage currency risks but also require the establishment of internal accounting and control for forward contracts. Simplification of international settlements Following the amendments, residents and non-residents may return erroneously credited foreign currency funds within three working days of the bank receiving the relevant notice. This increases the confidence of foreign partners, as their funds will not be blocked without the possibility of return. The establishment of a three-day period for returning erroneously credited foreign currency significantly improves the predictability of foreign exchange operations and reduces reputational risks for banks. This change sends an important signal to foreign partners about the normalisation of foreign exchange regulation and alleviates concerns about the “freezing” of assets in the event of technical errors. Greater flexibility in servicing external credits The approach to servicing external borrowings has been substantially revised. Now, under loans from a pool of foreign creditors, enterprises may repay debt not only in favour of IFIs but also to other participants, namely first-tier banks with a rating of at least “A”. This change creates greater flexibility for Ukrainian enterprises in structuring external debt and may contribute to diversifying funding sources, potentially reducing the cost of borrowing through competition, and simplifying debt repayment procedures. At the same time, the imposition of strict rating requirements may limit the range of available banks, especially under martial law, when bank ratings may be downgraded due to war-related risks. Conclusions NBU resolution No. 95 is an important step in the liberalisation of foreign currency regulation, providing businesses with more management. The innovations are particularly beneficial for companies with foreign investors and those actively operating in international markets. However, successful use of the new opportunities requires careful planning, compliance with documentation requirements, and regular monitoring of regulatory changes. Companies should promptly adapt their internal processes to fully benefit from the liberalisation of foreign currency restrictions. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law; Oles Riabchuk, Senior Associate at Corporate Law and M&A practice at GOLAW, Attorney at law; Yaroslav Maltsev, Paralegal at Corporate Law and M&A practice at GOLAW.

Lie detector in domestic legal realities What do a lie detector and criminal procedure in Ukraine have in common? While pop culture and American television series often portray the polygraph, or so-called "lie detector," as an indisputable tool for exposing lies, in reality, its use in Ukrainian criminal procedure remains a little-noticed and controversial topic. Although the current Criminal Procedure Code of Ukraine does not explicitly permit the use of a polygraph, it also does not explicitly prohibit it. Such regulatory uncertainty has led to a situation where polygraphs are actively used in internal personnel procedures of law enforcement agencies, but their evidentiary value in criminal proceedings remains limited. Recent years have seen the approval of guidelines on the use of polygraphs in the structures of the Ministry of Internal Affairs, the Ministry of Defence, the Security Service of Ukraine, the National Guard, and prosecutor's offices, among others. In particular, according to the Ministry of Internal Affairs' Order No. 920 of November 13, 2017, a polygraph is defined as a specialised psychophysiological device that registers at least five indicators of physiological response to psychological stimuli without harming the person. Is a polygraph, as a means of proof, an innovation or "inappropriate creativity"? The use of a polygraph at the stage of pre-trial investigation, particularly during interrogation, is a manifestation of the introduction of innovative technologies not only in the forensic component of modern science but also in procedural law. However, the effectiveness of such use largely depends on the professionalism of the polygraph examiner and the correctness of the interpretation of the results. After all, physiological indicators themselves are only indicative, not absolute, data, meaning that the information obtained during the test is probabilistic and indicative, and does not establish facts with legal certainty. To lend the study's results evidentiary value, a polygraph must be used as part of a forensic psychophysiological examination, based on a relevant resolution by the investigator, prosecutor, or a ruling by the investigating judge or court, depending on the stage of the proceedings. The expert's opinion based on the results of such an examination is a procedural source of evidence. Technical component of the process Today, the standard for equipment is DSTU 8692:2016. The only polygraph that meets this standard is the RUBICON model, which is actively used by the Kyiv Scientific Research Institute of Forensic Expertise, the State Bureau of Investigation, the National Police, and other organisations. A professional polygraph examination consists of three main stages: a pre-test interview, the examination itself, which involves registering indicators, and the analytical processing of polygraph results based on the examination's findings. Modern devices record heart rate, blood pressure, respiration, skin conductivity, and other vital parameters in real-time. Based on a comparison of responses to control and relevant questions, the polygraph examiner concludes the truthfulness of the answers. Unfortunately, polygraph results depend on the subjective interpretation of the polygraph examiner, which reduces their objectivity. Stress susceptibility, physiological characteristics, or chronic illnesses can distort the results, even if the person is being truthful. This creates a significant risk of drawing false conclusions that may impact the course of the pre-trial investigation. It is essential to adhere to the principle of voluntariness. According to Article 28 of the Constitution of Ukraine, no person may be subjected to research without his or her written consent. A polygraph examination cannot be equated with an investigative action, such as interrogation, so any arguments by law enforcement officers regarding the mandatory nature of the examination should be viewed critically. That is why the presence of a lawyer during the interrogation of a person, even if they are a witness, can help avoid such manipulations by the pre-trial investigation body. What does the court practice say about this? Court practice shows a "cautious" attitude towards the polygraph. For instance, some court decisions demonstrate a gradual recognition of the significance of polygraph examination results. In case No. 301/943/19, the Irshava District Court of Zakarpattia Region recognised the conclusion of a forensic psychological examination with a polygraph as a valid source of evidence. However, in case No. 676/7835/19, the Khmelnytsky Court of Appeal emphasised the absence of direct authorisation for the use of a polygraph in criminal proceedings and rejected its results as evidence. In its decision, the Appeals Chamber of the High Anti-Corruption Court in case No. 757/13635/17-k stated that "polygraph indicators are only probable and indicative." A similar position can be seen in the rulings of the Supreme Court, particularly in cases No. 621/1308/18 and No. 234/4850/17. In other words, a polygraph can only be used as an auxiliary tool to supplement other evidence. Its results have limited evidentiary value, as the opposing party can always appeal to the hypothetical nature of the conclusions of such a study. International experience of using a "lie detector" International practice is also ambiguous. In more than 70 countries, polygraphs are used as an auxiliary tool, but the United States is the leader. There, its use is regulated at both the federal and state levels, for example, under California Law No. 351.1 of 1983. In some states, the polygraph is explicitly provided for in the procedural law in the investigation of various "sensitive" categories of criminal offences, such as sex crimes. However, even though polygraphs are more widely used at the state level, their results are often not recognised as evidence in court, but are used solely for preliminary truthfulness assessments. Conclusions Thus, although the use of a polygraph appears quite impressive and innovative on screens, it cannot be considered a sufficiently effective procedural tool in criminal proceedings under the current CPC of Ukraine. Its legal uncertainty and the probabilistic nature of the results make it impossible to use them as evidence. Authors: Kristina Kolchynska, Counsel at Criminal Law practice at GOLAW, Attorney at Law Marko Kotiv, Paralegal at Criminal Law practice at GOLAW

Funding early-stage companies with the goal of earning profits after their intensive growth phase has always been a popular financial tool – backing both the wealthiest and, paradoxically, the poorest individuals on the planet. What investment mechanisms are used in practice? There are three primary investment mechanisms. Equity Investment The investor acquires corporate rights in the company. This mechanism provides the investor with the highest level of control over the company's operations, as they become a shareholder in the startup and can directly influence decision-making. This form of investment gives the investor significant powers, the strongest level of protection and control, and allows them to strengthen their position through a shareholders' agreement or by incorporating specific rights and guarantees into the startup’s charter. Convertible Loans This tool allows funds to be raised without immediately valuing the company, which is especially useful in conditions of uncertainty. The investor provides a loan that can later be converted into a share in the startup—usually during the next funding round or once a certain valuation is reached. A typical structure includes an interest rate, a discount for share purchase, and a conversion trigger (the amount of investment or company valuation that activates the conversion). For example, an investor provides a convertible loan of $100,000 for one year at 10% annual interest. The agreement provides for a 20% discount on conversion. After one year, a new funding round takes place, valuing the company at $1,000,000. With interest, the debt to be converted is $110,000. With a 20% discount, the effective valuation for this investor is $800,000. Thus, upon conversion: $110,000 ÷ $800,000 = 13.75% ownership in the company. This method avoids difficult early-stage valuation negotiations by deferring them until more certainty and external valuation exists. However, a drawback is the lack of direct investor involvement in the startup, making it harder to influence internal decision-making. SAFE (Simple Agreement for Future Equity) A contract where the investor receives rights to a share in the startup after a future funding round valuation. SAFE is not a debt instrument – it has no repayment terms or interest. Instead, it may include a valuation cap (the investor pays no more than a set value regardless of the startup’s eventual valuation), a discount on share purchase, an MFN clause (Most Favored Nation), which guarantees the investor the best deal terms offered to future investors. SAFE is gaining popularity in Ukraine and is widely used in the U.S. (notably by Y Combinator) as a simpler alternative to convertible loans, especially at the pre-seed and seed stages. Beyond these mechanisms, there are quasi-investment tools and venture debt, but they remain extremely rare in Ukraine and are essentially modified forms of convertible loans. Stock option plans (e.g., for employees) also exist, granting the right to buy shares at a fixed price. However, options are not true investment tools—they are designed to attract human capital and reduce the startup’s burn rate in early stages. Key Risks For Investors Investors face various risks when funding startups, which should be evaluated and mitigated wherever possible. All risks can be grouped into basic and additional. Basic Risks – these are inherent to startup investments and cannot be eliminated due to the nature of early-stage ventures. They include failure to develop the core product or technology, lack of market interest, illiquidity or loss of product liquidity. In short, basic risks are the risk of startup failure. They are unavoidable and explain why early-stage investments offer high potential returns. Once a company has a product and a market share, it's no longer considered a startup. Additional risks are factors that can be eliminated or minimised by the investor through a series of actions or the use of special legal instruments. Additional Risks & How to Avoid Them Equity Dilution Investor shares may be diluted in subsequent funding rounds, either voluntarily, by agreement with the founders to raise more capital, or involuntarily, when founders disregard the investor’s interests. This problem is very common. A similar incident happened to Eduardo Saverin, one of the co-founders of Facebook, whose stake was diluted from 34.4% to 0.03%. In order to avoid such issues anti-dilution clauses (provisions that protect investors from dilution in the event of new rounds of financing) must be included in the investment or corporate agreement. Such provisions may also be included in the charter, depending on the chosen investment structure. Ineffective Management & Misuse of Funds By ineffective management, we refer to either the conscious or unconscious withdrawal of investor funds from the company in ways that do not help the startup become a profitable business capable of generating returns for the investor. Unconscious withdrawal of funds typically happens when investment is misused, often due to a lack of experience, insufficient knowledge, inadequate qualifications of the founders, and the absence of strategic planning. Conscious withdrawal of funds, however, presents a more concerning scenario. Essentially, these are types of startups created with the intention of "burning out" after securing funding. The goal of such ventures is not to execute an idea but to secure financing for its development and then drain the funds by increasing the company's burn rate. This can involve inflating salaries, hiring friends and family for key positions, or engaging contractors for services (such as marketing and consulting) with no standardized pricing. To prevent ineffective management, it is recommended to conduct a thorough legal and financial audit of the startup to assess current expenses and growth plans. The corporate agreement, charter, or investment contract should also include mechanisms that establish clear rules for the use of invested funds and grant investors the ability to block unjustified decisions. Deadlocks Due to Founder Conflicts A frequent issue is the blocking of company activities by one or more founders due to a conflict with an investor or another founder. This can arise from a desire to repurpose the work for another project or from an internal disagreement about the company's strategic direction. To minimize such risks, it is essential to develop a joint business strategy during the investment stage. This plan will help determine if the co-founders and investor share the same goals. Despite the most detailed development strategy, disputes can still arise. To mitigate this risk, corporate documents should include procedures for mediation and arbitration in case of conflicts between founders and/or the investor, exit strategies for the investment, and out-of-court dispute resolution mechanisms. These processes must be swift and effective, as even a brief blockage of decision-making in a startup can lead to its downfall. Loss of Intellectual Property, Technology, Brand, Patents Startups often prioritize developing the founders' idea while bypassing legal procedures and protections due to limited funds and a focus on product development rather than safeguarding it. While this approach is understandable, it introduces additional risks for both the startup and the investor. Failure to protect the company’s key assets, whether it be its brand, technology, patents, or other intellectual property, puts those assets at risk of being lost. The loss of such assets will inevitably result in a significant decrease in the company's value, if not the potential closure of the startup. To prevent such risks, a comprehensive due diligence process should be conducted. This will involve (1) identifying the company’s key assets (such as software code, art objects, technology, etc.); (2) verifying the origin of these assets and reviewing the original documentation regarding their development (contracts, intellectual property transfer agreements, etc.); (3) developing a framework to document work results and implement mechanisms for protecting key assets, followed by registering the relevant rights. Overvaluation or Undefined Valuation at Time of Investment Startup valuations during the pre-seed stage are often based on subjective factors or, in some cases, there is no valuation at all. This creates a risk of investors overpaying for a stake in the company during the early stages of funding. To protect the investor’s interests, a SAFE (Simple Agreement for Future Equity) agreement can be used, which sets a cap on the company's valuation for early investors. This means that regardless of the company's actual valuation, the amount used for calculating the investment offer cannot exceed a predetermined threshold. It’s important to note that while this tool offers protection, it introduces other risks. Since the investor does not acquire equity in the company, they have no direct influence on the company’s decisions. This is why equity investment remains the most popular form of investment around the globe. Insufficient Funding to Reach Profitability or Attract Further Investment A common issue arises when founders create overly optimistic forecasts regarding the resources needed to develop a product or achieve profitability after its launch. Unquestioningly accepting the founders’ projections, as outlined in their pitch deck, can lead to a situation where the investor becomes a hostage of the startup – where the product hasn’t been created yet, but the investment has already been spent. In such situations, trying to reclaim the investment is futile, as the startup no longer has the funds. The investor faces a difficult choice: provide additional funding from their own pocket, or attempt to bring in another investor and hope to recover their initial investment later. While it’s impossible to entirely eliminate this risk, conducting an independent evaluation of the company’s product, calculating the company's burn rate, assessing the product's profitability, and analyzing market conditions, alongside a comprehensive financial and legal audit of the startup, can help minimize this risk. Conclusions A proper approach to conducting due diligence, evaluating a startup’s profitability, and structuring the investment transaction does not guarantee the return of the invested funds, but it significantly reduces the risk of losing the investment. By applying the provided advices and taking a comprehensive approach to investing, most additional risks can be eliminated, and the basic risks can be reduced, thereby protecting the investor from losing their funds. In conclusion, it’s important to remember that fortune favors the bold, but luck favors the prepared. Authors: 1. Oleksandr Melnyk, Partner, Head of Corporate Law and M&A Practice at GOLAW, Attorney at Law 2. Nazarii Zeliak, Corporate Law and M&A Practice Associate at GOLAW  

The status of a representative office of a foreign company directly affects the taxation of the activities carried out by such a representative office in Ukraine. According to the provisions of the Tax Code of Ukraine, a permanent establishment is a fixed place of business through which the business activity of a non-resident is wholly or partially carried out in Ukraine. Such a place of business may, in particular, consist of a branch, office, factory, workshop, warehouse or premises used for the delivery of goods, server, etc. At the same time, in practice, disputes often arise regarding the qualification of a representative office: whether it performs only non-commercial functions, or actually carries out business activity in Ukraine and, accordingly, should be recognized as a permanent establishment. In this article, we will consider the current approaches of court practice to certain issues regarding the recognition / non-recognition of a non-resident’s representative office as having the status of a permanent establishment. Preparatory and auxiliary activities of a representative office Both domestic and international legislation provides that one of the cases when the business activity of a non-resident carried out through its representative office in Ukraine does not fall under the definition of a “permanent establishment” is when such representative office carries out activities of a preparatory or auxiliary nature. In particular, in the resolution dated February 15, 2024, in case No. 640/35881/21, the Supreme Court noted that when distinguishing core activities from preparatory and/or auxiliary ones, it is necessary to take into account that: preparatory or auxiliary activities must be carried out for the benefit of the non-resident, and not for third parties; core activities are usually perceived as activities that are substantial and significant based on the commercial goals and objectives of the organization; preparatory activity precedes the commencement of the non-resident’s core activity in the territory of Ukraine; auxiliary activity supports the process of conducting the core business activity by the non-resident and is carried out simultaneously with the core activity, but does not qualify as one. At the same time, auxiliary activity may be conducted either on a temporary or on a permanent basis. Thus, in this case, the Supreme Court concluded that, by their nature, the actions of the representative office related to the registration of medicinal products in Ukraine, as well as their subsequent promotion for sale, are of a preparatory and auxiliary nature, since such activities are intended to ensure the possibility of marketing the respective medicinal product in the territory of Ukraine. However, these operations do not necessarily lead to the generation of income in the territory of Ukraine. In the resolution of the Sixth Administrative Court of Appeal dated December 04, 2024, in case No. 640/13698/22, the issue of preparatory and auxiliary activities of a representative office was also examined, in particular taking into account the criterion of receiving / not receiving income from a certain activity of the representative office. The court noted that the activity of a representative office, which does not generate any income for the parent company, cannot, under any circumstances, constitute a significant part of the overall business activity of the enterprise, and therefore has an exclusively auxiliary nature. Duration of a representative office’s activity and expenses for its maintenance Tax authorities often refer to the long duration of a representative office’s activity on the territory of Ukraine, as well as to the significant amount of expenses incurred by the parent company for its maintenance, as circumstances which, in their opinion, indicate that such a representative office meets the criteria of a permanent establishment. At the same time, in the resolution of the Supreme Court dated February 15, 2024, in case No. 640/35881/21, it was concluded that international legislation does not establish specific timeframes after which a representative office acquires the status of a permanent establishment. As a general rule, in order to qualify as a permanent establishment, the activity must be regular, stable, and stationary – that is, carried out at a specific location and with a certain degree of permanence. However, in the opinion of the Supreme Court, the amount of expenses incurred by a non-resident to maintain a representative office may, under certain conditions, be considered a factor supporting the conclusion that such a representative office should be granted the status of a permanent establishment. At the same time, in order to determine whether such expenses are indeed significant, it is necessary to compare the amount of funding allocated to the representative office with the overall amount of funds received by the non-resident from its business activity, also taking into account the specifics of the business sector, market conditions, and other relevant factors in their entirety. A similar approach was also outlined in the resolution of the Sixth Administrative Court of Appeal dated May 05, 2025, in case No. 320/44103/23, which stated that the duration of the representative office’s presence at a specific location, the number of personnel, and the amount of fixed assets available cannot serve as grounds for granting such representative office the status of a permanent establishment, if its activities are limited to purely preparatory and/or auxiliary functions. Identity of activities and the conclusion of contracts on behalf of the parent company Disputes regarding the recognition of a permanent establishment of a foreign company in Ukraine often arise based on the existence of powers of attorney issued to certain individuals by such company, authorizing them to perform a wide range of functions. Tax authorities, as a rule, take into account not the actual actions performed under the power of attorney, but the content of such power of attorney itself. Thus, in the resolution dated July 04, 2024, in case No. 160/11095/23, the Supreme Court identified the following features of a permanent establishment, which may be applied either simultaneously or separately: the representative office carries out activities that are wholly or partially identical to the core activity of the non-resident; a person (other than an agent with an independent status) acts on behalf of the company and uses authority in the contracting state to conclude contracts on its behalf. In order to avoid recognition of identity between the activities of the parent company and those of the representative office, the latter’s activities must differ from the statutory functions of the parent company. Regarding the second feature, it is worth noting that the prevailing position remains that issuing a power of attorney with broad powers (including authority to conclude any contracts related to the non-resident’s activity) is not sufficient grounds for concluding that the representative is performing the functions of a permanent establishment. Conclusions regarding the performance of permanent establishment functions must be based directly on the analysis of the actual actions performed by such representative, rather than on the content of the power of attorney (resolution of the Supreme Court dated December 21, 2022, in case No. 200/7051/20-а, resolution of the Second Administrative Court of Appeal dated October 10, 2024, in case No. 440/18088/23, resolution of the Third Administrative Court of Appeal dated January 09, 2024, in case No. 160/9196/23). Engaging in investment activity Court practice sometimes reflects the view that the purchase and sale of corporate rights and other investment activities carried out by a non-resident’s representative office are not considered grounds for recognizing the representative office as a permanent establishment, even if such activities correspond to the activities of the parent company. However, in a recent resolution of the Supreme Court dated March 20, 2025, in case No. 280/4264/21, it was concluded that, according to the provisions of international and domestic legislation, investment activity is one of the types of business activity. In particular, for professional investors, such activity may constitute core business activity and a source of independent income. Therefore, in the opinion of the Supreme Court, it is important to distinguish whether the representative office is conducting investment activity as an independent (core) type of business activity, or whether it has an auxiliary nature related to supporting or developing the core activity. Thus, considering that in this case the representatives of the foreign company were carrying out investment activity (primarily concluding contracts for the purchase and sale of shares in Ukrainian companies) on behalf of the foreign company, and such activity was also identical to the core activity of that company, the representative office was recognized as a permanent establishment. Conclusion In conclusion, it should be noted that the determination of the status of a non-resident’s representative office in Ukraine is of significant importance for tax consequences and, in practice, often presents challenges. In general, as the analysis of court practice shows, courts go beyond a formal analysis and focus on the actual substance of the representative office’s activity. Therefore, foreign businesses should take the above-mentioned approaches into account when planning their activities in Ukraine in order to minimize the risks of tax disputes, additional tax assessments, and other negative consequences. Authors: Viktoriia Bublichenko, Partner, Head of Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law Tetiana Fedorenko, Senior Associate at Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law Anna Kostsova, Paralegal at Tax, Restructuring, Claims and Recoveries practice at GOLAW

Recently, the Agreement between the Government of Ukraine and the Government of the United States of America on the Establishment of a United States-Ukraine Reconstruction Investment Fund (hereinafter the “Agreement”) has come into force for Ukraine. The Agreement provides for the establishment of a limited partnership between the states (hereinafter the “Partnership”), the purpose of which is, inter alia, to encourage transparent, accountable and future-oriented investments in critical sectors of Ukraine's economy to support Ukraine's recovery strategy. For American investors, this Agreement grants access to perspective Ukrainian projects on special terms, with tax benefits, legal protection, and a stable investment environment. Investment opportunities Pursuant to the Agreement, Ukrainian state authorities will be required to include in all special permits for subsoil use or licenses a provision obliging the recipient of such permit/license, if they wish to raise capital, to provide the Partnership with relevant investment information on the terms of participation in a project. If the Partnership is officially interested in cooperation, the permit holder will have to engage in good faith negotiations with the Partnership and not offer any third party significantly more favorable financial terms for a similar project. It is assumed that the same provisions will be included in public-private partnership contracts, concessions, and agreements for the construction or operation of significant infrastructure relevant assets. In addition, all special permits for subsoil use or licenses should include provisions granting the United States partner (the International Development Finance Corporation) or its authorized representative the right to negotiate for offtake rights on market-based terms during the validity period of such permit or license. Moreover, the permits and licenses will also include provisions on refraining the permit holder from offering third parties significantly more favorable financial/economic terms for offtake of substantially similar quality or quantity of product. It should be noted that the Agreement covers a significant number of natural resources. It is expected that such provisions will create a real opportunity for American investors to participate in promising mining and infrastructure projects on favorable terms and with the support of the International Development Finance Corporation. Exemption from taxation and tariffs Given that the economic activities related to the Partnership will take place in Ukraine, the Government of Ukraine will guarantee that any income of the Partnership, contributions and other payments to the Partnership related to revenues and earnings/other payments under the Agreement will not be subject to any taxes, levies or withholdings by the Ukrainian state authorities. Meanwhile, the United States expects that it will not impose tariffs on the natural resources acquired under the Agreement. Currency convertibility and funds transfer Ukraine will provide free convertibility of hryvnia into U.S. dollars, as well as the ability to transfer funds to Partnership accounts, both in Ukraine and abroad, without any fees, conditions or delays. In the event of a deterioration in the balance of payments or a reduction in the level of gold and foreign exchange reserves, the Government of Ukraine, after consultation with the United States Department of the Treasury, may temporarily impose restrictions on the exchange of hryvnia into U.S. dollars and the transfer of funds to the Partnership's accounts. However, in such event, Ukraine shall be obligated to reimburse all costs and expenses incurred in connection with the imposition of payment, conditions or delays with respect to such payments (regardless of the reason for the establishment of the restrictions). Stability, perpetuity and priority of the Agreement Government of Ukraine ensures the following: regardless of the adoption of new regulations or amendments to existing legislation, to provide the Partnership and its partners with no less favorable conditions than those set forth in the Agreement; in case of inconsistencies between the provisions of Ukrainian legislation and the terms of the Agreement, to recognize the priority of the latter; not to refer to the norms of national legislation as a reason for failure to fulfill its obligations under the Agreement. It is worth noting that the Agreement is open-ended and will remain in force until the states agree to terminate it. Conclusions It should be noted that the Agreement has a framework nature. In particular, as envisaged by its provisions, the detailed mechanisms, procedures and conditions for the implementation of certain of the above-mentioned clauses were specified in the Limited Partnership Agreement, the official text of which is currently not available in publicly available sources due to its confidentiality. Nevertheless, even at this stage, the Agreement establishes the foundation for systematic cooperation between the states, enabling the United States side to participate in Ukraine's recovery by investing on favorable, stable and predictable terms. Authors: Viktoriia Bublichenko, Partner, Head of Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law Tetiana Fedorenko, Senior Associate at Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law Anna Kostsova, Paralegal at Tax, Restructuring, Claims and Recoveries practice at GOLAW

The problem of improper interference with the ownership structure of limited liability companies (LLCs) has been a persistent issue in Ukraine for many years. Businesses have repeatedly faced situations where shares in the charter capital have unreasonably “disappeared” from the Unified State Register (USR), and control over the company has been unauthorized transferred to third parties. This often occurs with the participation of dishonest state registrars who make changes to the USR on the basis of improperly executed or forged documents. More than 1200 notaries in Kyiv alone have access to the relevant registration actions, which significantly increases the risk of abuse. In many cases, by the time the rightful owner learns of a change in the participants or management, the company`s assets may have already been withdrawn or transferred to third parties. Challenging such actions requires significant time and resources and often involves complex administrative or judicial procedures with unpredictable outcome. In response to these challenges, and with the aim to enhancing the transparency of corporate governance, Ukraine has introduced a new approach to the accounting of LLC shares through the depository system. This mechanism became operational in March 2024, with the launch of a specialised share accounting system by the National Depository of Ukraine (NDU). Such accounting allows companies to transfer data on participants from the Unified State Register to the NDU system, preventing unauthorised changes and creating a new standard for digital security of corporate rights. What is the essence of the mechanism and what are the key advantages of registering LLC shares with a depository institution? The participant’s share in the LLC legally remains legally theirs, but the information about it is no longer stored and displayed in the USR. Instead, it is accounted for in the secure infrastructure of the depository institution in the same way as shares in joint-stock companies are accounted for. This approach ensures a higher level of confidentiality, protection of ownership rights and significantly reduces the risks of unlawful interference by excluding possible corporate changes of registrars and abuse by unscrupulous persons from the process. Only its owner and the selected depository institution have access to the custody account. State registrars do not have the technical ability to make any changes regarding shares. This is a key advantage of the system, ensuring real protection for shares from unauthorised interference. However, the transition to depository shares accounting not only provides a new level of legal protection but also opens up a range of modern digital services that greatly simplify the management of corporate processes for LLCs: accounting of all ownership rights in one place, quick transfer of ownership rights, guaranteed mechanisms for the execution of transactions, electronic meetings of shareholders (including through preliminary electronic registration of participants, remote voting and automatic recording of meeting results), payment of dividends, and sending of participant notifications. This is especially convenient for companies with multiple participants located in different cities or countries. Participation is possible without the need to issue powers of attorney or personal attendance, which significantly reduces administrative costs. In addition, the electronic form eliminates the risk of administrative or judicial appeals against the meeting due to violations of formal procedures. Another advantage of the system is the ability to effectively encumber shares. When information about the pledge is entered into the accounting system, the NDU blocks any dispositive actions with the share without the pledgee's consent. This completely eliminates the loss of collateral without the lender's knowledge. Unlike traditional shares pledges, where the debtor often blocks their sale, the NDU system allows for foreclosure without the pledger’s involvement, similar to the mechanism for shares. Thus, the pledge of shares in an LLC becomes more accessible to creditors, allowing them to raise financing on more favorable terms. The share accounting system provides for the possibility of using escrow accounts during share purchase and sale transactions in an LLC. Such an account is opened based on an agreement under which the NDU commits to credit the shares to the account and make changes to the share accounting system only upon the occurrence of the conditions agreed upon by the parties. This feature is particularly relevant for M&A deals where both parties are interested in transparency, legal guarantees and protection of their interests. Moreover, the escrow account operates in a secure mode: transactions are restricted, and the enforcement or imposition of a lien on shares held in such an account is not allowed. The integration of an LLC into the NDU system also provides a convenient mechanism for paying dividends. The LLC transfers funds to a special account with the NDU. The NDU then distributes the dividends to the participants directly or through depository institutions. This mechanism ensures automated and transparent accounting of payments, reduces the risk of errors or fraud, and provides participants with the confidence in the timely receipt of their income. One of the key advantages of the transition to the NDU accounting system is the increased level of confidentiality and data protection. This is especially important in the context of the ongoing hybrid war, when digital threats have become part of the reality. The events of late 2024 clearly demonstrated the vulnerability of state information systems when Ukraine suffered one of the largest cyberattacks. As a result, the majority of state electronic resources, including the Ministry of Justice’s registers, were temporarily shut down. The operation of the USR and other critical systems was halted, and although the authorities officially assured that no data breach occurred, the situation itself was a strong signal of the need for alternative, more secure systems for managing sensitive information. Against this backdrop, the share accounting system maintained by the NDU looks like a strategically safer solution for businesses. Information about the shares of LLC participants is not stored in the state register, but in a separate, specialised infrastructure that is not connected to the systems of the Ministry of Justice. This means that even if a large-scale cyberattack occurs again, state-related risks will not affect corporate rights if the registration is handled by the NSDU. An additional advantage is that the accounting system operates on cloud-based solutions with a high degree of redundancy and protection. It is accessible only to depository institutions, whose activities are strictly regulated. Unlike the USR, where changes can be made by a notary without a thorough verification of the underlying grounds, unauthorised interference is virtually impossible in the NSDU system. Furthermore, the system's architecture ensures the data integrity and immutability, while its technical isolation from government systems reduces the likelihood of external interference. How to transfer the accounting of shares in an LLC to a depository institution? First of all, the LLC charter shall include a provision stating that the accounting of shares in the LLC's charter capital is carried out in the accounting system of shares of the NDU. This is a critical condition because without the relevant provision in the charter, the NDU will not be able to accept documents and the state registrar will not be able to make changes to the USR. Additionally, the general meeting of LLC participants shall unanimously decide to transfer all shares to the accounting system. The next step is to conclude an agreement with the NDU and undergo the state registration. After updating the charter and adopting the resolution, the company submits a package of documents to the NDU, including an application for joining the public contract, constituent documents, ownership structure chart, a letter of no relation to the aggressor states, and the account registration form. After verifying the documents, the NDU applies to the Ministry of Justice with a request to enter the information into the USR. This date is considered to be the official start of the registration of the LLC's shares in the NDU system. It is also confirmed by an extract from the register, which is subsequently used to open accounts. The last step is the opening of accounts and the commencement of servicing. After the changes are made to the USR, the NDU opens the depositary accounts for the LLC and its participants. The participant can choose where their account will be serviced: directly by the NDU or by any of the depositary institutions that provide such services (e.g., a bank). The transition to the NDU share accounting system is not just a technical update, but a step towards strengthening corporate security, transparency and trust in business. This approach minimises the risks of unauthorised interference, provides access to modern digital services and complies with international corporate governance standards. For companies seeking stability, investment attractiveness and modern corporate tools, this is a forward-thinking solution. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law Oles Riabchuk, Senior Associate at Corporate Law and M&A practice at GOLAW, Attorney at Law

Despite the war, energy remains one of the most attractive industries for investors: in 2024 it provided 21% of the total income of the economy. This stimulates activity in the M&A market, where complex transactions require comprehensive legal support. General stages Given the complexity of M&A transactions in the energy sector, legal support should cover all key stages: from structuring the transaction to its integration and protecting the interests of the parties. Structuring involves determining the optimal form of the transaction: the purchase of shares or assets, merger or accession, taking into account legal, tax, financial and regulatory aspects. The main goal at this stage is to minimise risks and ensure the achievement of the strategic goals of the parties. Financial structuring includes analysis of sources of financing (own funds, credit resources, attracted investments) and preparation of relevant documentation, in particular credit agreements, pledge agreements,  suretyships, and bank guarantees. Tax structuring involves developing an efficient tax model in compliance with domestic laws and international standards, aimed at minimising tax liabilities and avoiding adverse fiscal risks for the parties. Where appropriate, a special purpose vehicle (SPV) is incorporated to execute the transaction. This approach may isolate risks, streamline financing, and optimise the tax burden. At this stage, legal support includes SPV incorporation, drafting and negotiating constitutional documents, ownership structure, etc. Legal counsel facilitates negotiations between the parties, protecting the client’s interests and securing favourable terms, particularly with regard to financing, guarantees and warranties, asset transfer, and risk allocation. Typically, the negotiation process begins with the signing of a Letter of Intent or Term Sheet between the parties, which defines the main terms of the potential transaction and the steps to be taken by each of the parties in preparation for the sale. A fundamental stage of the process is legal due diligence, a comprehensive review of the target’s legal standing, encumbrances, ongoing litigation, licensing, land, environmental and technical risks, among others. The findings of the due diligence are critical for the final decision on the transaction. In parallel, pre-sale restructuring may take place — optimisation of the corporate structure, debt restructuring, spin-offs or business consolidations, dispute resolution, and other risk mitigation measures — all aimed at enhancing the attractiveness of the target. Taking into account the chosen structure and the results of the legal due diligence, an appropriate package of legal documentation is prepared, including sale and purchase agreements, shareholders agreements, security agreements, as well as supporting documents. The accuracy of the documentation and its legal “cleanliness” are crucial for the safety of the transaction. Regulatory interaction includes obtaining merger clearance from the Antimonopoly Committee, licenses for relevant activities, grid connection specifications, construction permits, and other approvals. Due to sector-specific regulatory requirements, engagement with state authorities is often decisive for a successful deal. The final stage is the execution of the transaction — signing of all documents based on agreed commercial, legal and financial terms, and completion of pre-closing obligations (closing). In case of disputes or conflicts arising post-closing, the legal team ensures protection of the client’s interests, provides legal support in negotiations, represents the client in court proceedings, and implements measures to minimise potential losses. Key risks The process of concluding M&A transactions in the energy sector involves a number of risks that can significantly affect the success and implementation of the deal. One of the key challenges is strategic risk, which arises from misaligned deal objectives or the lack of a clear vision for future integration. Parties often overestimate the potential value of the business without having a realistic plan for merging operational activities, which complicates the realization of expected synergies after the transaction is closed. Regulatory risk poses a major threat. The energy sector is one of the most highly regulated industries; legislative changes, licensing complexity, or misinterpretation of regulatory requirements may delay or even block the transaction. Breaches of licensing, antitrust or environmental rules may result in administrative penalties and reputational damage. Financial risks are also critical. Inaccurate valuation of assets and obligations may lead to substantial losses. Often, after the conclusion of the transaction, previously unaccounted debts or infrastructure modernisation costs are revealed, which increases the total cost of investment and changes the financial model of the project. In addition, in order to successfully raise financing, the project must demonstrate the ability in the long term to generate a stable income sufficient to cover both operating expenses and loan servicing. Tax risks are a serious concern. Given the complexity and variability of tax laws, inefficient structuring of M&A transactions may cause significant tax obligations or claims from regulatory authorities. In the case of cross-border agreements, tax problems may increase due to the lack of harmonization of tax regimes of different jurisdictions. Environmental and technical risks form a separate category, especially regarding compliance with Environmental Impact Assessment (EIA) procedures. Energy projects — such as construction or refurbishment of power plants, oil and gas pipelines — may require EIA processing. Non-compliance may result in construction permit revocation, project suspension, or even administrative or criminal liability. Title risks regarding real estate and land use are also critical. Violations in land acquisition or zoning regulations may lead to loss of ownership or use rights, making project implementation impossible. Lastly, organisational risk cannot be overlooked. Lack of transparent ownership, shareholder conflicts, or flawed corporate governance may not only hinder deal execution but also endanger post-deal operations. Additional Considerations Legal support for energy M&A goes beyond classic stages such as structuring, due diligence, and contract drafting. Sector specifics require thorough analysis of additional aspects critical to post-deal integration, governance, and asset value preservation. One such aspect is intellectual property. In modern energy business — especially renewables, digital solutions, and smart grid technologies — IP rights are vital. Legal audit of patents, trademarks, proprietary technology, licence agreements, and know-how helps identify potential risks of IP loss or infringement. Proper IP transfer arrangements, confidentiality safeguards, and protection against information leakage are indispensable. Cybersecurity has also become an issue. With growing reliance on digital infrastructure, cyberattacks, data breaches, or IT failures may cause severe disruption. Legal due diligence should include an IT infrastructure audit and compliance with data protection laws (e.g., GDPR or local regulations). Amid today’s challenges, political and social risks demand special attention. Government policies, tariff regulation, access to state support — or conversely, new restrictions — may determine the transaction’s viability. Under martial law, where regulation evolves rapidly, long-term projections are highly uncertain. Accounting for these factors during structuring and evaluation helps adapt the deal model and improve resilience. Conclusions Legal support in energy M&A extends far beyond conventional legal tasks. It spans economic, technical, regulatory, and organisational domains, requiring deep cross-disciplinary expertise and strategic insight. This comprehensive approach not only mitigates risks but also delivers real added value for all parties involved. An inside look is always more valuable. If you want to get a deeper insight into the current state of the energy market, understand where the industry is heading, and what opportunities are opening up for investors today, we recommend listening to the GOLAW podcast. In it, the firm's partners share real-life cases, insights and practical business advice. Author: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law

The liquidation of a company is a legal process of terminating a legal entity, which may be initiated either by the business owners or on the grounds stipulated by law. Reasons for liquidation may include the completion of business operations, internal restructuring of a business group, economic impracticality of further operations, or changes in the owners' strategic vision. Although liquidation formally signifies the “end” of a business, in practice, it requires thorough preparation, particularly in analyzing the company’s financial, tax, and legal aspects over previous periods. This is why a pre-liquidation audit becomes a key instrument at this stage - a comprehensive internal review involving lawyers and accountants that help identify and address potential risks in a timely manner. These risks may not only include outstanding debts or unsettled obligations with counterparties but also deficiencies in reporting, errors in HR or commercial documentation, and unfulfilled obligations to regulatory authorities, which may not be immediately apparent. Conducting such an audit allows the company to avoid unforeseen delays, prepare for inspections, and mitigate legal and financial risks for the shareholders and the director. How should a pre-liquidation audit be organized, and what should be considered? Liquidation vs Bankruptcy. If it is discovered that the company lacks sufficient assets and funds to cover creditors’ claims, voluntary liquidation cannot be applied. In such cases, the company falls under insolvency legislation. This significantly complicates and increases the cost of the process, as it requires filing with the court (by the company itself or by its creditors), the involvement of an insolvency practitioner, and compliance with specific stages under bankruptcy law. The owners and management lose control over the company, which effectively comes under external administration. Moreover, bankruptcy may carry risks of joint or subsidiary liability for the owners and management if their actions contributed to the company’s insolvency. Therefore, before initiating liquidation, solvency shall be assessed, and debts restructured if necessary. Debt Management. If problematic or overdue debts are identified, the owners may restructure them. Possible tools include set-off of mutual homogeneous claims, debt forgiveness, or debt-to-equity swap (transforming debt into charter capital). Each option carries its own legal and tax consequences, so a careful assessment is essential before making a final decision. For instance, in the case of debt forgiveness, the forgiven amount is considered income for the debtor and affects the profit tax base. If restructuring involves increasing the company’s charter capital, this requires state registration of the changes, appropriate legal support, and correct accounting entries. Preparation for Inspections by State Social Insurance Authorities. During liquidation preparations, it is important to consider inspections by bodies responsible for mandatory state social insurance. Specifically, the Pension Fund of Ukraine inspects the period from January 1, 2007, and evaluates the accuracy of wage calculations and pension contributions. Given the long period covered, the company shall ensure availability of employment orders, timesheets, payroll documents, civil law agreements (and related acts), as well as copies of employee passports and tax identification numbers confirming employment and payment amounts. If the company operated before 2010, additional documentation inspections may be conducted by the Employment Center, assessing the calculation and payment of unemployment insurance contributions. Therefore, it is advisable to proactively verify the completeness of records confirming the correctness and timeliness of such payments. Lack of documentation may result in back-payment demands or fines, complicating or increasing the cost of liquidation. Preparation for Tax Inspections. Before liquidation, the company should assess the risk of additional tax assessments, focusing particularly on the presence of primary documents supporting each business transaction. These are the basis for accounting records, and in their absence, any expenses, income, or other transactions may be deemed fictitious or unjustified by the tax authorities, leading to assessments and penalties. To streamline data, summarized accounting records may be used, but they shall be based on actual primary documents. Having complete and reliable documentation of all transactions ensures accurate financial statements and minimizes the risk of additional assessments or fines. If the company was a VAT payer, in some cases it may be advisable to preemptively cancel VAT registration to speed up the liquidation. However, it shall be noted that once cancelled, the company loses the right to file VAT returns and thus to recover any remaining VAT credit from the last return. Therefore, before submitting a VAT deregistration application, the company should analyze the VAT credit situation and, if there is a balance, consider claiming budget reimbursement. Additionally, the balance of the VAT electronic administration account should be reviewed and, if negative, the outstanding amount should be settled in advance. For example, if the VAT credit in the last return exceeds tax liabilities, and certain conditions are met, the company may claim reimbursement. The three key conditions are: The VAT was actually paid in cash (barter or set-offs are not eligible); The reimbursement does not exceed the electronic invoice registration limit; The taxpayer has no outstanding VAT liabilities. If these conditions are met, the company may submit a reimbursement claim with its final VAT return. However, the tax authority has 30 calendar days to conduct a desk audit, and if there are doubts about the validity of the declared amounts, a documentary (unscheduled) audit may be initiated. In today’s environment, where tax authorities frequently issue additional assessments, recovering VAT can be practically valuable. These funds can cover potential assessments or penalties, allowing the liquidation to be completed without further financial losses. If a reimbursement claim is not filed, the remaining VAT credit will be permanently lost. If the company does not pursue reimbursement or does not meet the above criteria, it may opt for a so-called “deemed sale” before deregistering for VAT. This involves charging VAT on all remaining goods, services, or non-current assets not used in economic activities but for which VAT credit was claimed, based on their fair market value. In any case, this stage requires careful analysis of asset balances, reporting, and financial capacity, and it is recommended to engage a tax specialist or accountant. Communication with Staff and Top Management. In liquidation, dismissals are usually carried out due to organizational changes. This requires personal notification of each employee at least two months in advance. In case of mass layoffs, the Employment Center shall also be notified in advance, and consultations with the trade union (if any) shall be held. Violations of the procedure may result in labor disputes or block liquidation due to unresolved employee claims. The law requires severance pay (at least one average monthly salary), compensation for unused vacation, and full settlement on the termination day. In some cases, such as socially protected categories, additional guarantees apply. Alternatively, employment may be terminated by mutual agreement, provided the terms are balanced and clearly defined for both parties. Special attention should be given to employees with additional social protection (minors, single parents, pregnant women, etc.). Termination without observing procedures or offering alternative employment may be ruled unlawful. Thus, an internal audit of personnel matters is advisable before initiating liquidation to ensure compliance with all legal requirements. In conclusion, a pre-liquidation audit is a strategic entry point into a safe and controlled closure of business operations. It enables early identification of hidden legal, financial, and tax risks, helps eliminate barriers to liquidation, and aligns the process with the company’s actual condition. Such an audit ensures a transparent closure process, protects the interests of owners and management, and helps avoid conflicts with employees and claims from regulatory authorities. Today, state authorities increasingly recognize and support this approach. With proper preparation and accurate documentation, liquidation can proceed swiftly and without complications. Therefore, a professional pre-liquidation audit should be seen not as an expense, but as an investment in predictability, safety, and the company’s reputation even at its final stage. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law Oles Riabchuk, Senior Associate at Corporate Law and M&A practice at GOLAW, Attorney at Law

Charter capital is the sum of funds and/or property that founders (participants) transfer to an LLC (hereinafter referred to as “company”) when it is set up and during its existence. Charter capital is the nominal value of the participants’ shares, expressed in hryvnias. Notably, the law does not set a minimum threshold for the amount of charter capital for limited liability companies (unlike for joint stock companies), so its value is determined by the founders. The formation of charter capital refers to the process in which participants make their contributions in the prescribed manner and amount. As a result, a declared charter capital is backed by property and/or funds. Charter capital is considered fully formed only when all participants have paid for their shares in full. Ukrainian law requires that each participant makes their full contribution within six months from the company’s registration date unless the company’s charter states otherwise. This period can be shortened or extended by a unanimous decision of a general meeting attended by all participants. If declared charter capital is not fully paid within a prescribed period, an unpaid portion remains unformed, and the company, along with a general meeting, shall take the necessary steps as outlined by the law to address the situation. 1. WHAT ARE THE WAYS TO FORM CHARTER CAPITAL? Charter capital can be formed in various ways depending on the type of contribution. The law allows participants to contribute both money and property, giving participants a wide range of options. Both individuals and legal entities, whether based in Ukraine or abroad, can participate in charter capital formation. The procedure for contributing may differ for each category of participant. 2. Monetary contributions Contributing money to charter capital is the most common method of forming it. An individual may contribute by paying cash at a bank branch or by transferring funds directly into the company’s account. A legal entity, on the other hand, should contribute exclusively via bank transfer, transferring money from its account to the company’s account. In both cases, the payment’s purpose specified in payment instructions is a contribution to the company’s charter capital, and a bank certificate (receipt) serves as a confirmation of the payment. Foreign investors (both individuals and legal entities) can also make monetary contributions. In such cases, foreign participants transfer funds in foreign currency, which are converted into hryvnias and credited to charter capital. However, this procedure is more complex due to currency regulations and the need for documents proving a source of the funds. Financial monitoring at the bank where the company’s account is held will require the provision of documents that justify crediting funds to the account. Under normal circumstances, minutes of general meeting (or resolution of sole founder participant (participant), in the case of a sole founder) will suffice to resolve this issue. However, additional documentation and clarification may be required in some cases. The next point to consider regarding contributions from non-residents is a difference in amounts due to the conversion of the contribution from foreign currency to hryvnias. Even though the minutes of the general meeting (or resolution of sole founder participant (participant)) specify an amount of charter capital both in foreign currency and in hryvnias as of the general meeting date, the amount converted at a later date may differ. This could result in a credited amount exceeding the original sum mentioned in the minutes. This technical discrepancy may cause issues when crediting funds to the company’s bank account. For this reason, it is advisable to agree with the bank in advance to handle any discrepancy and avoid refunds to foreign investors. 3. Property contributions In addition to money, participants can form charter capital by contributing property or property rights. The law clearly states that contributions can include not only cash but also securities and other property with monetary value. Contributing property to charter capital is a convenient option, especially when there is a tight deadline for full payment of a share by a participant. For example, this may be used when a participant wishes to sell or transfer part of their share to another investor in an already established company. If a newly created company has a large ownership structure, then its verification by the bank’s financial monitoring service, providing the bank with additional information and explanations in a short time may become technically impossible, and opening an account, respectively, also. In such cases, contributing property is an effective way to fulfil the participant’s obligation to pay for their share. Contributions can include securities, movable or immovable property (e.g., equipment, vehicles, real estate), intellectual property rights, corporate rights in another legal entity, etc. Establishing the value of property in hryvnias is essential for non-cash contributions. The valuation of a property contribution should be approved by a unanimous decision of a general meeting attended by all participants or, in the case of company formation, by the founders’ decision. That is, participants jointly agree on the value of property being transferred to credit this amount towards payment of their shares. Property contributions involve transferring ownership of an asset to the company, and the procedure differs depending on the type of asset. Thus, the transfer of securities will require the preliminary opening of a securities account with subsequent crediting of securities to it as a contribution. For real estate, a contribution requires an agreement between the participant and company, followed by state registration of ownership. For intellectual property rights (such as software code, trademarks, etc.), an agreement should be executed with the company, specifying the scope, territory, and terms of the rights being transferred, as well as registration changes, if applicable. Intellectual property contributions are often used when establishing joint ventures, where some founders contribute intellectual property while others contribute money. This arrangement allows businesses to assess the value of intellectual property rights and determine the scope of corporate rights in connection with that contribution. Transferring corporate rights from another company as a contribution requires signing an agreement, an acceptance and transfer act, state registration of participant change, along with updating ownership structure and beneficial owners. Importantly, once property is credited, the company acquires ownership of the property, and participants receive corporate rights in proportion to the value of their contribution. 4. WHEN CHARTER CAPITAL IS CONSIDERED UNFORMED, WHAT ARE THE CONSEQUENCES? Charter capital is considered unformed if, after the deadline for making contributions, participants have not fully paid for their declared shares and part of charter capital remains unbacked by real assets. In this case, the law requires the company and its participants to take action to resolve the situation, and it outlines the potential consequences for participants. First, participants who fail to make their contributions on time are jointly and severally liable for the company’s obligations up to an unpaid amount. This provides an additional guarantee for creditors: if a company lacks sufficient assets to pay its debts, creditors may seek payment from participants who have not fully paid their share in charter capital. Second, the company’s executive body should send a written notice to defaulting participants, informing them about overdue contributions and offering an additional payment period (up to 30 days). If a contribution is not made within an additional period, the company should convene a general meeting to decide what to do with the unpaid capital. The law provides several options: (1) exclude participants from the company; (2) reduce charter capital by the amount of unpaid contribution; (3) redistribute unpaid shares among other participants (with an additional payment); or (4) liquidate the company. During the period in which a participant owes company contribution, their votes will not be counted in decisions related to the unpaid share. Failure to contribute within the prescribed period carries both financial and corporate consequences for a participant, including potential loss of their share or reduction in the charter capital. Moreover, ensuring the proper formation of charter capital and verifying the fulfilment of contribution obligations is crucial in preventing litigation related to share payments. For example, in case No. 924/9/21 (resolution of the Supreme Court dated 13 June 2024), a participant who had sold their share attempted to declare the sale and purchase agreement and the share transfer act invalid, claiming their share in charter capital was not fully paid at the time of the sale. The Supreme Court rejected these claims, noting that the participant’s failure to pay for their share before transferring does not violate their rights. The court found the claimant’s actions to be in bad faith, as they had voluntarily agreed, assuring the buyer that the share was fully paid for, only to later attempt to cancel the agreement due to their own breach. This case highlights the importance of properly forming charter capital and verifying that participants have fulfilled their contribution obligations to avoid disputes. Thus, ensuring the proper formation of charter capital is essential both for protecting the financial and corporate rights of participants and for safeguarding the rights of potential future acquirers of shares in charter capital. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A practice at GOLAW, Attorney at law; Yevhenii Ahashkov, Senior Associate of Corporate and M&A practice at GOLAW, Attorney at law; Oleksandr Shevchuk, Junior Associate of Corporate and M&A practice at GOLAW.

Despite the legislative definition of the specifics of scheduled or unscheduled tax documentary audits, companies often wonder how to act during such audits, what documents and in what way to provide, etc. It is important to understand that familiarization with the basic requirements for a tax audit can often help a company avoid unwanted additional charges and ensure the availability of necessary evidence in the event of further appeals against tax authorities' decisions. In this regard, we suggest in this article to consider what steps should be followed in the course of scheduled or unscheduled tax documentary audits. I. Conditions under which a tax authority may start an audit Taxpayers sometimes hesitate to allow tax officials to conduct an audit. Questions usually arise regarding the documents that the tax authority must provide to start an audit. Thus, the Tax Code of Ukraine stipulates that officials of the controlling authority have the right to start a tax audit if there are grounds for such an audit and the following conditions are met: ▪ a referral for an audit is sent or presented to a taxpayer; ▪ a copy of the order to conduct the audit is sent or submitted before the audit begins; ▪ the official IDs of the persons specified in the referral for the inspection are provided. It is worth noting that both the referral for an audit and the order are valid if they are signed by the head (his/her deputy/authorised person) and stamped by the supervisory authority. As for the documentary scheduled audit, the right to conduct it is granted only if the taxpayer has been sent (handed) a copy and a written notice indicating the date of commencement of such an audit, not later than 10 calendar days before the date of its conduct. Failure to submit or send the above documents to the taxpayer or submission of such documents in violation of the requirements for their execution is a ground for preventing officials of the controlling authority from conducting an audit. It should be borne in mind that if a taxpayer decides not to allow the audit, regardless of the reasons, the tax authority has the right to initiate an administrative seizure of the taxpayer's property and funds. Therefore, before deciding to prevent the tax authority from conducting an audit, it is necessary to weigh up all the risks for the taxpayer. II. Peculiarities of providing documents during an audit If representatives of the tax authority have provided the taxpayer with all the above documents with all the necessary details and have started the audit, the question arises as to the specifics of providing the taxpayer's documents for the audit. Thus, when conducting audits, officials of the controlling authority have the right to obtain from taxpayers duly certified copies of primary financial, economic, accounting and other documents related to the subject of the audit. At this stage, it is recommended to consider the following: 1. It is necessary to clearly understand the subject of the audit and the timeframe for its conduct, which are specified in the audit order. This will determine the list of documents to be provided to the supervisory authority. Thus, a taxpayer is obliged to submit for an audit only those documents that relate to the subject of such an audit. The taxpayer has the right not to provide documents confirming transactions that go beyond the scope of the audit. 2. Documents shall be submitted in copies. The tax authority is prohibited from seizing the originals of primary, financial, economic, accounting and other documents, except in cases provided for by the criminal procedural legislation. Copies of documents submitted to the tax authority must be duly certified (date, name, position and signature of the official, stamp (if any), inscription "as per the original"). At the request of the supervisory authority, a large taxpayer is also obliged to provide, by means of electronic communication, copies of documents created by it in electronic form on accounting for income, expenses and other indicators related to the determination of taxable objects, primary documents, financial statements, etc. no later than two business days following the day of receipt of the request. 3. The law stipulates that copies of documents are formalized by a description. Such a description is drawn up by officials of the controlling authority and handed over to the taxpayer for signature. However, even if the officials do not draw up such a description, the taxpayer is advised to draw it up independently and obtain the signature of the inspectors. In case of the need to appeal against the decisions of the tax authority based on the results of the audit, such descriptions will serve as evidence of the provision of the necessary documents for the audit and the taxpayer's good faith. In practice, in the audit act, the officials of the controlling authority often do not provide a clear list of documents submitted to them, but only a general description of them. 4. The transfer of documents containing trade secrets or confidential information is carried out separately from other documents under an act containing a description of the full list of documents and indicating the official of the tax authority that received them. Such an act must be signed by both the official of the controlling authority and the taxpayer. III. Peculiarities of communication with the tax authority during an audit During the audit, there is also a need to communicate with representatives of the supervisory authority, provide certain explanations or additional documents. It is recommended to ensure that such communication is in writing. After all, written requests and responses to them may later become necessary evidence when appealing against decisions of the tax authority. In this regard, the following steps should be taken during the audit: 1. Depending on the circumstances of the audit, draw the attention of the officials of the tax authority to the importance of issuing requests for explanations or additional documents in writing. 2. Provide written responses to requests for documents or explanations and record the sending/personal delivery of such responses. 3. When receiving requests from the supervisory authority, it is necessary to review them to determine whether the requested documents are relevant to the subject matter of the audit and whether the business transactions for which explanations or documents are requested relate to the period under audit. 4. If the taxpayer has received individual tax consultations on issues related to the subject of the audit, it is worth referring to such consultations. After all, if the taxpayer acted in accordance with the individual tax consultation received, it is exempt from fines and penalties. 5. Please note that a request for copies of primary financial, economic, accounting and other documents must be submitted by an official of the supervisory authority no later than five business days before the end of the audit. If such a request was submitted in violation of the specified time limits and the taxpayer does not have time to prepare a response to it and the necessary documents, such a taxpayer has the right to apply to suspend the documentary on-site scheduled or unscheduled audit for at least five business days. IV. Review of the audit findings The results of the audits are drawn up in the form of an act (if violations are detected during the audit) or a certificate (if no violations are detected), which are signed by the officials of the controlling authority and the taxpayers. Please note that the tax legislation establishes an obligation for a taxpayer to sign an act (certificate) drawn up as a result of an audit. Sometimes, representatives of companies that do not agree with the results of the audit set out in the act refuse to receive and sign it. It is worth noting that such actions are not constructive and do not affect the taxpayer's obligation to pay the monetary liabilities determined by the controlling authority based on the results of the audit. Therefore, after receiving the audit act, it is recommended to take the following actions: 1. Carefully read the described violations and conclusions of the audit act and, if received in person, sign it (in case of disagreement with the conclusions of the audit act, sign it with a reservation of disagreement and future objections). 2. Provide objections (in case of disagreement with the conclusions of the audit act), which may be submitted together with a signed copy of the act or separately within 10 business days from the day following the day of receipt of the act. Nevertheless, it is recommended not to rush to submit objections together with the signing of the act, but to thoroughly prepare such objections with all the necessary additional documents. The stage of filing objections is very important, as all the materials attached to the objections, as well as the objections themselves, are an integral part of the audit materials. In other words, if the taxpayer was unable to prepare or submit certain documents during the audit, it must do so within the time limit for filing objections. In addition, the tax legislation stipulates that if a taxpayer fails to provide the supervisory authority with documents confirming the tax reporting figures within the deadline for filing objections, it is considered that such documents were not available to the taxpayer at the time of preparation of such reporting. This may make it difficult to appeal against the decisions of the tax authorities in the future. The objections must also provide explanations and attach documents confirming the absence of guilt, the existence of mitigating circumstances or circumstances exempting from financial liability. Such objections are submitted to the tax authority that conducted the audit. 3. Participate in the consideration of objections. All additional explanations and documents set out in the objections should be taken into account when considering the objections by the relevant committee for consideration of objections. Participation in the consideration allows the taxpayer/its representative to understand the position of the tax authority/key doubts and provide answers to all existing questions and convey its position. This may help the taxpayer to clarify certain issues that were not taken into account during the audit, which, among other things, may help to reduce potential tax surcharges while issuing tax notice-decisions. Thus, the company's actions during a tax audit play a significant role in the conclusions that the tax authority will draw as a result of such an audit. Competent organisation of the actions of company officials, a responsible approach to communication with the tax authorities and proper preparation of documents can help avoid erroneous tax charges. GOLAW has extensive experience in: ▪ providing legal support in preparation for the audit; ▪ legal support during the tax audits; ▪ appealing against the results of tax audits. GOLAW specialists will be able to quickly and efficiently analyse the circumstances of the audit, the taxpayer's business transactions for compliance with tax legislation and provide relevant recommendations, provide audit support, formulate a legal position for the purposes of filing objections to the audit act and appealing against the tax notice-decisions, prepare objections and allnecessary documents for appealing against the tax notice-decisions both out-of-court and in court, and develop a GR strategy depending on the circumstances of a particular situation. Authors: Viktoriia Bublichenko, Partner, Head of Tax, Restructuring, Claims and Recoveries practice, Attorney at law Tetiana Fedorenko, Senior Associate of Tax, Restructuring, Claims and Recoveries practice at GOLAW, Attorney at law  

In 2024, Ukraine significantly increased its electricity imports, raising the volume by 5.5 times compared to the previous year, reaching 4.4 million MWh. According to monitoring data from ExPro Electricity, the largest electricity supplier was Hungary, accounting for 39% of total imports. Other suppliers included Slovakia (23%), Romania (18%), Poland (14%), and Moldova (5%). The largest importers were the following companies: D.TRADING LLC, LLC DE TRADING, JSC “ECU”, DNEPROSTEEL-ENERGO LLC, LLC AXPO UKRAINE, and EUROMIN ENERGY, LLC. As of December 1, 2024, the maximum volume of electricity imports from Europe to Ukraine was increased from 1.7 GW to 2.1 GW. 1. How did this become possible? A major achievement for Ukraine was its connection to the unified continental European power system, ENTSO-E, and notably, this occurred one year ahead of the originally planned schedule. The timeline of Ukraine’s synchronization with ENTSO-E is as follows: ● February 24, 2022 – The Ukrainian power system began operating in isolation due to russia’s full-scale invasion of Ukraine; ● February 28, 2022 – European energy ministers approved Ukraine’s connection to ENTSO-E; ● March 16, 2022 – The Ukrainian power system was synchronized with ENTSO-E; ● April 26, 2022 – Ukrenergo was granted observer member status in ENTSO-E; ● November 28, 2023 – ENTSO-E confirmed that Ukrenergo had fulfilled the requirements of the Technical Measures Catalogue; ● December 14, 2023 – The ENTSO-E Assembly, the highest governing body, granted Ukrenergo full membership status in ENTSO-E. 2. Types and Conditions of Participation in Auctions In accordance with the legislation of Ukraine and the European Union, granting access to cross-border transmission capacity for electricity through interconnections to market participants via auctions is one of the responsibilities of the Transmission System Operator (hereinafter referred to as the “TSO”). The sole TSO in Ukraine is NPC "Ukrenergo". Auctions are conducted in compliance with Ukrainian legislation regarding electronic documents and identification. Each auction allocates not only the available transmission capacity planned for that specific auction but also any capacity that was not distributed in previous auctions or was returned to the auction office. Only electricity market participants are eligible to take part in the auctions. According to the Market Rules, electricity market participants include: aggregators, producers, electricity suppliers, traders, small distribution system operators, the Transmission System Operator (TSO), distribution system operators, the market operator, energy storage system operators, the guaranteed buyer, and consumers (including active consumers). All auction participants have equal opportunities to obtain transmission rights for electricity. Since 2023, both unilateral and joint auctions have been introduced for the allocation of cross-border interconnection transmission capacity. Unilateral allocation for the Ukraine-Poland interconnection (Dobrotvir-Zamość) and joint allocation for the Ukraine-Romania and Ukraine-Moldova interconnections are conducted via the TSO’s auction platform. Participation in the auction requires the prior conclusion of an access agreement, obtaining access to the auction platform, and providing the necessary financial security. To conclude the access agreement, the applicant must submit a request and the required set of documents to the TSO. The auction office verifies all submitted information, after which a decision is made regarding registration or refusal. Registered auction participants are required to provide financial security to guarantee payment based on the auction results. This security may take the form of a bank guarantee or a monetary deposit, which will be used by the auction office to confirm participation in the auction. Transmission capacity is allocated among participants who offer the highest price, in accordance with the principle of priority allocation of requests. Joint coordinated allocation of cross-border transmission capacity for the Ukraine-Poland, Ukraine-Hungary, and Ukraine-Slovakia borders has been implemented on the European allocation platform JAO. To participate in joint auctions conducted by JAO, participants must complete several registration steps: 1. register on the support service platform to manage requests; 2. submit the required set of documents no later than 9 business days before the auction date. After registration, a user account is created for participation on the JAO trading platform. According to the Market Rules, auction winners must provide the TSO with an import schedule for each cross-border interconnection, taking into account the results of the daily auctions, by gate closure time for the nomination physical transmission rights, as specified on the relevant platform. 3. Who can benefit from electricity imports? As of now, electricity import capacity is utilized at less than half of its potential, primarily due to high prices in Europe. According to data from JSC "Market Operator", on March 12, the day-ahead market base load index in Ukraine was €106.00/MWh, while in Poland it was €124.31/MWh, in Slovakia €124.03/MWh, and in Romania €123.42/MWh. However, the situation was different in the summer of 2024: on July 3, Ukraine’s base load index stood at €144.83/MWh, while in Poland it was €114.85/MWh, in Slovakia €94.49/MWh, and in Romania €116.95/MWh. This was partly due to frequent outages and extreme heat. Nonetheless, similar market conditions are expected in the upcoming summer, suggesting that electricity imports could once again become economically advantageous. On November 26, 2024, the Government of Ukraine updated the rules for electricity imports during martial law by adopting Resolution No. 1342. Under the new provisions, during periods of scheduled hourly power outages, companies that import at least 60% of their hourly electricity consumption will not be subject to electricity restrictions. This measure helps reduce the load on the domestic electricity market. Previously, the required import share for exemption was set at 30%, 50%, and 80%. These changes create favorable conditions for businesses, especially energy-intensive enterprises, by ensuring a stable electricity supply and reducing economic risks amid unpredictable energy restrictions. An important issue is the guarantee of origin for electricity. It is worth noting that recognition in Ukraine and international trade in guarantees of origin issued in Europe — and vice versa — will only become possible once Ukraine’s National Energy and Utilities Regulatory Commission (NEURC) obtains membership in the Association of Issuing Bodies (AIB). On May 30, 2024, by decision of the AIB General Assembly, Ukraine, represented by NEURC, officially acquired membership status in the Association. NEURC anticipates that full integration into the AIB will be completed by the end of 2025. Guarantees of origin for Ukrainian businesses provide an opportunity to ensure the competitiveness of Ukrainian products in EU markets, alleviate the impact of the Carbon Border Adjustment Mechanism (CBAM), and more. In summary, Ukraine is actively developing mechanisms for electricity import, which enables the expansion of energy capacity and offers strong opportunities for business growth. The coordinated use of cross-border auctions, along with ongoing legislative updates, supports Ukraine’s integration into the European energy network and strengthens its energy independence. Authors: Oleksandr Melnyk, Partner at GOLAW, Head of Corporate Law and M&A practice, Attorney at law; Khrystyna Zimenko, Associate of Corporate Law and M&A practice at GOLAW  

Over the past year, the employee reservation procedure in Ukraine has changed several times, which has added new challenges for businesses. However, recent trends in the regulation of the procedure indicate a course towards its simplification and automation. One of the most progressive innovations has been the introduction of the employee reservation service through the Diia portal. This digital service has significantly streamlined the process of reserving employees, as the entire process is done online and in a few clicks. Nevertheless, even with the updated procedures, businesses may still face difficulties when reserving their employees. In this publication, we focus on the key mistakes employers make during the employee reservation process, as well as important nuances that should be considered. 1. Inaccessibility of the reservation service via the Diia portal Often, enterprises that are recognized as critical to the functioning of the economy and essential services during martial law encounter difficulties accessing the employee reservation service via the Diia portal. This is due to the fact that such enterprises are not included in the Unified List of state authorities, other state bodies, local self-government bodies, enterprises, institutions and organizations to reserve persons liable for military service (hereinafter also referred to as the Unified List). To resolve this problem, the company should apply to the authority that recognized it as a critical enterprise with a request to add its data to the Unified List. 2. Common errors in selecting employees for military reservation One of the most common mistakes employers make is to try to reserve employees who do not meet the requirements set out in the Procedure for Reserving Persons Liable for Military Service for the Period of Mobilization and Wartime No. 76 (hereinafter also referred to as the Procedure). In particular, in accordance with the Procedure, a person liable for military service may be successfully booked if he or she: - is duly registered with the military service registry; - is in an employment relationship with a state body, critical enterprise, or critical institution; - has clarified the personal data specified in paragraph 2 of Section II “Final and Transitional Provisions” of the Law of Ukraine No. 3633-IX dated April 11, 2024 “On Amendments to Certain Legislative Acts of Ukraine on Certain Issues of Military Service, Mobilization and Military Registration”; - is not listed as wanted by law enforcement. . Failure to meet these requirements will result in a denial of the employee's reservation.. Moreover, under current practice, the following factors may also prevent an employee from being reserved: - full or partial absence of up-to-date information about the employee in the Unified State Register of Conscripts, Persons Liable for Military Service and Reservists (hereinafter also referred to as the Register); - the presence in the Register (the “Reserve+” application) of a mark on the employee's violation of the rules of military registration; - if an employee who is liable for military service has a deferral from military service during mobilization on other grounds; - an employee has a reservation with another company, institution or organization. 3. Non-compliance with the salary criterion One of the main changes in the reservation procedure starting in December 2024 was the introduction of a salary criterion for employee reservations. From now on, the employees of critical enterprises and institutions included in the lists (except for the exceptions provided for in the Procedure) must be paid a monthly salary for the entire period for which the reservation is granted, no less than 2.5 times the national minimum wage (currently, this amount is UAH 20 thousand). It is important to note that non-compliance with the above salary criterion will result in the cancellation of the reservation for the employee. 4. Incorrect display of the number of employees liable for military service Employers also often face the problem that the Diia portal contains an incorrect number of employees liable for military service, or displays dismissed employees, or newly hired employees are not displayed. . In this regard, we note that information on the number of employees liable for military service comes from the Register and the Pension Fund of Ukraine (hereinafter also referred to as the Pension Fund). To update employee information, you should use the Pension Fund's e-services portal, in particular, to submit information on hiring, dismissal, reinstatement, temporary termination/renewal of an employment contract, etc. After completing these steps, updated information about employees will appear on the Diia portal. In view of the above, the updated Procedure streamlines the employee reservation mechanism, yet still demands a diligent approach from employers and a clear understanding of the applicable rules. Following the above instructions will help to avoid mistakes and ensure predictable and stable operation of businesses. Authors: Kateryna Manoylenko, Partner, Head of Litigation and Dispute Resolution practice at GOLAW, Attorney at law; Kateryna Tsvetkova, Partner of Litigation and Dispute Resolution practice at GOLAW, Attorney at law; Ilona Rudnyk, Associate at Litigation and Dispute Resolution practice at GOLAW, Attorney at law.

Understanding the key aspects and specifics of court practice in labor disputes will help both employers and employees to protect their rights effectively and avoid potential conflicts in the future. In this article, we will look at the trends in labor disputes by analyzing the main decisions of the Supreme Court in 2024. ➔ Recovery of non-pecuniary damage in a labor dispute: what are the time limits for going to court? As a general rule, the time limit for filing a claim in a labor dispute is three months, and in cases of dismissal - one month (Article 233 of the Labor Code of Ukraine (hereinafter - the Labor Code of Ukraine). However, in many labor disputes, employees also seek compensation for moral damages. But do these time limits apply to such claims? In case No. 755/3443/21, the plaintiff was repeatedly dismissed from his job, and the court ruled these dismissals unlawful. However, the employer failed to comply with the court's decision to reinstate him. Due to prolonged litigation and forced absenteeism, the plaintiff filed a claim for non-pecuniary damage. The Supreme Court dismissed the claim due to the missed deadline under Article 233 of the Labor Code of Ukraine. However, the Supreme Court emphasized that the time limits set forth in Article 233 of the Labor Code of Ukraine do not apply to compensation for non-pecuniary damage caused by violation of labor rights. The Court acknowledged that the prolonged failure to comply with the decision on reinstatement caused the plaintiff to suffer mental anguish, and therefore ordered the employer to pay the plaintiff compensation for non-pecuniary damage (Resolution of the Supreme Court of 24 January 2024 in case No. 755/3443/21). Thus, the general limitation period of three years applies to claims for compensation for non-pecuniary damage in a labor dispute. ➔ A link to a website with a list of vacancies is not evidence of fulfillment of the obligation to offer the employee another job If an employee is dismissed on the grounds of redundancy, the employer must offer the employee another job. In the circumstances of case No. 638/14165/21, the employee was dismissed due to redundancy, but the employer limited the employee’s ability to apply for vacant positions.. Thus, instead of offering the employee a vacancy and transferring him to another job, the employer suggested that the employee familiarize himself with the list of vacancies on its website. Upon reviewing the case, the Supreme Court stated that the employer is obliged to offer all vacant positions that existed at the company before the dismissal. At the same time, the Supreme Court concluded that a link to a list of vacancies on the website is not evidence of fulfillment of this obligation, as it is impossible to establish with certainty: ● which vacancies were available on the employer's website at that time and whether all the vacancies available at that time were listed there; ● whether the plaintiff familiarized himself with the list of vacancies and had access to the said website (Resolution of the Supreme Court of February 21, 2024 in case No. 638/14165/21). Thus, a link to a website with a list of vacancies does not relieve the employer of the obligation to provide the employee with specific offers for vacant positions. Dismissing an employee without proper compliance with these requirements is unlawful. ➔ Being abroad during martial law does not automatically justify an employee’s absence from work In recent years, many employees have been forced to leave Ukraine because of the war. As a result, some employees have been unable to report to work or fulfill their labor duties (if it is not possible to do so remotely). But can such employees be dismissed for absenteeism? In the circumstances of case No. 420/645/23, the plaintiff was absent from work from April to December 2022, did not report the reasons for her absence, and was therefore dismissed for absenteeism. Later, the plaintiff explained her absence by the military aggression of the Russian Federation, which posed a threat to her life, and forced her to leave the country. The Supreme Court stated that traveling abroad due to military operations is a circumstance that can explain absence from work, but it does not exempt from the need to inform the employer of your situation. The plaintiff did not file any applications, such as for leave or suspension of the employment contract, which demonstrated her unwillingness to settle the employment relationship. The Supreme Court ruled that the circumstances of military aggression are not an automatic ground for absence from work if the employee has not taken any action to notify the employer of the circumstances that prevent him from performing his duties. As a result, the Supreme Court recognized the employer's actions as lawful, noting that the plaintiff's absence from work was a continuing violation of labor discipline that began in April 2022 (Resolution of the Supreme Court of April 3, 2024 in case No. 420/645/23). In another case, No. 552/7015/22, the Supreme Court confirmed this position, stating that the plaintiff's decision to stay outside Ukraine in a safer place was her absolute right. However, this decision does not negate the fact of absenteeism. The Supreme Court pointed out that martial law must have a direct impact on the plaintiff's absence from work. Otherwise, the dismissal for absenteeism is legal (Resolution of the Supreme Court of November 27, 2024 in case No. 552/7015/22). ➔ Dismissal on the grounds of termination of the official's powers: when is it not necessary to pay severance pay? Art. 44 of the Labor Code of Ukraine stipulates that upon dismissal under clause 5 of part 1 of Art. 41 of the Labor Code of Ukraine, namely in connection with the termination of the powers of an official, an employee is required to be paid severance pay in the amount of not less than six months' average earnings. However, if the individual continues to perform duties in the same position, the right to such payment does not arise. For example, in case No. 202/3322/22, the employee claimed severance pay. However, the termination of his powers under clause 5, part 1, Article 41 of the Labor Code of Ukraine took place only pursuant to the decision of the supervisory board, and not for the purpose of dismissal. Thus, on the same day, the supervisory board decided to terminate the plaintiff's powers as chairman of the board and to re-elect him to the same position. In other words, if an employee is immediately reappointed to the same position after dismissal, no severance pay is due. In this case, there is no termination of employment, which precludes the right to such benefits. The Supreme Court has concluded that the purpose of severance pay is to provide financial support to the dismissed employee while he/she is looking for a new job, so the absence of such pay in this situation is legal (Resolution of the Supreme Court of 27 March 2024 in case No. 202/3322/22). ➔ Under what conditions is it legal to suspend an employment contract? During the period of martial law, a new mechanism was introduced into labor law - suspension of an employment contract. Article 13 of the Law of Ukraine “On the Organization of Labor Relations under Martial Law” sets out two mandatory conditions under which an employment contract may be suspended, namely if, due to armed aggression against Ukraine: ● the employer is unable to provide the employee with work; ● the employee is unable to perform his or her duties. This position was confirmed by the Supreme Court in case No. 933/411/22, stating that in order to apply this rule, the employer must be in circumstances where it is unable to provide the employee with work and the employee cannot perform it. At the same time, the Supreme Court emphasized that the employer's right to suspend is not absolute. The employer must provide evidence that it is in circumstances preventing it from offering work to the employee, particularly that it is impossible to arrange remote work or offer an alternative position. Having considered this case, the Supreme Court found that the employer's order to suspend the employment contract complied with the requirements of the law in its form and content, and the employer reasonably proved the impossibility of providing the employee with work (Resolution of the Supreme Court of 17 April 2024 in case No. 933/411/22). In another court case No. 243/442/23, the Supreme Court formulated a similar legal position and concluded that the suspension of the employee's employment contract was lawful, since: ● the psychiatric hospital, which was located in the vicinity of the combat zone, was shelled and the inpatient departments were not working, and therefore the employer was unable to provide the plaintiff, who was the head of the psychiatric department, with a job; ● the latter, in the absence of persons who receive psychiatric care in an inpatient setting, as well as medical staff in the department, was unable to perform her duties, and remote work for a psychiatrist in an inpatient psychiatric department was not feasible (Resolution of the Supreme Court of March 06, 2024 in case No. 243/442/23). ➔ Reduction of the notice period for dismissal An employee may request a reduction of the two-month notice period for impending dismissal. However, the submission of such an application by an employee does not relieve the employer of the obligation to offer the employee all vacancies. The absence of such an offer is a violation of the dismissal procedure. In the circumstances of case No. 641/1334/23, the employer offered the plaintiff only one vacancy, which required a change of residence. The plaintiff refused and filed an application for a shorter notice period. Subsequently, the employer did not offer any other vacancies, despite the fact that they existed, and granted the plaintiff's application. The Grand Chamber of the Supreme Court concluded that the reduction of the notice period is justified only when the employee refuses to continue working in any position.. Otherwise, there is a violation of labor guarantees by the employer. Thus, a reduction of the notice period is possible, but only to simplify the process, not to exempt from employment guarantees. If the employer fails to fulfill the obligation to offer all vacancies, the dismissal may be declared illegal (Resolution of the Supreme Court of Ukraine of August 28, 2024 in case No. 641/1334/23). ➔ Additional grounds for dismissal in the contract A contract is a special form of employment agreement and may impose greater responsibilities on the employee. This also applies to the grounds for termination of the contract. The Supreme Court has confirmed that contract terms that allow termination at the initiative of either party without additional conditions do not contradict the law. An employment agreement in the form of a contract may establish additional grounds for dismissal, even if they worsen the employee's position compared to the general norms of labor law (Resolution of the Supreme Court in case No. 521/965/23 of December 30, 2024). Importantly, a contract may be concluded only with certain categories of employees in cases explicitly provided for by law (e.g., with heads of enterprises and institutions, heads of educational institutions, etc.) ➔ Court fee for recovery of average earnings: Is It Required? Claimants in cases of wage recovery and reinstatement are exempt from paying court fees in accordance with paragraph 5 of part 1 of Article 5 of the Law of Ukraine “On Court Fees”. Based on the same provision, plaintiffs are exempted from paying court fees for filing a claim for recovery of average earnings for the period of forced absenteeism. The relevant position of the Grand Chamber of the Supreme Court is set out in the decision of February 08, 2022 in case No. 755/12623/19. However, in a similar case No. 638/14165/21, the Supreme Court collected a court fee from the plaintiff, referring to the decision of the Grand Chamber of the Supreme Court of January 30, 2019 in case No. 910/4518/16, misinterpreting its content. After all, the Grand Chamber's resolution states that the court fee is paid for the recovery of average earnings for the delay in severance pay, and not for the period of forced absenteeism. In case No. 638/14165/21, the Supreme Court confirmed that the average earnings for the period of forced absenteeism and for the delay in severance pay are different in legal nature. The former is the salary that an employee is entitled to receive due to unlawful dismissal, while the latter is a type of employer liability. The Supreme Court did not take these differences into account, which is contrary to the law and the conclusions of the Grand Chamber of the Supreme Court (Resolution of the Supreme Court of October 02, 2024 in case No. 638/14165/21). Thus, both parties to a labor dispute now have many effective tools for their defense, which only need to be applied in a timely and correct manner. Authors: Kateryna Tsvetkova, Partner, Litigation and Dispute Resolution practice at GOLAW, Attorney at law; Natalia Matviichuk, Senior Associate at Litigation and Dispute Resolution practice at GOLAW, Attorney at law.

Despite the war, energy remains one of the most attractive industries for investors: in 2024 it provided 21% of the total income of the economy. This stimulates activity in the M&A market, where complex transactions require comprehensive legal support. 1. General stages Given the complexity of M&A transactions in the energy sector, legal support should cover all key stages: from structuring the transaction to its integration and protecting the interests of the parties. Structuring involves determining the optimal form of the transaction: the purchase of shares or assets, merger or accession, taking into account legal, tax, financial and regulatory aspects. The main goal at this stage is to minimise risks and ensure the achievement of the strategic goals of the parties. Financial structuring includes analysis of sources of financing (own funds, credit resources, attracted investments) and preparation of relevant documentation, in particular credit agreements, pledge agreements, suretyships, and bank guarantees. Tax structuring involves developing an efficient tax model in compliance with domestic laws and international standards, aimed at minimising tax liabilities and avoiding adverse fiscal risks for the parties. Where appropriate, a special purpose vehicle (SPV) is incorporated to execute the transaction. This approach may isolate risks, streamline financing, and optimise the tax burden. At this stage, legal support includes SPV incorporation, drafting and negotiating constitutional documents, ownership structure, etc. Legal counsel facilitates negotiations between the parties, protecting the client’s interests and securing favourable terms, particularly with regard to financing, guarantees and warranties, asset transfer, and risk allocation. Typically, the negotiation process begins with the signing of a Letter of Intent or Term Sheet between the parties, which defines the main terms of the potential transaction and the steps to be taken by each of the parties in preparation for the sale. A fundamental stage of the process is legal due diligence, a comprehensive review of the target’s legal standing, encumbrances, ongoing litigation, licensing, land, environmental and technical risks, among others. The findings of the due diligence are critical for the final decision on the transaction. In parallel, pre-sale restructuring may take place — optimisation of the corporate structure, debt restructuring, spin-offs or business consolidations, dispute resolution, and other risk mitigation measures — all aimed at enhancing the attractiveness of the target. Taking into account the chosen structure and the results of the legal due diligence, an appropriate package of legal documentation is prepared, including sale and purchase agreements, shareholders agreements, security agreements, as well as supporting documents. The accuracy of the documentation and its legal “cleanliness” are crucial for the safety of the transaction. Regulatory interaction includes obtaining merger clearance from the Antimonopoly Committee, licenses for relevant activities, grid connection specifications, construction permits, and other approvals. Due to sector-specific regulatory requirements, engagement with state authorities is often decisive for a successful deal. The final stage is the execution of the transaction — signing of all documents based on agreed commercial, legal and financial terms, and completion of pre-closing obligations (closing). In case of disputes or conflicts arising post-closing, the legal team ensures protection of the client’s interests, provides legal support in negotiations, represents the client in court proceedings, and implements measures to minimise potential losses. 2. Key risks The process of concluding M&A transactions in the energy sector involves a number of risks that can significantly affect the success and implementation of the deal. One of the key challenges is strategic risk, which arises from misaligned deal objectives or the lack of a clear vision for future integration. Parties often overestimate the potential value of the business without having a realistic plan for merging operational activities, which complicates the realization of expected synergies after the transaction is closed. Regulatory risk poses a major threat. The energy sector is one of the most highly regulated industries; legislative changes, licensing complexity, or misinterpretation of regulatory requirements may delay or even block the transaction. Breaches of licensing, antitrust or environmental rules may result in administrative penalties and reputational damage. Financial risks are also critical. Inaccurate valuation of assets and obligations may lead to substantial losses. Often, after the conclusion of the transaction, previously unaccounted debts or infrastructure modernisation costs are revealed, which increases the total cost of investment and changes the financial model of the project. In addition, in order to successfully raise financing, the project must demonstrate the ability in the long term to generate a stable income sufficient to cover both operating expenses and loan servicing. Tax risks are a serious concern. Given the complexity and variability of tax laws, inefficient structuring of M&A transactions may cause significant tax obligations or claims from regulatory authorities. In the case of cross-border agreements, tax problems may increase due to the lack of harmonization of tax regimes of different jurisdictions. Environmental and technical risks form a separate category, especially regarding compliance with Environmental Impact Assessment (EIA) procedures. Energy projects — such as construction or refurbishment of power plants, oil and gas pipelines — may require EIA processing. Non-compliance may result in construction permit revocation, project suspension, or even administrative or criminal liability. Title risks regarding real estate and land use are also critical. Violations in land acquisition or zoning regulations may lead to loss of ownership or use rights, making project implementation impossible. Lastly, organisational risk cannot be overlooked. Lack of transparent ownership, shareholder conflicts, or flawed corporate governance may not only hinder deal execution but also endanger post-deal operations. 3. Additional Considerations Legal support for energy M&A goes beyond classic stages such as structuring, due diligence, and contract drafting. Sector specifics require thorough analysis of additional aspects critical to post-deal integration, governance, and asset value preservation. One such aspect is intellectual property. In modern energy business — especially renewables, digital solutions, and smart grid technologies — IP rights are vital. Legal audit of patents, trademarks, proprietary technology, licence agreements, and know-how helps identify potential risks of IP loss or infringement. Proper IP transfer arrangements, confidentiality safeguards, and protection against information leakage are indispensable. Cybersecurity has also become an issue. With growing reliance on digital infrastructure, cyberattacks, data breaches, or IT failures may cause severe disruption. Legal due diligence should include an IT infrastructure audit and compliance with data protection laws (e.g., GDPR or local regulations). Amid today’s challenges, political and social risks demand special attention. Government policies, tariff regulation, access to state support — or conversely, new restrictions — may determine the transaction’s viability. Under martial law, where regulation evolves rapidly, long-term projections are highly uncertain. Accounting for these factors during structuring and evaluation helps adapt the deal model and improve resilience. Legal support in energy M&A extends far beyond conventional legal tasks. It spans economic, technical, regulatory, and organisational domains, requiring deep cross-disciplinary expertise and strategic insight. This comprehensive approach not only mitigates risks but also delivers real added value for all parties involved. Author: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A Practice at GOLAW, Attorney at Law

Cybersecurity is becoming one of the top priorities for any country. This issue is particularly acute in Ukraine, which is in an active phase of war, as Ukraine's critical infrastructure, networks, registries, and archives are constantly under threat from cyber-attacks. In an effort to avoid a “Zero Day” scenario, the Ukrainian government has made several strategic decisions related to relocating data centres outside Ukraine, utilizing cloud services, and ensuring data protection. As a result, the cloud services market in Ukraine is undergoing rapid development, creating vast opportunities for global providers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. At the same time, the law requires potential providers to comply with specific regulatory requirements and standards to ensure security for Ukrainians.   Transition period and recent changes Due to the Russian invasion, the legal process for cloud service provider registration was temporarily suspended, making it impossible to complete registration as certain requirements and mandatory document formats had not been approved. However, on February 11, 2025, the Cabinet of Ministers of Ukraine adopted Resolution No. 154, "Certain Issues Regarding the Provision and Use of Cloud Services and/or Data Processing Centre Services", which addressed existing legal gaps, introduced a transition period, and structured the registration procedure for cloud service providers. This resolution has now made it possible to officially register as a cloud service provider. Until December 31, 2025, government institutions can still procure cloud services from companies that have not yet been registered. However, after the transition period ends, registration will become mandatory for working with government agencies and critical infrastructure facilities.   What is the regulatory framework for cloud service provider registration in Ukraine? Ukraine has enacted the Law "On Cloud Services" which regulates the activities of cloud service providers. In order to have access to public procurement and provide services to critical infrastructure, you need to be included in the register of cloud service providers. The registration process requires submission of the following documents: an application for inclusion in the list of cloud service providers: the form for submitting such an application is already published by the State Service of Special Communications and Information Protection in Ukraine (SSSCIP); documents confirming compliance with information protection legislation: requires the development of a complex data protection system (CDPS) and expertise carried out by SSSCIP. The form for requesting such expertise is already established. The expertise may take up to 6 months; a personal data processing policy: an internal document that may be developed by the company or qualified legal advisor; proof of ownership or usage rights over the technical infrastructure: internal documents that may include lease agreements for premises and equipment, statements from the registers, etc; a compliance certificate issued by a conformity assessment body in Ukraine: obtaining such certificate requires an expertise carried out by the Certification Authority Body of the State Scientific and Research Institute of Cybersecurity Technologies and Information Protection. The expertise may take up to 6 months.   What are the security and technical compliance requirements for registered cloud service providers? In order to legally operate in the Ukrainian cloud services market, providers must: use only technical resources that do not belong to entities on the sanctions list and are not located in aggressor states; implement information security management systems in accordance with international standards such as ISO/IEC 27001 and ISO/IEC 27018; conduct monitoring, audits, and ensure an immediate response to cybersecurity incidents while informing CERT-UA about significant incidents; regularly train personnel on cybersecurity standards and data protection measures.   Benefits for Global Cloud Service Providers Registering as a cloud service provider in Ukraine opens significant opportunities for providers. After registration, a company gains the right to provide services to government agencies and critical infrastructure enterprises. We believe that in the beginning of 2026 only few companies will be included in the register of cloud service providers. As a result, registration as a cloud service provider will provide a serious competitive advantage during the first half of 2026, enabling the company to establish a strong position in the Ukrainian market. In fact, the resolution has created the preconditions for a first-mover advantage in this area. Also, for conservative private entities holding official status strengthens a company's reputation as a reliable partner.   Conclusions The Ukrainian cloud services market presents promising opportunities for global providers, particularly in the context of digitalizing public services and the rapid growth of the IT sector. However, to operate effectively, companies must comply with Ukrainian legislation, particularly regarding registration, cybersecurity, and infrastructure localization. Since the registration procedure will take from 6 to 12 months under favourable circumstances, we are convinced that work in this area should begin immediately. Companies that adapt to the new regulations in a timely manner will gain significant competitive advantages and secure a foothold in one of the most dynamic markets in Eastern Europe. Authors: Oleksandr Melnyk, Partner, Head of Corporate Law and M&A Practice at GOLAW, Attorney at Law Nazarii Zeliak, Associate at Corporate Law and M&A Practice at GOLAW Vladyslava Zaichko, Paralegal at Corporate Law and M&A Practice at GOLAW

Every year, millions of cases are filed with the courts. Last year their number was over 5 million, which indicates a large number of people who are forced to defend their rights in court. In such cases, seeking professional legal assistance from lawyers is a common practice. At the same time, the parties to the dispute have a natural question: “Why should I have to pay for legal assistance if I am not the one violating rights and interests?” This is a logical question, and that is why the law provides for the possibility of reimbursement of such expenses in case of a favorable resolution of the case for the party. However, in practice, the procedure for expenses reimbursement  often conceals a number of problems, as courts usually only partially reimburse expenses. Why is it not always possible to reimburse the costs of legal assistance? Courts may refuse or reduce the amount of reimbursement based on various factors: unreasonableness of expenses and lack of evidence: if a party fails to properly prove the connection between the expenses incurred and the litigation, the court may decide that the expenses were not directly related to the case; disproportionality of the legal fees: in the court's opinion, the claimed amount of legal fees may not correspond to the complexity of the case, the time spent by the lawyer on the case or the value of the case for the parties involved; partial satisfaction of the claim: if the claim is only partially upheld, the legal costs are reimbursed proportionally to the successful part of the claim; Improper conduct by f the party: if the court believes that the party delayed the process, abused its rights, filed excessive or unreasonable motions, it may reduce the amount of compensation; court discretion : the court independently assess whether the claimed expenses are necessary and reasonable. As a result, even in very similar cases, the amount of costs to be recovered may vary greatly. Given the above, most lawyers before taking on a case inform their clients about the risks of the court refusing or reducing the claimed amount of expenses for professional legal assistance. However, practice shows that proper substantiation of the claimed expenses increases the chances of receiving compensation. Criteria to be considered by the court when deciding on reimbursement When determining the reasonableness of expenses, the court takes into account: whether the costs were directly related to the consideration of the case; whether the costs correspond to the complexity of the case and the value of the claim; whether the expenses are proportionate to the amount of work performed by the attorney and the importance of the case for the party. Not all expenses will be recognized by the court as necessary. For example, the current case law shows that courts do not recognize as legal assistance the meetings of an attorney with a client, coordination of procedural documents, the time spent by an attorney for travelling to court, the preparation of an application for recovery of expenses for professional legal assistance, etc. In other words, the court may deduct the specified scope of work and services of a lawyer from the amount of legal fees claimed by a party. How to avoid a reduction in compensation? In order to avoid a reduction in the  compensation amount , it is necessary to: provide a detailed report on all incurred expenses (contracts, acts and descriptions of work performed, invoices, payment instructions); prove that the expenses are related to the litigation; justify the amount of expenses in accordance with the complexity of the case; show that the expenses were reasonable and unavoidable. The court pays particular attention to the behavior of the parties during the proceedings. If one party has delayed the proceedings, filed unfounded motions or deliberately complicated the process, this may affect the decision on the compensation of costs. The Supreme Court has repeatedly emphasized that reimbursement of legal assistance costs is not automatic. Even if the court rules in favor of a party, it may partially or completely refuse to reimburse costs. The European Court of Human Rights also stresses that when determining the amount of compensation, the court must proceed from the following criteria: the reality of the attorney's fees, the reasonableness of their amount, based on the specific circumstances of the case and the financial situation of the parties. This opinion is illustrated, in particular, in the ECHR judgment on the case of East/west Alliance Limited v. Ukraine. What the amounts for legal assistance are typically awarded  by the court? As a rule, the courts are reluctant to award amounts exceeding UAH 30,000, although there are always exceptions to the “rules”. For example, in case No. 910/4881/18, the Supreme Court upheld the decisions of the previous instances and ordered the defendant to reimburse the plaintiff UAH 337,665.08 of legal assistance costs. In case No. 910/9668/23, the Commercial Court of Kyiv awarded the party the compensation of UAH 100,000.00 out of the UAH 316,000.00 claimed  . The decision was upheld on appeal. By an additional Ruling of the South-Western Commercial Court of Appeal in case No. 916/1618/20, the court awarded UAH 200,000.00 of legal costs in favor of the applicant. In case No. 924/866/21, the court of first instance recovered UAH 464,290.85 of professional legal assistance costs in favor of the plaintiff. However, when reviewing such a decision, the North-Western Commercial Court of Appeal reduced this amount to UAH 176,088.48, which remained unchanged after the cassation review. GOLAW attorneys also received a number of favorable decisions for their clients. In particular, in case No. 910/11809/24, the court decided to compensate the plaintiff UAH 50,000, and in case No. 910/11813/24, the court ordered the defendant to pay UAH 230,850 of professional legal assistance costs. Conclusions It is entirely possible to impose the costs of legal assistance to the opposing party but full reimbursement is not guaranteed. The court assesses the justification, proportionality and actual necessity of the claimed expenses and determines the amount to be recovered based on its own discretion. Proper documentation and justification significantly increase the chances of a favorable decision. Case law shows that reimbursements exceeding UAH 30,000 are achievable. Overall, while courts tend to limit compensation amounts, a careful approach to collecting evidence, properly substantiating  expenses and maintaining a consistent legal strategy can significantly increase the amount of compensation. Author: Anastasiia Klian, Counsel of Litigation and Dispute Resolution practice at GOLAW, Attorney at Law