Date of publication: 10 June 2026
Oleksandr Fefelov, Partner, Head of Antitrust and Competition Practice
Anastasiia Leontieva, Lawyer
Source: Chambers
Despite wartime risks, the M&A market in Ukraine has adapted. Transactions have shifted focus from expansion to liquidity preservation, debt restructuring, and risk mitigation, requiring precise legal structuring.
How does Ukrainian legislation define investments?
The Law of Ukraine “On Investment Activity” interprets investments broadly, ranging from cash and shares to property and intellectual property rights. Formally, the Law “On the Regime of Foreign Investment” guarantees non-residents national treatment and repatriation of profits.
However, the primary pitfall today is the National Bank of Ukraine’s (NBU) stringent restrictions on capital movement and the repatriation of dividends abroad. Failing to account for these active resolutions risks locking the investor’s profits inside the country.
Risks of Purchasing Corporate Rights in Ukraine
The purchase and sale of corporate rights remains the most common instrument for M&A transactions in Ukraine.
- The right of first refusal (pre-emptive right) of participants in a limited liability company (LLC) to acquire a share is one of the most problematic links when structuring transactions: the buyer is obliged to ensure that all participants have either granted consent or waived their pre-emptive right in accordance with the established procedure. Violation of this mechanism provides grounds for challenging the transaction in court. In practice, sellers often resort to “technical” waivers executed in violation of deadlines or without proper notification, and such waivers subsequently become the basis for lawsuits by other participants.
- Threshold rule for joint-stock companies (JSC): the acquisition of a stake of 25%, 50%, or 75% of shares in a public JSC requires a mandatory public tender offer under the rules of the Law “On Joint-Stock Companies” and regulations of the National Securities and Stock Market Commission (NSSMC). Ignoring this obligation entails not only regulatory sanctions but also the risk of the transaction being declared invalid.
- Due diligence under martial law: state registers, such as the Unified State Register (USR), the State Register of Rights to Real Estate (SRRRE), the Register of Encumbrances on Movable Property, the Unified Register of Debtors, and the Unified State Register of Court Decisions (USRCD), are functional and provide up-to-date information; however, under martial law, access to certain data is restricted.
Specifics of Due Diligence Under Martial Law
- Physical condition of the asset. The absence of legal encumbrances according to register data does not imply its real investment viability. Real estate near the front line or in temporarily occupied territories may have properly registered ownership and no encumbrances, while being physically destroyed or inaccessible for use.
- Ultimate Beneficial Owner (UBO). The USR contains information on the ultimate beneficial owner; however, verification of actual control through multi-tiered offshore structures falls outside the capabilities of the register and requires a separate corporate investigation.
- Force majeure certificates issued by the Chamber of Commerce and Industry of Ukraine. The target company could have obtained such certificates to exit contractual obligations with counterparties. A buyer who fails to verify this enters the transaction without understanding the actual state of the contract portfolio and potential lawsuits.
Any M&A transaction in Ukraine requires mandatory antitrust clearance at the structuring stage. The Law of Ukraine “On the Protection of Economic Competition” establishes thresholds above which concentration participants are required to obtain prior merger clearance from the Antimonopoly Committee of Ukraine (AMCU). Concluding a transaction prior to obtaining such clearance means knowingly accepting the risk of its invalidity and substantial fines.
Separately, situations must be considered where a transaction is not a concentration in the formal sense but involves concerted actions between undertakings – for instance, joint asset management, market allocation, or price policy coordination. Such agreements also fall under the AMCU authorization procedure. The legal analysis of a transaction must include not only corporate review but also antitrust review, and, if necessary, factor into the transaction timeline the period required for the Committee to review the application.
Sanctioned Assets as an Investment Object
One of the most notable trends in recent years has been the formation of a market for sanctioned assets. Following the 2022 full-scale invasion, the Law of Ukraine “On Sanctions” acquired a new dimension: the assets of individuals included in sanction lists are subject to seizure within criminal proceedings, and prospectively to confiscation or forced management, as well as forfeiture to state revenue by decision of the High Anti-Corruption Court (HACC).
The Law of Ukraine “On basic principles o f compulsory seizure of property rights of the Russian Federation and its residents” established a mechanism for the compulsory alienation of property belonging to the aggressor state and affiliated entities, while the Asset Recovery and Management Agency (ARMA) received expanded powers to manage the transferred property.
An investor considering such an asset faces non-standard due diligence: it is insufficient to verify merely the history of the asset’s title transfer – it is also necessary to establish whether it is under arrest, under ARMA management, or subject to forfeiture or confiscation proceedings under sanctions legislation.
An additional risk is that the asset may be clean according to Ukrainian registers but affiliated with a person on the OFAC or EU lists; in this case, no international bank will finance the transaction, and the foreign buyer will face compliance blocks under the law of their own jurisdiction.
Privatization in Ukraine
In parallel, the classical privatization track continues to function. Ukraine has introduced a modern privatization model via electronic auctions on the Prozorro.Sale platform, which fundamentally increased transparency and competition among buyers.
The law distinguishes between large-scale privatization (enterprises with a book value exceeding UAH 250 million) and small-scale privatization (all other objects). Calculations by the State Property Fund of Ukraine confirm its efficiency: in 2024, state budget revenues from privatization reached UAH 9.9 billion – 3.1 times more than in 2023.
Importantly for investors: the auction winner frequently encounters unforeseen circumstances after signing the minutes. Objects put up for a symbolic price or without book value often have accumulated debts to creditors, tax arrears, or unresolved land relations, as well as significant outstanding wage debts and unfulfilled environmental obligations. The Law “On Privatization” does not provide for the automatic clearing of such liabilities – they are inherited by the buyer if the transaction is structured as the acquisition of an enterprise as a property complex, rather than corporate rights.
Current Market State
According to KPMG data, in the first half of 2025, the technology sector accounted for 27% of the number of M&A transactions, while the agricultural sector accounted for nearly 50% of their value. Local investors generated more than half of the market volume: USD 367 million across 25 transactions.
However, the strategic value of Ukraine lies in institutional changes. EU candidate status accelerates the harmonization of corporate and competition legislation, reducing legal risks. Economic modernization is supported by the Ukraine Facility program (EUR 50 billion for 2024–2027), where up to EUR 40 billion in public and private investment is planned to be mobilized through the Ukraine Investment Framework. Furthermore, the European Flagship Fund for the Reconstruction of Ukraine is launching in 2026.
Estimates indicate that expenditures on the reconstruction of infrastructure, energy, and the defense industry will amount to USD 486 billion over a decade. As noted by the European Commissioner for Enlargement Marta Kos, Ukraine is becoming one of the most important investment destinations in Europe.
