Legal Business Blogs

Sponsored briefing: Ukraine – successful heir of the Soviet empire or a self-made kid on the block?

Being one of the most powerful industrial countries of the former USSR with a unique geographic location and the biggest territory in the heart of Europe, stretching from Europe in the West towards Russia in the East, Ukraine has entered the independence era with high expectations and significant industrial and scientific potential.

A robust logistics network, including a web of railway, connecting the most remote parts of the country, seaports, energy (including hydro and nuclear), unique defence and air-space companies, large agricultural companies – these are just a few sectors to mention, which have decisively shaped the future of the Ukrainian economy.

The first wave of privatisation of the 1990s made the first oligarchs, who strongly benefited out of the post-Soviet industrial potential and became the first desired clients of the young legal market.

International businesses started to explore Ukraine as the new promising business destination and soon were joined by their international banking institutions.

What has been keeping us busy in recent years and what has helped us to survive competition with global players?

The most recent corporate law reform has largely contributed to M&A deals starting to come back to Ukraine – just two to three years ago each and every significant deal was structured and governed by UK law and our transactional team had been working hand-in-hand on a daily basis with colleagues from major London law firms. The situation is changing and we see more and more clients starting to trust domestic corporate law, sticking, however, to international arbitration as an instrument for resolution of potential disputes.

Timur Bondaryev, Arzinger

‘Being one of the very few major jurisdictions, which has not introduced FDI screening, Ukraine remains one of the most accessible and open for foreign investments destinations in the world.’
Timur Bondaryev, Arzinger

The domestic M&A market has been recently very much driven by important structural reforms in the area of privatisation – the Ukrainian state remains the largest landlord in the country and shareholder of significant companies operating all across the industries – agriculture, hospitality, transport, energy (generation and transmission), infrastructure, manufacturing, banking and finance, etc. Therefore the declared privatisation sounded like an explosion of the nuclear bomb.

Privatisation was relaunched last year, when a number of significant assets from various sectors were unsealed for sale and the process has started with a trophy asset – a stunning hotel property situated in the very heart of Kyiv changing ownership and ending up in the hands of private investors. A number of alcohol manufacturing plants all across the country were the next to change hands and moving into private ownership. The list of state assets for sale is very impressive and we are very busy assisting our clients to prepare for the privatisations.

To make Ukrainian privatisation more attractive the bill was passed allowing UK law to govern the privatisation transactions, which obviously gives a lot of comfort to global investors.

PPP schemes are actively discussed and implemented to catch up with the growing ambitions of the country to upscale its outdated infrastructure and bring it to the highest international standards. The first concession deals have been closed and the pipeline is filled by a number of very interesting and attractive projects all over the country – airports, highways, sea and river ports, etc.

Being one of the very few major jurisdictions, which has not introduced FDI screening, Ukraine remains one of the most accessible and open for foreign investments destinations in the world. The situation seems, however, to be changing soon with the investment screening regime being actively pushed and it looks like respective law is about to be enacted already this year.

Very low thresholds of the Ukrainian merger control regime, catching even foreign-to-foreign transactions without significant local nexus and high level of bureaucracy of the local Agency, have been for many years the most significant regulatory hurdles for global transactions involving local assets. Last years the Agency has dramatically improved the handling process and most recently we have not faced any issues with regular filings.

Russian annexation of Crimea and hostilities in the Eastern part of Ukraine have dramatically changed the (investment) arbitration landscape – Ukraine as well as Ukrainian and international private and state-owned companies have popped up as parties of various complex disputes, this has boosted expansion of arbitration expertise and practice. We have significantly increased our international arbitration capacities and managed to raise our profile in the community of leading international disputes practitioners.

Investment arbitration has in the meanwhile developed as the very efficient investment protection tool, which gives our clients a unique opportunity to escalate their cases to the highest level – against this background we expect Ukraine to rapidly turn into one of the most litigious countries in the world, facing multiple investment treaty claims in the period of the next two to five years.

The claims of renewable investors, which have been taking in billions of dollars in recent years to develop the Ukrainian green energy sector and who were recently retrospectively deprived of the feed-in tariff, will significantly contribute to this trend.

Thanks to its powerful educational legacy, Ukraine has managed to evolve as a global IT development and support outsourcing destination with major high tech and companies of other sectors from all over the world entrusting Ukrainian IT engineers with development and support of their most sophisticated software solutions. More and more global companies have been switching to Ukraine to benefit from the cost-efficient and talented local engineering workforce. This trend was one of the significant triggers, contributing to the strengthening of IP and TMT expertise within large local firms. In recent years we have seen a number of significant transactions involving the Ukrainian IT sector and experts predict this sector will rapidly grow for several years in the light of global digitalisation trends and the influence of the pandemic.

For more information, please contact:

Timur Bondaryev

Founding and managing partner, Attorney-At-Law

Corporate and M&A, antitrust and competition, real estate and construction, energy, automotive


Arzinger Law Firm

Kyiv, Lviv, Odesa

Head Office

Senator Business Centre, 32/2 Moskovska street, Kyiv, Ukraine

T: +38 (044) 390 55 33