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Despite the Russia’s full-scale invasion, Ukraine offers a large consumer market, a highly educated and cost-competitive work force, and abundant natural resources. The government continues to advance legislation to capitalize on this potential with numerous corporate governance and other economic reform draft laws designed to bring Ukraine into compliance with EU standards and regulations currently moving forward. Ukraine’s increasing momentum toward integration with the EU offers potential opportunities for investors seeking to access the EU market. Additionally, Ukraine’s reconstruction is anticipated to attract hundreds of billions of dollars from governments, International Financial Institutions (IFIs), and the private sector. Corruption, especially in the judiciary, remains a challenge.

Many U.S. companies have found success in Ukraine, particularly in the agriculture, consumer goods, and technology sectors. Ukraine is an agricultural powerhouse and one of the world’s largest grain exporters despite Russia’s efforts to block grain exports. Ukraine has long had a skilled workforce in the IT service and software R&D sectors. The technology sector has grown over the last year even with Russia’s full-scale invasion of Ukraine.

The April 2019 election of President Zelenskyy raised hopes that Ukraine would make the breakthrough reforms necessary to unlock its vast economic potential. The government has worked to protect the gains of recent years and to implement many of the administration’s promises. Vested and corrupt interests, however, have resisted and even succeeded in rolling back some of the critical reforms enacted since the 2014 Revolution of Dignity. However, on March 4, 2023, the Cabinet of Ministers of Ukraine adopted the State Anti-Corruption Program for 2023-2025 that offers an action plan and timeline to reduce corruption.

Despite Ukraine’s potential, foreign direct investment (FDI) remains low. Russia’s intentional destruction of Ukrainian civilian infrastructure, occupation of a significant share of Ukrainian territory, fierce fighting on the frontlines, missile and drone attacks on civilians and civilian infrastructure throughout Ukraine, disruption of the workforce due to the invasion, unexploded ordnance contamination and other ecological consequences of the war pose challenges to new and existing investors. However, most areas of Ukraine are not on the frontlines. Highlighting the different risk perceptions of foreign investors in Ukraine with those outside the country, several existing foreign investors are making new direct investments of tens of millions of dollars each while investments by new investors are limited. Pre-existing problems with corruption and an unreliable judicial system persist, and Ukraine’s adoption of wartime currency controls and a fixed exchange rate regime has added new complications. Nevertheless, reconstruction and recovery offer significant potential opportunities, particularly for early moving investors with a high risk tolerance.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2022 116 of 180 
Global Innovation Index 2022 57 of 132 
U.S. FDI in partner country ($M USD, historical stock positions) 2021 $532 
World Bank GNI per capita 2021 $4,120 

Policies Toward Foreign Direct Investment

The government of Ukraine (GoU) actively seeks to attract FDI. In 2014, the GoU established the National Investment Council as a consultative and advisory body under the president, and in 2016 the Ukrainian government established an investment promotion office, UkraineInvest, with a mandate to attract and support FDI. UkraineInvest’s mission is to provide a one-stop shop for investors by helping them find and/or initiate a project and then guiding them through any necessary regulatory processes. As of February 2023, UkraineInvest supports 17 projects totaling USD 2.3 billion. UkraineInvest is also the primary point of contact for companies applying for tax and operational benefits under the December 2020 investment incentive law “On State Support of Investment Projects with Significant Investments”, that entered into force on February 13, 2021. A unique electronic platform, “Advantage Ukraine,” was created in 2022 to attract foreign investors to the Ukrainian economy. It is a GOU investment initiative, and it contains more than 500 investment projects and opportunities in 10 sectors of the economy.

The Business Ombudsman Council of Ukraine is as an advisory body under the Cabinet of Ministers that provides a forum for domestic or foreign businesses to file complaints about unjust treatment by government officials and state-owned enterprises. In June 2020, draft law #3607 “On the Establishment of the Business Ombudsman Institution in Ukraine” was registered, which would significantly expand the institution’s authorities to investigate complaints. In 2021 the bill was considered in a few Rada committees but didn’t move forward in 2022 due to the war.

Limits on Foreign Control and Right to Private Ownership and Establishment

The regulatory framework for the establishment and operation of businesses in Ukraine by foreign investors is generally similar to that for domestic investors. Registering a foreign investment is governed by the Law “On Foreign Investments” (1996), although according to the Law “On Amendments to Some Legislative Acts of Ukraine Regarding the Removal of Barriers to Attracting Foreign Investments” (2017), registration is not mandatory, and it was replaced by the requirement to submit information to the local authorities with the statistical purposes. Foreign investments registered before and after the entry into force of this Law have an equal right to receive benefits and guarantees provided for by the Law of Ukraine “On Foreign Investments”. These guarantees include the transfer of profits and income resulting from investment in Ukraine, the right to issue a permanent residence permit, a ban on nationalization, etc. Before registering their business, non-Ukrainian citizens must register with the Office of Immigration in the Ministry of Foreign Affairs and receive a taxpayer identification number through the State Fiscal Service. Legislation adopted in October 2019 reduced the cost of accreditation for foreign representative offices (excluding Russian businesses) from $2,500 to one minimum monthly wage (which in 2020 was approximately $180) and the timeframe from 60 to 20 days. The Ministry of Economy issues these accreditations.

Foreign and domestic private entities can engage in all forms of remunerative activity, with some exceptions: foreign companies are restricted from owning agricultural land, producing bioethanol, and some publishing activities. In addition, Ukrainian law authorizes the government to set limits on foreign participation in state-owned enterprises, although the definition of “foreign participation” is vague, and the law is rarely enforced. Certain critical infrastructure, especially in the energy sector, is precluded by law from private ownership and therefore not available to foreign investors. This includes the gas transmission system, electricity grids, and various plants and factories. While the authorities currently review merger and acquisition investments on competition grounds, the government is developing a mechanism for investment review on security grounds. On February 3, 2021, draft Law # 5011 “On Foreign Investments in Economic Entities of Strategic Importance for the National Security of Ukraine” was registered in the Parliament. If enacted, the bill is expected to introduce a system for assessing the impact of foreign investments on national interests and security of the state, but it didn’t move forward due to Russia’s full-scale invasion.

Other Investment Policy Reviews

The Organization for Economic Cooperation and Development (OECD) and the World Trade Organization (WTO) conducted formal reviews in 2016, that can be found at OECD: ; WTO: .

Business Facilitation

Ukraine has taken major steps to improve the ease of doing business over the past several years, helping it move up seven spots in the World Bank’s 2020 Doing Business Ranking from 71st place to 64th. This was Ukraine’s largest annual leap since 2014 and the highest ranking the country has ever received. Ukraine demonstrated improvements in six out of the ten indicators the World Bank assessed, scoring the highest in categories such as “starting a business” and “dealing with construction permits.” (Please note that in 2021 the World Bank retired its flagship Doing Business publication.)

All US companies surveyed in report by USAID, AmCham Ukraine, and the U.S. Department of Commerce released in April 2023: A New Ukraine: Catalyzing Investment in Freedom, Peace, and Prosperity, confirmed that they will continue business in Ukraine post war and 31% plan to increase investment. Companies mostly invested in Ukraine due to the size of its local market and available skilled labor force, but increasingly see EU accession as important to their businesses. The report can be found at: 

Private entrepreneurs and legal entities can register online via a State Electronic Services Portal “Diia” at . This e-application has accelerated the digital transformation of Ukraine via an online portal that opened digital access to 120 government services and enables Ukrainians to engage with their government online in a one-stop-shop – from applying for benefits and government programs to paying taxes, accessing important documents, registering and running businesses, and providing identification and digital signatures. Once a company is registered with the State Registrar (EDR), its data is transferred by the registrar to the relevant state authorities, such as the State Committee of Statistics of Ukraine, the State Pension Fund, State Tax Service, the Employment Insurance Fund, the Social Security Fund, and the Fund for Social Insurance.

Outward Investment

As of January of 2023, Ukraine’s investments in foreign countries totaled approximately $2.2 billion, according to data provided by the National Bank of Ukraine (NBU). Outward investment for legal entities and private entrepreneurs registered in Ukraine is capped at EUR 2 million ($2.2 million) per year.

Ukraine has signed more than 78 bilateral investment treaties, of which 66 are in effect. The Bilateral Investment Treaty between the United States and Ukraine has been in force since 1996. A list of Ukraine’s bilateral investment treaties can be found at .

Currently, Ukraine has 72 international bilateral tax treaties (agreements on avoidance of double taxation), the list of which can be found at the official Finance Ministry’s page: 
Two bilateral tax agreements, with Russian Federation and Republic of Belarus, were terminated in December 2022.

Ukraine also has 17 free trade agreements (FTAs) covering 47 countries; information on these treaties is available at .

On February 3, three weeks before Russia’s invasion, Ukraine signed an FTA with the Republic of Turkey, subject to ratification by the Ukrainian Parliament. In 2019 an agreement between the United States and Ukraine to facilitate reporting under the U.S. Foreign Account Tax Compliance Act (FATCA) entered into force. On December 1, 2019, Ukraine’s Law “On Ratification of Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (MLI)” became effective. Application of the MLI law combats abuse in bilateral tax treaties in a synchronized and efficient way by amending approximately 40 of Ukraine’s bilateral tax treaties.

The “Law on Amendments to the Tax Code,” entered partially into force in May 2020 and fully in January 2021. The legislation introduced changes to transfer pricing, tax depreciation and the deduction of certain types of expenses, withholding taxes and international taxation, taxation of permanent establishments, and rent payments for subsoil usage. The law is designed to apply international standards of tax control to all participants in international trade, to implement the BEPS provisions, and to improve the administration of taxes.

Transparency of the Regulatory System

Regulatory regimes in Ukraine are often outdated, contradictory, and burdensome, and feature a high degree of arbitrariness and favoritism in decisions by government officials, weak protection of property rights, and irregular payments. Since 2014, however, the country has been generally moving toward clearer rules and fair competition. Ukraine’s efforts to implement its EU Association Agreement, including the Deep and Comprehensive Free Trade Area (DCFTA), should continue to help boost overall transparency and legal certainty as Ukraine strives to establish legal and regulatory systems that are consistent with international norms.

The formulation of regulations falls solely under the purview of the government. In Ukraine there are no regulatory processes managed by non-governmental organizations or private sector associations. According to the Law “On the Principles of State Regulatory Policy in the Sphere of Economic Activity” (2004), the relevant ministry or regulatory agency is required to publish draft text of proposed regulations on its website for review and comment for at least one month but not more than three months. Along with the draft text, the governmental body must include a data-based assessment justifying the need for the regulation and analyzing its potential impact. The ministry or agency receives comments via its website, at public meetings, and through targeted outreach to stakeholders.  The comments received are generally not made public. At the end of the consultation period, the relevant ministry or regulator may publish the results on its website. Often, however, final draft legislative initiatives are not publicly available, or they reappear in dramatically different form. In 2020, the Ministry of Economy successfully launched an electronic platform on technical regulation ( ), on which it publicizes all draft regulatory measures, accepting public comments, and providing responses to those comments. Information on draft laws and existing legislation is available on the Rada (parliament) and Cabinet of Ministers websites.

Public finances and debt obligations are transparent. Budget documents and information on debt obligations are widely and easily accessible to the general public, including online. Budget documents provide a mostly full picture of the government’s planned expenditures and revenue streams. Information on debt obligations is publicly available and is published as part of the budget document on the Rada’s website. Information on the status of sovereign and guaranteed debt is published and updated on a monthly basis on the Finance Ministry’s website. Statistics are broken down by type of debt, type of creditor, and type of currency.

International Regulatory Considerations

Ukraine is not a member of the EU, but it is working to approximate many of its standards to meet EU requirements and facilitate access to EU markets. As Ukraine drafts laws, it often incorporates or references EU norms and standards. It also actively solicits and generally follows technical advice from the EU and the Venice Commission. Ukraine is a member of the WTO and a signatory to the WTO Trade Facilitation Agreement. The Ministry of Economy (MoE) is responsible for notifying all draft technical regulations to the WTO Committee on Technical Barriers to Trade. Despite occasional delays in submitting draft legislation to the WTO, Ukraine’s notification of draft texts to the WTO for comment has improved in the past few years.

Legal System and Judicial Independence

The legal system in Ukraine is based on a civil system of codified laws passed by its parliamentary body, the Rada. Contracts related to foreign investments fall within the jurisdiction of a system of specialized commercial courts. Generally, the Foreign Investment Law provides that a dispute between a foreign investor and the state of Ukraine must be settled in the Ukrainian courts, unless otherwise provided for by international treaties.

Courts of general jurisdiction are organized by territory and specialty and include: local courts; appellate courts; specialized high courts for civil, criminal, and corruption cases; and the Supreme Court. Commercial and contract law in Ukraine is codified in the Commercial Code and Civil Code. There is a three-tier system of specialized commercial courts with first and appellate instances and the Commercial Cassation Court of the Supreme Court as the highest instance. Local courts are either courts of general jurisdiction or specialized courts (i.e., commercial and administrative courts). Local commercial courts exercise jurisdiction over commercial and corporate disputes, while local administrative courts administer justice in legal disputes connected with state government and municipalities, with the exception of military disputes. Regulations and enforcement actions are subject to appeal with no exceptions within terms prescribed in procedural codes and are adjudicated in the national (general) court system.
The judicial system is independent of the executive branch; however, extensive corruption in the court system provides an opening for outside influence. Challenges within the Ukrainian judicial system include lack of capacity and resources, low salaries, as well as the existence of executive and prosecutorial influence on judges. The selection process for the High Qualifications Commission of Judges (HQCJ) was completed in June 2023 and the HQCJ will now begin filling over 2,500 judicial vacancies. In surveys of their members, two major business associations identified the lack of effectiveness and integrity in Ukraine’s judicial system as top impediments to greater investment in the country.

Laws and Regulations on Foreign Direct Investment

The Law on Investment Activity (1991) established the general principles for investment and was subsequently followed by additional legislative acts to facilitate foreign investment, most recently the law “On State Support of Investment Projects with Significant Investments” (2021) and subsequent amending legislation granting further tax and customs benefits for major investors. Due in part to conflicts in the body of laws that govern investment and commercial activity in Ukraine, and persistent issues with corruption, foreign investors have found it difficult to pursue cases in Ukrainian courts and often seek arbitration outside of the country. The website of Ukraine’s Investment Promotion Office ( provides relevant laws, rules, procedures, and reporting requirements for potential investors.

Competition and Anti-Trust Laws

The Antimonopoly Committee of Ukraine (AMCU) is the Ukrainian state authority for protection of economic competition. The AMCU is an independent state body with special status under the President of Ukraine, accountable to the Parliament. The AMCU’s functions include investigating and prosecuting anticompetitive conduct, reviewing and authorizing mergers and acquisitions, considering appeals of potential violations of public procurement, monitoring the state aid system, conducting competition advocacy within the government, formulating competition policy, and increasing international cooperation and coordination of competition policy and enforcement. In February 2021, the law on AMCU was amended to modify the AMCU’s review of public procurement complaints. In particular, the AMCU, rather than hear all appeals themselves, shall establish commissions to consider complaints on violations of the public procurement legislation composed of persons authorized to review public procurement complaints. In February 2023, the AMCU announced a competition to recruit commissioners to staff the public procurement appeals commissions. Additional draft legislation that seeks to further modernize Ukraine’s competition laws to align them with the EU, and also to provide the AMCU with additional powers and resources in order to better execute its mission, is under consideration this year. All the AMCU’s decisions can be appealed to Ukraine’s economic courts of first instance, and then to the central appellate court, and in some cases the Supreme Court.

Expropriation and Compensation

Current legislation permits legal expropriation of property in certain criminal proceedings or in cases of failure to fulfill investment obligations during privatization procedures. Additionally, the Law “On Legal Regime of Martial Law” (2015) and the Law “On Confiscation of Property During Legal Regime of Martial Law” (2013) allow voluntary or forced expropriations for military purposes with compensation to be provided either immediately or following cancellation of the “special regime/martial law.”

On March 3, 2022, the Rada adopted law #2116-IX on expropriation of Russian property in Ukraine. On March 7 it entered into force. The law defines the principles for the forced seizure in Ukraine of objects of property rights of the Russian Federation and its residents, the grounds and procedure for the forced seizure of objects of property rights, as well as the legal regime of objects forcibly seized in Ukraine. No compensation is provided in the case of Russian property in Ukraine. On May 12, 2022, the Rada adopted law # 2249-IX approving of the Presidential decree of Ukraine “About the decision of the National Security and Defense Council of Ukraine of May 11, 2022” on the seizure of Ukrainian property by the Russian Federation that nationalized Russian assets in Ukraine. The law does not clearly define who will identify Russian assets. The Prime Minister instructed the Ministry of Economy to make a list of property of the Russian Federation and its residents. The list is still being created, but some state bodies have begun to publicly announce seizures of Russian property.

In November 2022, the corporate rights of Ukrnafta, Ukrtatnafta, Motor Sich, AvtoKrAZ and Zaporizhzhiatransformator (ZTR), were seized “for the needs of the state” and transferred to the Ministry of Defense. The companies previously had been under the control of oligarchs, some of whom were accused of criminal activity, support for Russia, or both. The seizures were made under the “Law on the Transfer, Forced Alienation, or Seizure of Property under Martial Law or State of Emergency,” which obligates the state to return the seized assets to the owners or give them fair compensation. Ukrainian authorities emphasized that Ukraine needs these companies operating at full capacity to support the critical defense and energy sectors and this was a seizure of assets during martial law rather than a nationalization, and that, following the end of martial law, assets would either be returned to their owners or appropriate compensation paid.

In April, the Rada adopted changes to the law on the seizure of assets from Russian residents, also allowing property seizures from Ukrainian collaborators. However, the law has not yet been signed by the President. If this law goes into effect, the state could seize collaborators’ assets without any compensation and without unfairly expropriating bona fide minority shareholders who happened to own shares in the same companies.

Dispute Settlement

ICSID Convention and New York Convention

Ukraine is a Party to both the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) and the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. On October 20, 2015, the Government of Ukraine submitted a formal UN communication, noting that Ukraine’s ability to implement its obligations under the New York Convention in the occupied territories of Crimea, Donetsk, and Luhansk is limited and not guaranteed until Ukraine regains effective control from the Russian Federation. The full text of the communication is available at: C.N.597.2015.TREATIES-XXII.1 of 20 October 2015 .

The procedure for recognition and enforcement of foreign arbitral awards in Ukraine is regulated by the following legislative acts:

  • The Law on International Commercial Arbitration (ICAL, 1994). ICAL is almost a literal translation of the UNCITRAL Model Law.
  • The Code of Civil Procedure of Ukraine (CPC, 2004). Pursuant to Article 390 of the CPC, Ukrainian courts shall enforce foreign court decisions provided that: recognition and enforcement are stipulated under an international treaty ratified by the Rada; or on the basis of the reciprocity principle under an ad hoc agreement with a foreign country, whose court decision shall be enforced in Ukraine.

Investor-State Dispute Settlement

Many of Ukraine’s bilateral investment treaties recognize binding international arbitration of investment disputes. Claims under the Bilateral Investment Treaty (BIT) between the United States and Ukraine by American investors are rare. The Embassy only tracks disputes at the request of U.S. businesses or individuals involved in the case and cannot provide a comprehensive number for all investment disputes involving U.S. or other foreign investors in Ukraine. Such disputes in the past were a significant problem; however, in recent years the number of disputes decreased substantially. The Embassy is currently not tracking any investment disputes and is unaware of any cases pending in the International Center for Settlement of Investment Disputes in Washington, DC. In the last such case the ICSID Tribunal issued a procedural order taking note of the discontinuance of the proceeding in January 2022.

ICAL limits the jurisdiction of international arbitration tribunals to civil law disputes arising from international economic operations (provided that the commercial enterprise of at least one party exists outside of Ukraine), disputes between international organizations and enterprises with foreign investments in Ukraine, and intra-company disputes of these enterprises. ICAL does not address foreign arbitral awards issued against the government.

Extrajudicial action against foreign investors in the form of official acts of government (e.g., unwarranted inspections, investigations, fines) and illegitimate acts by private parties (e.g., corporate raiding) occur in Ukraine. The Ukrainian government has made it a stated priority to improve the business environment, end corporate raiding, and attract more foreign investment. In 2019, the Ukrainian Parliament passed legislation aimed to end corporate raidership: the Law “On Amendments to Certain Legislative Acts of Ukraine on Property Rights Protection,” and the Law “On Amendments to the Land Code of Ukraine and Other Legislative Acts on Counteracting Raiding.”

International Commercial Arbitration and Foreign Courts

The Law on Arbitration Courts (2004), last amended in November 2021, stipulates that parties can refer most of their commercial or civil law disputes to courts of arbitration, which are non-state bodies. Article 51 stipulates that awards of the aforementioned courts of arbitration are final, and Article 57 stipulates that they can be subject to mandatory enforcement via a competent state court.

Ukraine’s International Commercial Arbitration Court (ICAC) and the Maritime Arbitration Commission at the Ukrainian Chamber of Commerce and Industry are both annexed to the ICAL, which itself is a near-direct translation of the UNCITRAL model law. ICAL distributes the functions of arbitration assistance and supervision between the district courts and the President of the Chamber of Commerce and Industry of Ukraine for both ad hoc and institutional arbitrations. Local courts are obliged to recognize and enforce foreign arbitral awards under ICAL and the CPC, per Ukraine’s obligations under the ICSID and the New York Convention of 1958. However, the reliability, consistency, and timeliness of implementation are unknown.

Bankruptcy Regulations

In October 2019, a new Code of Bankruptcy Proceedings took effect, replacing bankruptcy law that had been in force since 1992. The new law strengthened creditors’ rights by allowing them to select their bankruptcy administrator, decide the starting prices of debtor assets at auction, and participate in other asset sales matters. The law also improved the procedures for selling debtors’ assets by introducing online auctions and removed a requirement for asset collection through courts or enforcement services before insolvency proceedings can begin, easing the debt collection process and reducing legal costs for creditors. The new bankruptcy code also provides additional protection of secured creditors.

Bankruptcy is not criminalized in Ukraine. The Criminal Code of Ukraine, however, does criminalize: 1) intentionally making an entity bankrupt and 2) distorting certain financial data to conceal the insolvency of a financial institution. In 2021, the Ukrainian Parliament passed in the first reading amendments to the Bankruptcy Code, aimed at strengthening the responsibility for untimely appeals to court and initiation of bankruptcy proceedings; resolving the issues of strengthening joint and subsidiary liability; approval of recovery plans; and changing procedures of state property sales. The bill is pending the second reading.

In August 2022, a draft bill amending the Bankruptcy Code in part of applying the bankruptcy procedures during the war time was passed in the first reading. The bill, among others, establishes a soft moratorium on the opening of bankruptcy cases during the war. In particular, the courts may refuse to open proceedings if debtor’s failure to fulfill his obligations is caused by military operations or if debtor’s production facilities are located at the temporary occupied territories or in war zones.

Investment Incentives

The GoU has made attracting investment a top priority. As part of this effort, in December 2020, the Rada passed the law “On State Support of Investment Projects with Significant Investments,” giving new financial and operational incentives to companies that invest at least EUR 20 million in one of a dozen predefined industries. The GoU will appoint a manager for qualifying investors who will help them communicate with the authorities and navigate government bureaucracy, permits, and regulations. The companies will also receive a number of tax and customs exemptions as well as favorable access to land and necessary infrastructure. UkraineInvest will take the lead on helping companies identify potential projects and signing an agreement with the GoU. More information is available at: . The agreement will permit investors to pursue international arbitration for violations of property rights. The government has also launched a program that offers loans to Ukrainian micro and small enterprises at discounted rates of five, seven, or nine percent.

Previous incentives, such as generous depreciation rates for most fixed assets, including property, plant, and equipment for investors, are still in place. Moreover, foreign investors remain exempt from customs duties for any in-kind contribution imported into Ukraine for the company’s charter fund. Some restrictions do apply and import duties must be paid if the enterprise sells, transfers, or otherwise disposes of the property. The government does not have a practice of jointly financing foreign direct investment projects, and the issuance of government guarantees is rare and subject to budgetary restrictions.

Foreign Trade Zones/Free Ports/Trade Facilitation

Ukraine does not currently maintain special or free economic zones. In 2020 and 2021 in an effort to attract foreign investments, the GOU and MPs initiated the creation of FTAs and registered a few related bills with the Ukrainian Parliament, which have not moved forward.

Performance and Data Localization Requirements

An employer may employ a foreign national as long as the employer has obtained a work permit for this person. The law “On Employment of the Population” sets forth the procedure for issuing work permits to foreigners. Authorities issue work permits on a case-by-case basis, for a particular applicant and a particular position in a company. A work permit is normally issued for the period of employment indicated in the employment contract, but for not more than one year. A work permit can be renewed for the same term, for an unlimited number of times, free of charge.

A foreign citizen with a valid work permit who spends more than 90 days within a 180-day period in Ukraine can obtain a temporary residence certificate. As of June 1, 2018, temporary residence certificates are now contactless electronic cards with biometric data. The new permits are generally issued for the term of an individual’s work permit. More information on applying for temporary residence certificate is available at: . There are also no age or nationality restrictions on who can be a manager or company director in the private sector.

Citizens of EU countries, the United States, Canada, Japan and some other countries do not require a visa to enter Ukraine for a stay of up to 90 days within a 180-day period. Individuals who are planning to get a temporary residence permit in Ukraine due to work must obtain a long-term type D visa. The list of countries and respective visa requirements are available on the website of the Ministry of Foreign Affairs of Ukraine . There are no reports from foreign investors and their employees of excessively onerous visa requirements inhibiting their mobility. Residence permits to Russian citizens are not being extended after Russia’s full-scale invasion on February 24.

Under Article II, clause 6 of the Bilateral Investment Treaty between the United States and Ukraine, neither Party shall impose performance requirements as a condition of establishment, expansion, or maintenance of investments, which require or enforce commitments to export goods produced, or which specify that goods or services must be purchased locally, or which impose any other similar requirements.

On July 14, 2022, amendments to the law “On Public Procurement” entered into force, establishing local content requirements in public procurement of urban transport, utility equipment, railway transport, aerospace products and energy engineering products by giving preference to domestic producers in government tenders if they can demonstrate at least 10 percent (40 percent by 2028) local content.  However, following consultations with the U.S. government, and consistent with Ukraine’s WTO commitments, the law exempts from the local content provisions those procurements subject to the WTO Government Procurement Agreement.

ON – IT related questions

Ukraine has no forced localization policies or requirements for foreign IT providers to turn over any source code or provide backdoors into hardware or software applications. Ukraine’s IT infrastructure and Internet Service Providers are largely unregulated. There are no legal measures preventing or impeding companies from transmitting business-related data outside of Ukraine. In the effort to bring its data storage and protection legislation into compliance with the requirements of the EU–Ukraine Association Agreement and with the EU’s General Data Protection Regulation (GDPR), draft law #8153 “On the Protection of Personal Data” was registered in the Parliament on October 25, 2022. The draft law provides for the processing of personal and sensitive information, as well as other specific types of data, establishes data subject rights and responsibilities for data controllers and operators, pertaining to the concept of Privacy by Design and requirements for the security of processing, registration with the relevant supervisory authority, and conducting Data Protection Impact Assessments (‘DPIAs’), among other things. It applies to both – the public and private sectors, as well as to the legislative bodies when adopting legal acts regulating the processing and security of personal data.

Real Property

Ukraine has a regulatory framework protecting property interests, as well as mortgages and liens. The record system is generally reliable and maintained by the Ministry of Justice. Still, judicial reform is needed to ensure efficient enforcement of property rights. On March 31, 2020, Ukraine’s parliament adopted a law lifting the moratorium on the sale of agricultural land, effective July 1, 2021, and established new regulations for the land market. The sale of state- and municipality-owned agricultural land will remain banned, meaning that in practice, the total initial market of land will be the 28 million hectares originally privatized in the 1990s. The law limits the purchase of land to individuals who are citizens of Ukraine until January 1, 2024; until that date, each Ukrainian citizen can buy up to 100 hectares of agricultural land. After January 1, 2024, Ukrainian legal entities (companies) will also be allowed to buy up to 10,000 hectares of land. The law establishes that a national referendum will be necessary to determine whether foreigners may purchase agricultural land in the future. Foreign nationals may lease land. The State Land Cadaster system has assessed that 27 percent of Ukraine’s 43.8 million hectares of agricultural land does not have a clear ownership title. The State Service of Ukraine for Geodesy, Cartography and Cadaster (StateGeoCadaster) and the Ministry of Justice are working to identify ownership of this land and reduce the untitled portion. Unoccupied property can become communal property only by court decision following a request from the local body authorized to manage real estate property. The request can only be made a year after the property was registered as unoccupied. Up to forty percent of Ukrainian land is estimated to be mined due to Russia’s invasion, complicating potential land use until the issue is resolved.

Intellectual Property Rights

Ukraine has a long history of inadequate enforcement and protection of intellectual property rights (IPR). Ukraine has been listed on the Priority Watch List in the U.S Trade Representative’s (USTR’s) Special 301 Report since 2015, due to the use of unlicensed software within the government, Internet piracy, and an inadequate system of collective management organizations (CMOs). The Special 301 review of Ukraine was suspended in 2022 in consideration of Russia’s “premeditated and unprovoked further invasion” of the country. The 2022 Special 301 Report does note that Ukraine has “engaged meaningfully” with the United States on areas of concern such as its system for collecting and distributing copyright royalties to right holders, the use of unlicensed software by government agencies and implementing better methods of combating widespread copyright infringement.

In June 2020, the Parliament of Ukraine adopted the Law of Ukraine No. 703 “On Amendments to Certain Legislative Acts of Ukraine Concerning the Establishment of a National Intellectual Property Authority” in force as of 14 October 2020, which introduced a two-tier structure of the state system of legal protection of intellectual property. The body responsible for granting rights and coordinating the national IP rights system is the Ukrainian Intellectual Property Institute (Ukrpatent), which performs the functions of the National Intellectual Property Office (NIPO), while the Ministry of Economy is responsible for ensuring the formation and implementation of state policy in the field of intellectual property. The NIPO is in charge of reviewing and issuancing patents and trademarks, training IPR examiners, hearing appeals on patent and trademark claims, and supporting the drafting of IPR policy and regulations.

In 2017, the President of Ukraine signed a Decree establishing the High Court of Intellectual Property in Kyiv. The creation of a specialized court aimed to: (1) resolve a range of intellectual property issues that have hindered the development of intellectual property relations and, (2) raise the standards of protection of the intellectual property rights in Ukraine. However, as of now, the selection of the judges has not been completed and the court is not operational.

The Cyber Police Department of the National Police has 831 highly qualified IT officers. Its Department for Combating Crimes in the Sphere of Illegal Content and Telecommunications (DCCSICT), that is focused on combatting online piracy, has 60 officers across Ukraine. In 2022, DCCSICT shut down 18 sites selling and distributing copyrighted materials and trademarked goods (11 for the violation of trademark rights and 7 for violation of copyrights and related rights). Russia’s invasion, along with a lack of resources and inadequate laws governing Ukraine’s notice and takedown system limited the effectiveness of the Cyber Police’s efforts in 2022.

In December 2020, the government of Ukraine finalized the selection process for the accreditation of collective management organizations (CMO). CMOs operated in six of eight spheres of musical works defined by the GoU until May 2022, when accreditations for CMOs managing broadcasting and public performance came to the end of the 3-year term stipulated in the law. Due to the extraordinary circumstances of Russia’s full-scale invasion the government suspended re-accreditation and instead amended a law “On Effective Management of Property Rights in the Sphere of Copyright and (or) the Related Rights” to allow non-accredited CMOs to collect royalties in the sphere of extended collective management (broadcasting and public performance of musical works) if in their catalogues CMOs had rights for respective musical works. The amended law requires the National Office of Intellectual Property and Innovation to perform re-accreditations of CMOs within 12 months after the end of martial law.

On January1, 2023 the new law “On Copyright and Related Rights” (“New Copyright Law”) took effect. With this legal update, Ukraine advances its stance on copyright and related rights law, implementing IP best practices on improving IP copyright protection and protection of related rights, and bringing it closer to being in line with EU regulations.

As noted in USTR’s 2020 Notorious Markets Report, the availability of counterfeit goods in both online and large physical marketplaces fell considerably in recent years (including 2022) due to decreased imports of counterfeit goods from China and other countries. As of December 31, 2022, the State Customs Service of Ukraine (SCS) has entered 830 intellectual property objects into the customs register at the request of the rightsholders. These included trademarks, industrial designs, inventions, copyright objects, and geographical indications. Customs inspectors of 11 customs offices passed 300 decisions on the suspension of customs clearance of goods suspected of IPR violations. Three protocols on violations of customs rules under Article 476 of the Criminal Code of Ukraine were filed; in 53 cases, counterfeit goods were destroyed under Article 401 of the Criminal Code; in 15 cases, smaller batches of counterfeit goods were destroyed.

Ukraine is a member of the World Intellectual Property Organization (WIPO) and is party to the Berne Convention, the Paris Convention, the Patent Cooperation Treaty, the WIPO Copyright Treaty, and the WIPO Performances and Phonograms Treaty. For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at .

Capital Markets and Portfolio Investment

The Ukrainian government encourages foreign portfolio investment in Ukraine, but Ukraine’s capital and commodity markets remain underdeveloped. Liquidity is limited and investors have few investment options. The financial market includes ten stock exchanges, a settlement center, two depositories, and a securities market regulator. Government bonds constitute 95 percent of trades. A few corporate securities are listed, but the volume of their trades is insignificant. With limited exceptions, only Ukrainian-licensed securities traders may handle securities transactions. In January 2020, China’s Bohai Commodity Exchange acquired a 49.9 percent stake in one of Ukraine’s leading stock exchanges, JSC PFTS Stock Exchange. The commodity market in Ukraine does not have a transparent regulatory framework.

The regulator of Ukraine’s capital market, the National Securities and Stock Market Commission, lacks financial and operational independence and is not a signatory to the Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information of the International Organization of Securities Commissions. Ukraine has been a member of the International Organization of Securities Commissions (IOSCO) since 1996. In February 2021, a new draft law “On the National Commission on Securities and Stock Exchanges” was registered in parliament and is pending consideration. The law would strengthen the independence and institutional capacity of the Securities Commission and facilitate compliance with IOSCO standards. Ukraine committed to adoption of the law as part of its IMF program. In November 2019, Ukraine adopted the so-called “Split” law to regulate the non-banking financial services sector. The law, which entered into force on July 1, 2020, transitions Ukraine from a sectoral regulatory model to an integrated model and lays the foundation for the full development of consumer rights protections and market conduct regulations in the financial markets. The law dissolved the National Commission for State Regulation of Financial Services Markets and divided its regulatory functions between the NBU and the National Securities and Stock Market Commission. The NBU now supervises and regulates the insurance market, leasing and factoring companies, credit unions, credit bureaus, pawnshops, and other financial companies, while the National Securities and Stock Market Commission regulates private funds, including pension funds, construction financing, and real estate transactions.

For many years, Ukrainian capital markets have struggled due to significant gaps and inconsistencies in the regulatory framework. In June 2020, parliament passed the law “On Amendments to Certain Laws Regarding Facilitating Investments and New Financial Instruments,” aimed at restarting Ukrainian capital markets. The law is intended to bring Ukrainian legislation in line with key provisions of EU laws on capital markets (MiFID II, MiFIR, EMIR, the Settlement Finality Directive, and the Financial Collateral Directive), create a framework for updated capital markets’ infrastructure, and regulate commodity markets and derivatives.

Credit is largely allocated on market terms, and foreign investors are able to get credit on the local market through a variety of credit instruments.

Money and Banking System

Ukraine’s banking sector continued to operate stably in 2022, despite the Russia’s invasion and attacks on energy infrastructure. Banks resumed their network operations in liberated regions, although the total number of branches in the country decreased. Financial institutions retained the trust of depositors and the sector’s liquidity overall remains high. In 2022, banks made efforts to meet operational challenges. The sector came through this period successfully and adapted to new working conditions.

The number of operating banks in Ukraine in 2022 decreased to 67 from 71 in 2021, as the NBU declared four banks insolvent. The share of state-owned banks increased by 3.9 percent over 2022, bringing their portion of the sector’s net assets to 50.6 percent. Net assets of solvent banks increased in volume by 17.9 percent in 2022.

Financial institutions accelerated the recognition of war-related loan losses. Overall, the share of non-performing loans (NPLs) grew to 38.1 percent from 27 percent as of the beginning of the war. The NPL ratio rose the most in the retail segment – by 13.6 percent yoy, while the ratio of
nonperforming corporate loans rose by 6.8 pp yoy. State-owned banks account for the biggest share of NPLs in the banking sector – 75 percent. Russia’s full-scale military invasion of Ukraine reversed the steady trend of NPL decrease, which has continued since 2018, and credit risk will continue to dominate the banks’ risk landscape.

Despite significant provisions, the sector made hryvnia (UAH) 24.7 billion ($658 million) in profits in 2022, including UAH 17.3 billion ($460 million) in Q4. Twenty-one institutions, including two state-owned banks, ended the year with losses, which amounted to UAH 20.8 billion ($554 million).

The liabilities of solvent banks exceeded the levels of 2021 by 18.8 percent. Client deposits remain the major source of funding for banks, replacing expensive refinancing loans. By the end of December, their share increased to 87.9 percent, while the share of NBU refinancing
loans shrunk to 1.8 percent and reached the level of September 2020.

Foreign-owned banks may carry out all activities conducted by domestic banks, and there are no restrictions on their participation in the banking system, including operating via subsidiaries. A foreign company can open a bank account in Ukraine for the purposes of investment operations; otherwise, it needs to register a representative office in Ukraine. A nonresident private person can open a bank account in Ukraine. A foreign investor may open an account in a bank operating in Ukraine and transfer in funds for further investment or invest directly into an account of a Ukrainian resident company.

Foreign Exchange and Remittances

Foreign Exchange

Noncash and cash foreign currency and investment metals are traded on the Ukrainian FX market. Banks, nonbank institutions, bank customers, and the NBU are FX market participants. The regulator trades on the FX market in order to smooth excessive fluctuations of the market and accumulate international reserves. The NBU calculates the official exchange rate of the hryvnia to foreign currencies and investment metals.

Currently the official UAH/USD exchange rate remains fixed. At the onset of the full-scale Russia’s invasions of Ukraine in February 2022, NBU fixed the national currency hryvnia’s exchange rate at UAH/USD 29.25 to ensure stable functioning of the financial system, with the following increase of the official exchange rate by 25 percent to 36.5686 as of July 21, 2022.

The NBU has taken urgent and decisive measures to stabilize the national economy and safeguard macroeconomic stability. The NBU adopted a resolution “On the Operation of the Banking System Under Martial Law” which imposed temporary restrictions on cross-border currency transactions, subject to certain exceptions, including payments for critical import goods as per the list set by the Cabinet of Ministers of Ukraine. In summer, the NBU lifted currency control restrictions on imports of goods and some services.

The restrictions remain in place concerning the transactions involving the movement of capital. Some exceptions include:

  • a bank’s own operations (except for providing loans to non-residents), though payments under documentary and reserve letters of credit/guarantees/counter-guarantees opened (confirmed and provided) from 24 February 2022 can be made only if they relate to transaction payments which are otherwise permitted (e.g., payments for imports of goods and service);
  • payments made by or to international financial institutions;
  • payments secured by a state guarantee;
  • payments made under a separate permit from the NBU.

The NBU also extended the settlement term for export-import operations from 120 to 180 days, and provided that from 11 July 2022, any purchased foreign currency must be used within two working days toward the purpose for which it was purchased. As of 25 July 2022, the NBU revoked a permit for commercial banks to purchase cash hryvnias from foreign financial institutions for cashless foreign currency. The NBU has also changed the algorithm for calculating the banks’ open FX position limits regarding non-inclusion of the increase in provisions for FX assets of banks. This will prevent possible artificial overstatement of FX loan loss allowances by banks in order to increase the FX purchases.

As of October 1, 2022, the NBU has doubled the monthly limit for the purchase of cashless foreign currency (from UAH 50,000 to UAH 100,000) by individuals for the purpose of placing three-month or longer-maturity deposits.

Remittance Policies

In 2021, the NBU doubled the limit for some retail foreign currency remittances, including for investment abroad or foreign deposits, to EUR 200,000 ($230,000) per year. As long as they comply with the limit, individuals are permitted to remit foreign currency (or the national currency hryvnia) abroad or to current accounts of corporate nonresidents in Ukraine. The transactions allowed include: investing abroad, depositing funds into one’s own accounts abroad, transferring funds under life insurance agreements, or making loans to nonresidents. In 2020, individuals transferred about EUR 274 million ($315 million) abroad. The NBU aims to completely remove the limit on international investments by individuals, subject to the full adoption and implementation of the BEPS legislation.

In February 2022, the NBU issued Resolution No. 18 “On the Operation of the Banking System Under Martial Law,” which introduced a moratorium on cross-border foreign currency payments, except for the banks’ own operations, including settlements with international payment systems; purchase of imported goods; payments by or to IFIs; payments ensuring mobilization plans (tasks); medical and transportation costs; payments under special permits by the NBU; and payments to diplomatic representations, consulates of Ukraine abroad.

In September 2022, NBU softened some of the restrictions and allowed Ukrainian legal entities to make interest payments under cross-border loans that became due and payable at any point between 24 February 2022 and 10 August 2022, under certain conditions. As of October 2022, the NBU has allowed businesses to transfer funds to accounts of their foreign units and branches under specific conditions.

At the same time, NBU also reintroduced some restrictions in October 2022. In particular, it reimposed a ban on the P2P transfers from hryvnia payment cards of Ukrainian banks to cards of foreign banks, except for educational, healthcare, and emergency transportation purposes.

Ukrainian companies are prohibited from purchasing foreign currency on the Ukrainian FX market for cross-border payments if they already have funds in the respective foreign currency available for making cross-border payments.

Sovereign Wealth Funds

Ukraine does not maintain or operate a sovereign wealth fund.

The Government of Ukraine operates 1,600 state-owned enterprises (SOEs) out of 3,358 registered SOEs, with an economic output of approximately ten percent of GDP. While the government lists 3,358 enterprises, more than 1,700 of them no longer operate as functioning businesses. SOEs in Ukraine are defined as companies in which the state owns at least 50-percent plus one share. SOEs are active in areas such as energy, machine-building, and infrastructure. Some of the companies have significant environmental problems, legacy legal issues, or oligarchs as minority owners.

There is no common public list of all SOEs in Ukraine and each ministry publishes a list of SOEs under its respective management. Before Russia’s invasion of Ukraine, the Ministry of Economic Development and Trade had periodically updated information on annual financial reports of significant SOEs (100 of the largest SOEs), which it published on the ministry website. 

Ukraine’s law on corporate governance requires SOEs to publicize annual financial reports and disclosures on official websites, including information on financial indicators, company officials, transactions, etc. The law also stipulates that SOEs publish their annual financial statements and audits, though a review of SOE financial statements and audits showed that SOEs did not rigorously adhere to the law. Since late 2019, some rollbacks of corporate governance protections at SOEs have been observed, especially in SOEs in the energy and infrastructure sectors, such as Naftogaz, Ukrenergo, and Energoatom.

Draft law #5593-d, which is intended to improve existing legislation on corporate governance of SOEs in Ukraine, was expected to be voted on in 2022 but has not moved forward. The current wording of the draft law #5593-d is not yet in full compliance with the OECD Guidelines on Corporate Governance of SOEs. However, no information has been available publicly on further progress with the draft law or steps to be taken. According to current wording of the draft law, the Cabinet of Ministers shall appoint and dismiss the CEOs of SOEs on the proposal of the SOE’s supervisory board. That is, the final decision on the appointment/dismissal of the CEO will remain under the Cabinet, which maintains its leverage over and room for political involvement in the respective SOEs. Under the updated IMF Memorandum, the Ukrainian authorities committed to adopt a law to further strengthen the SOE corporate governance framework by bringing it in line with the OECD Guidelines on Corporate Governance of SOEs, including by strengthening the accountability and broadening the powers of supervisory boards so they have the ultimate authority to appoint and dismiss CEOs. If improved and adopted, the law #5593-d will fundamentally strengthen the corporate governance framework for SOEs.

On 6 February 2023, the Rada passed Draft Law #8067 on the corporatization of the state nuclear power company Energoatom. It establishes the legal, economic, and organizational foundations to transform Energoatom from a (corporatized) state enterprise to a joint-stock company (JSC) to improve its efficiency and corporate governance. Establishing good corporate governance of SOEs is one of Ukraine’s obligations under the Association Agreement with the EU. Energoatom remains 100 percent state-owned, with the Cabinet of Ministers as its ownership entity. At the same time, the shares acquired by the state as a result of converting the company into a JSC are not subject to privatization, and it is also prohibited to divide the state-owned package of shares.

On 21 February 2023, the National Securities and Stock Market Commission (NSSMC) established a procedure for security issuers to disclose information on their ties with risk-zone countries, namely Russia, Belarus, Iran, and North Korea. The NSSMC’s new Decision mandates that security issuers (which include SOEs and state-owned banks registered as joint-stock companies) should submit this information to the NSSMC by 30 April 2023. The disclosure must include any material information on the company’s engagements with or in Russia and its satellites. Specifically, the disclosure should state whether:

  • the company’s owners include risk-zone countries’ citizens, residents, or legal entities;
  • the company’s governing bodies include risk-zone countries’ citizens or residents;
  • the company has any commercial relations with risk-zone countries’ counterparties, including legal entities controlled by risk-zone countries;
  • the company has any subsidiaries, branches, representative offices, or other units operating in risk-zone countries;
  • the company has any joint ventures with risk-zone countries’ citizens, residents, or legal entities;
  • the company has any equity stakes (shares) in a legal entity domiciled in or controlled by risk-zone countries; and
  • the company holds any securities other than shares of a legal entity domiciled in or controlled by risk-zone countries.

ISOE senior managers traditionally report directly to the ministry overseeing the relevant SOE’s area of expertise. Ukrainian law specifies that ministries are not permitted to interfere with the daily economic activities of an SOE, but numerous anecdotal reports indicate that ministries and vested interests ignore this restriction. The Cabinet of Ministers has the power to decide on the creation, reorganization, and liquidation of SOEs, and to adopt and enforce SOE charters. It can delegate this authority to the ministry charged with supervising the SOE. The Cabinet of Ministers may also delegate to ministries the permission to create joint ventures with state property and prepare proposals to divide state property between the national and municipal levels.

Most SOEs rely on government subsidies to function and cannot directly compete with private firms. Several SOEs capable of making a profit have already been privatized, and the result has been that the most inefficient firms have remained in government hands. The Ukrainian government continues to heavily subsidize state-owned enterprises (especially in the coal mining, rail transportation, gas, and communal heating sectors) and has sometimes paid outstanding debts of SOEs with sovereign loan guarantees. SOE access to extensions of tax payment deadlines remains nontransparent, especially where SOEs are directed to sell their products at below-market prices.

Privatization Program

Although not formally banned under martial law, the State Property Fund of Ukraine (SPFU) halted its work – particularly privatization and leasing – in February 2022. Needing to attract investments to survive the wartime economic crisis, President Zelenskyy announced privatization as a priority of his administration in spring of 2022. The Cabinet of Ministers in May simplified the leasing of state property during wartime – streamlining procedures, waiving some fees, and reducing review times. Since the relaunch of leasing auctions, over 500 auctions have leased out around three million square feet of state property, resulting in a monthly income of $147,000 to the state budget. In July, the Rada adopted law #7451 “On the Privatization of State and Community Property,” which removed barriers and significantly simplified privatization processes. As of December 31, the SPFU had held 193 small privatization auctions, bringing $60 million in expected revenues to the state budget.

Starting in 2019, Ukraine’s government has vowed to implement a series of major privatization reforms, including a dramatic reduction of the number of SOEs deemed strategic and exempt from sale. In October 2019, the government nullified legislation from 1999 banning the privatization of a lengthy list of state assets. On March 30, 2021, the Rada passed in its first reading a draft law establishing a list of 659 SOEs that are exempt from privatization. Included in the list are energy and defense companies, natural monopolies like the state railway and postal service, forestry facilities, and entities with social value in the culture, sports, science, and education sectors. In February 2020, as part of an effort to reform state-owned companies, the government started the legislative process to permit partial privatization of some previously excluded SOEs, including Naftogaz, MainGasPipelines of Ukraine, UkrTransGaz, UkrNafta, Ukrgasvydobuvannya, Ukrzaliznytsia, and UkrPoshta. The United States has provided significant technical assistance to Ukraine to support an open and transparent privatization process.

The State Property Fund oversees privatizations in Ukraine. The rules on privatization apply to foreign and domestic investors and, theoretically, establish a level playing field. However, observers have pointed to numerous instances in past privatizations where vested interests have influenced the process to fit a pre-selected bidder. Despite these concerns, the government has stated that there would be no revisions of past privatizations, but there are ongoing court cases wherein private companies are challenging earlier privatizations.

There is limited but growing awareness in Ukraine of internationally accepted standards for responsible business conduct, including corporate social responsibility. Primary drivers for the introduction of these standards have been Ukraine’s vibrant civil society, international companies and investors, and efforts by business associations such as the American Chamber of Commerce and the European Business Association. The government of Ukraine has put in place corporate governance standards to protect shareholders; however, these are voluntary.

In 2017, Ukraine became the 47th country to adhere to the OECD Declaration and Decisions on International Investment and Multinational Enterprises , which provides recommendations on responsible business conduct. Ukraine formally established its National Contact Point to promote these guidelines for Multinational Enterprises under the Ministry of Economy back in 2018, but it doesn’t seem operational now. On May 31, 2018, Ukraine adopted and agreed to support and monitor implementation of the OECD Due Diligence Guidance for Responsible Business Conduct. There are also independent NGOs, such Center for the Development of Corporate Social Responsibility, as well as investment funds, worker organizations and unions, and business associations promoting or monitoring responsible business conduct. There are no reported restrictions on their activities aimed at promoting responsible business conduct.

Ukraine has been a member of the Extractive Industries Transparency Initiative (EITI) since 2013. Participation by companies in Ukraine, however, remains voluntary. Ukraine has not joined the Voluntary Principles on Security and Human Rights.

Additional Resources 

Department of State

Department of Labor

Climate issues

Before Russia’s full-scale invasion in February 2022, Ukraine made important steps to build the environmental regulatory framework and ramp up efforts on national efforts on climate change mitigation. Ukraine’s updated Nationally Determined Contribution (NDC) was adopted in July 2021 and set a target to achieve an economy-wide net domestic reduction of 65 percent in greenhouse gas emissions by 2030 as compared to 1990 and reach climate neutrality by 2060. To achieve sustainable economic growth, Ukraine considered mitigation strategies such as cutting methane and nitrogen oxide from fossil fuel production, agriculture, and waste, and scaling up energy-saving technologies in the agricultural sector. The associated policy documents – in particular, Decree 179/2021 approving the National Economic Strategy until 2030 (2021) and Ukraine 2050 Low Emission Development Strategy (2017) – strive to decouple future economic and social growth from further greenhouse gas emissions. The Environmental Security and Climate Change Adaptation Strategy of Ukraine until 2030 adopted in 2021 is aimed at making Ukraine a more environmentally safe and climate-resilient country and facilitating the delivery of Ukraine’s international obligations under the Paris Agreement.

The beginning of the full-scale war in 2022, however, rendered most of Ukraine’s previous NDC implementation plans irrelevant. As a result, the concept for the implementation of state policy in the field of climate change up to 2030, accompanied by an action plan, for now remains outdated and does not reflect the new targets stemming from the updated NDC. Ukraine has not developed a national biodiversity strategy or a separate law on climate change yet.

Ukraine has recently proposed several pieces of legislation aimed at decreasing carbon emissions across various sectors.

The “Law on Highly Efficient Cogeneration” (adopted in February 2023, but not yet in force) aims to create incentives for the reconstruction of existing heat-generating facilities into highly efficient installations for the combined production of electricity and thermal energy in line with the principles and provisions of the EU acquis.

The State Agency on Energy Efficiency and Energy Saving developed a draft National Action Plan for the Development of Renewable Energy by 2030. The document, which has not been formally approved yet, stipulates that the share of renewable energy sources in the final gross energy consumption by 2030 should reach an average of 27 percent compared to 9 percent in 2020, including 25 percent in electricity, 35 percent in heating and cooling, and 14 percent in transport. To reach these goals Ukraine will require more than $21.6 billion in investments.

Guarantees of origin for electricity produced from renewable sources is an important legislative initiative to facilitate the development of the renewables sector. Effective guarantees of origin mechanism are expected to contribute to further development of renewable energy in Ukraine.
A recently adopted “Law on Use of Electric Vehicles” aims to support the development of electric vehicles and the infrastructure of electric vehicle charging stations.

The Concept of the State Target Program for the Development of the Agricultural Sector until 2022 (adopted in 2019, but loosely enforced) proposes to enhance biodiversity with incentives for conservation and sustainable land use and to implement measures to combat land degradation and desertification.

Promoting cleaner household energy, the 2017 “Law on Energy Efficiency Fund” established an Energy Efficiency Fund to introduce incentives and support measures for energy efficiency improvements and savings in buildings.

A carbon tax was introduced in 2011 to reduce greenhouse gas emissions. However, the current carbon tax rate of around $0.4 per ton of CO2 is virtually ineffective in strengthening energy efficiency or reducing carbon emissions. The carbon tax is seen more as a fiscal instrument to fill the State Budget of Ukraine, but the lack of proper accounting, interaction of public authorities, and control over pollution allowed eligible taxpayers to avoid paying the tax in past years. The country’s efforts to introduce a range of measures to achieve emission reduction goals call for a revision of Ukraine’s carbon pricing strategy.

The forest sector contributes around 1 percent of Ukraine’s GDP and provides nearly 200,000 jobs, in particular in the wood processing and furniture industries. The sector is heavily export-oriented, with roughly 50 percent of the timber production, mostly log wood and sawn wood, exported annually. Despite some positive changes prior to the full-scale war, environmental law enforcement remains limited, causing illegal logging and corruption. In the spring of 2022, the Ukrainian government allowed logging volumes to increase by more than 150 percent, including in protected forests, as part of an effort to boost export earnings and provide timber for the needs of the military. Environmental groups criticized this decision as it could lead to large-scale losses in areas where illegal logging and forest mismanagement were already common.

Ukraine joined the Greening Government Initiative (GGI) in 2021. Common areas of interest for GGI participants include activities such as increasing the government’s use of renewable energy, transitioning national government buildings and fleets to net-zero emissions, enhancing the resilience of government buildings, establishing sustainable procurement policies, and identifying nature-based solutions. However, there are no mandatory requirements to include environmental and green growth considerations in public procurement in Ukraine.

Ukraine has established a set of specialized anti-corruption institutions responsible for the full criminal justice process as it relates to grand corruption to replace the non-performing law enforcement and judicial systems, including the investigation, prosecution, and adjudication of high-profile corruption cases. Those agencies are the National Agency on Corruption Prevention (NACP), National Anti-Corruption Bureau (NABU), Specialized Anti-Corruption Prosecutor’s Office (SAPO), High Anti-Corruption Court (HACC), and Asset Recovery and Management Agency (ARMA). However, experience has shown that their effectiveness has greatly depended on the quality and integrity of the institution’s leader. The establishment of Ukraine’s anti-corruption system was completed in 2019 with the establishment of the last of the five specialized anti-corruption bodies, the HACC. Ukraine’s anti-corruption bodies have been persistently challenged by the lack of independently selected, permanent leadership, although things have recently improved. When the full-scale invasion seized Ukraine, just two-of-five institutions had independently selected leadership. As of May 2023, four-of-five do, with the lone exception being ARMA which has not had an independently selected head for more than three years. For all these bodies, successful institutional establishment and leadership selection often only happens because of strict international conditionality.

In June 2022, in bestowing candidate status to Ukraine, the European Union listed seven requirements for Ukraine to implement, five of which tackle the rule of law, before accession negotiations could proceed. These requirements include reforming the Constitutional Court, ensuring independently selected SAPO and NABU leadership, reform of Ukraine’s judicial governance bodies, and implementation of the anti-oligarch law to limit the excessive influence of oligarchs in economic, political, and public life, among others.

Similar requirements were mirrored by the IMF when concluding Program Monitoring with Board involvement (PMB) for Ukraine. In its MoU with the IMF Ukraine committed
to support the future work of the new SAPO head appointed in July 2022, reinforce the office with the onboarding of eight new and budgeted SAPO prosecutors by end-December 2022 and
to advance selection of the new NABU head involving independent experts with international experience and to appoint the new head by end-March 2023, following an open, transparent and competitive selection process. On March 31, 2023, the IMF announced an Extended Fund Facility lending program for Ukraine which included restoring asset declaration filing and strengthening SAPO institutional independence as key conditionalities.

March 6, 2023, based on the outcomes of the selection process the Cabinet of Ministers of Ukraine appointed the new NABU Head.

On March 4, 2023, the Cabinet of Ministers of Ukraine adopted the State Anti-Corruption Program for 2023-2025 as an implementation plan for the National Anti-Corruption Strategy for 2021-2025, adopted by parliament in June 2022. It offers an action plan and timeline for 1,700 actions and policy measures to reduce corruption and safeguard integrity across 15 areas. An online implementation tracker is to be launched to monitor implementation progress.

Despite a fully functional Agency for the Recovery and Management of Assets (ARMA), no effective system for tracking and reclaiming assets obtained through corruption has been set up. Ukraine is still due to organize transparent competition to select the head and safeguard the further institutional development of ARMA.

Asset declaration: Ukrainian public officials must file annual electronic declarations of their income and assets. The National Agency on Corruption Prevention (NACP) was established to collect, verify, and publish asset declarations. The system of electronic disclosure of assets and income of public officials is the most instrumental source of information to monitor the lifestyle of public officials. The information submitted there serves as the basis for official investigations into illicit enrichment and exposing corruption by journalists and civil society monitors. However, in early 2022 martial law temporarily lifted an obligation to file asset declarations by public servants for security reasons.

Ownership registries: Ukraine built state-of-the-art government databases revealing the ultimate beneficial owners of Ukrainian properties, vehicles, land, and legal entities. However, in early 2022 martial law temporarily restricted access to multiple ownership registers based on security concerns.

Public procurement: Following the full-scale invasion and throughout martial law, public tendering regulations were amended to introduce various limitations and conditionalities to the use of ProZorro, Ukraine’s award-winning electronic public procurement platform for the entire Ukrainian government to publicize procurement solicitations, share requests for proposals, and run auctions.

Integrating Ukraine’s anti-corruption achievements into its wartime and rebuilding processes will require using its world-class transparency systems like ProZorro, empowering the specialized anti-corruption bodies with needed resources and permanent leadership, and giving Ukraine’s vibrant civil society a prominent role in planning and overseeing the flow of funds.

November 5, 2021, President Zelenskyy signed law #5599 “On the Prevention of Threats to National Security Associated with the Excessive Influence of Persons of Significant Economic and Political Importance in Public Life (Oligarchs)” launching deoligarchization reform to curb their detrimental impact on economic, political, and public life. The law defines the term “oligarch” setting four criteria. Anyone meeting three of those criteria is to be designated an “oligarch” and included into the register of oligarchs subject to prohibitions. The register was due for a launch in April 2022, however timely implementation of the reform was impeded by the war. To cover for the delay, on February 24, 2023, the Cabinet of Ministers of Ukraine adopted a new implementation timeline: the registry of oligarchs is due within three months following the receipt of the Venice Commission recommendations to the law. The law will be also subject to amendments to reflect recommendations of the Venice Commission. The Venice Commission opinion on the Anti-Oligarch law was issued at the June 2023 Venice Commission plenary session. The Commission characterized the law as taking a “personalized” rather than “systemic” approach to de-oligarchization. The VC recommended confronting the problem of oligarchs through an effective competition policy, anti-corruption and anti-money-laundering measures, measures to ensure media pluralism, and rules on the financing of political parties and election campaigns.

Ukraine’s judicial sector remains weak and prone to corruption, creating another major obstacle to private investment. According to pre-war surveys conducted by the American Chamber of Commerce and the European Business Association, lack of trust in Ukraine’s judiciary is the number one deterrent for greater investment in Ukraine. Additionally, the head of the Supreme Court of Ukraine was arrested in May 2023 for accepting a $3 million bribe, a sign of ongoing corruption but also the will and capacity of anti-corruption institutions to address it. Nevertheless, efforts to reform the judiciary have made significant progress in recent years. In 2021, parliament adopted historic legislation to reform Ukraine’s two judicial governance bodies: the High Qualifications Commission of Judges (HQCJ), the body responsible for selecting new judges, and the High Council of Justice (HCJ), the body responsible for appointing them. The HCJ was reestablished in January 2023 with vetted membership and the HQCJ was reestablished in June 2023. Both institutions are now poised to select and appoint new judges to the roughly 2,200 judge vacancies across the country as well as address a backlog of more than 7,000 judicial misconduct cases, punishing and removing corrupt and criminal judges, as a means to renew Ukraine’s judiciary. The government also eliminated the notoriously corrupt Kyiv District Administrative Court and is in the process of replacing it with an entirely new entity.

An additional step to support judicial reforms and advance democracy would be for Ukraine to join the European Public Prosecutor’s Office (EPPO). Founded in 2021, its role in the EU integration and accession process is untested. Opening EPPO membership to candidate countries, including Ukraine, could contribute to their alignment with EU judicial standards, and it could strengthen the rule of law early in the integration process. In March 2022, Ukraine became the first non-EU country to sign a working arrangement with the EPPO, focusing on judicial cooperation in criminal matters and exchange of information. Fully joining the EPPO would add a layer of EU oversight over EU-funded projects.

In an April 2023 USAID, Department of Commerce, and AmCham Ukraine report, U.S. and foreign investors cited corruption, especially as it applies to the judiciary, customs, and government services, as a key challenge in Ukraine. Areas of focus continue to be in the expansion of digitalization to increase transparency and reduce physical interactions between investors and public sector officials, strengthening existing anti-corruption institutions, strengthening anti-corruption legal framework and the capacities and powers of existing oversight institutions, promoting an open approach and communication on corruption and aligning with EU acquis Directives and accession requirements related to fighting corruption.

Resources to Report Corruption

NABU, established in October 2014, is the appropriate resource for the reporting of high-level corruption.

Government of Ukraine contact for combating corruption:
National Anti-Corruption Bureau
3, Vasyl Surikov St, Kyiv, Ukraine 03035
Hot-line: 0-800-503-200
Corruption Reporting eForm: 

Contact at Transparency International:
Mr. Andriy Borovyk
Executive Director
Transparency International Ukraine

37-41 Sichovykh Striltsiv Street, 5th floor, Kyiv, Ukraine 04053+38(044) 360-52-42 

Russia and its proxy forces have illegally occupied Crimea and portions of Donetsk and Luhansk oblasts since 2014, and since its full-scale invasion it has expanded into portions of Zaporizhya and Kherson oblasts as well. Russia’s forces have committed countless atrocities, including war crimes and crimes against humanity. The UN estimates Russia’s full-scale invasion has killed at least 18,000 civilians and displaced 12 million more. Russia systematically targets vital infrastructure for water, gas, and electricity, at times disrupting essential service delivery to populated areas. Frequent air strikes threaten population centers throughout Ukraine.

The Ukrainian government continues to take measurable steps on governmental reform and transparency. Both political leaders and the public are solidly committed to EU accession, which provides a powerful stimulus for reform; despite the war, the Rada continues to advance legislation in line with EU integration requirements.

The government has made significant progress in improving the selection of judges, but key reforms to the Constitutional Court of Ukraine are still pending.

Oligarch influence in politics and the economy has declined steadily in recent years and the war has further weakened its grip, but it remains a powerful force in some sectors of the economy.

Ukraine has a well-educated and skilled labor force of about 17.4 million people (as of January 2022) with a nearly 100 percent literacy rate. Ukraine had a population of 41.13 million people as of February 2022 according to the State Statistical Service. United Nations data show that during 2022 Ukraine’s population shrunk to about 36.3 million people due to war. The UN reports that at least 12 million people have left their homes since Russia’s invasion of Ukraine. More than five million have fled to neighboring countries, while seven million people are still thought to be displaced inside Ukraine itself. As of July, more than 5.2 million refugees from Ukraine have been recorded across Europe. More than 3.5 million have applied for temporary residence in another country.

The ongoing war, loss of territories, destruction and relocation of enterprises, internal and external migration have all resulted in dramatic worsening of economic situation in Ukraine. Unemployment has increased sharply, reaching about 30 percent according to some estimates (official data is not available for 2022), and the burden on the social security system has increased. At the same time, the labor market is characterized by an imbalance in terms of professional qualifications and regional dimensions. According to available government labor statistics, Ukraine’s official unemployment rate was 9.8 percent in January 2022, although unemployment in some regions, particularly in rural areas, remained significantly higher. In January 2022 there were about 1.71 million unemployed workers and 900,000 of those were officially registered with the State Employment Service during 2022. Wages in Ukraine remain low by Western standards. In January 2022, the minimum monthly wage was raised to UAH 6,700 ($245) from UAH 6,500 ($238). This minimum monthly wage will be retained in 2023, too. The real average monthly wage decreased by 16.5 percent in January 2022 compared to December 2021 to UAH 14,577 ($534). The highest wages are traditionally in the financial and aviation sectors; the lowest wages are paid to agriculture, education, food service, and public health workers.

Ukrainian law allows workers to organize, and unions are prevalent in most industries. The law provides most workers with the right to form and join independent unions and to bargain collectively without previous authorization. On July 19 the Rada passed draft law No. 5371 “On Amendments to Certain Legislative Acts on Simplifying the Regulation of Labor Relations in the Field of Small and Medium Enterprises and Reducing the Administrative Burden on Entrepreneurial Activity” with the intention to liberalize Ukraine’s labor relations during martial law. Its provisions regulate the employment relations, in particular the conclusion and termination of employment contracts during the wartime. The bill also suspends collective bargaining rights for workers at any employer with 250 or fewer employees, but this provision is to be applied only during martial law. By law, trade unions are equal, and a union’s establishment does not require government permission. Within classic sectors of the economy, sector-specific collective bargaining agreements involve representative employers’ associations (e.g., chemical industry employers), sector trade unions, and some participation of the government through the Ministry of Social Policy. Such agreements can also take place at the regional level. The independence of unions from government or employer control, however, has been disputed by certain labor groups. Independent trade unions alleged that the country’s largest trade union confederation, the Federation of Trade Unions of Ukraine (FPU), enjoyed a close relationship with employers and members of some political parties. Unions not affiliated with the FPU were denied a share of disputed trade union assets inherited by the FPU from Soviet-era unions.

The law provides for the right to strike “to defend one’s economic and social interests,” as long as strikes do not jeopardize national security, public health, or the rights and liberties of others; the government generally respects this right. The law does not extend the right to strike to personnel of the Prosecutor General’s Office, the judiciary, armed forces, security services, law enforcement agencies, the transportation sector, or public servants. Workers who strike in prohibited sectors may receive prison terms of up to three years. Strikes are prohibited during martial law.

The State Labor Service is responsible for enforcing labor laws, although the number of planned and unplanned inspections is generally low. Experts assess the number to be inadequate relative to the size of the Ukrainian economy. Labor inspections were suspended during the first few months of martial law. On July 19, 2022, a Law #2352-IX restored unscheduled labor inspections on a limited list of grounds envisaged in the Article 16 of the Law of Ukraine No. 2136-IX dated March 15, 2022 “On the Organization of Labor Relations Under Martial Law.”

The grounds for State Labor Inspectors to conduct inspections include: an address of an employee or a trade union regarding the verification of employers’ compliance with the provisions of the Law of Ukraine “On the Organization of Labor Relations in the Conditions of Martial Law”, the legality of termination of employment contracts, the detection of unregistered labor relations, etc. The State Labor Service prioritizes the fight against undeclared work. Ukraine reports that, in 2021 the informally employed population aged 15 and over accounted for 19.5 percent of the total population employed. The National Mediation and Reconciliation Service (NMRS) is responsible for mediating labor disputes. According to official Ukrainian statistics, during 2022 the NMRS resolved 237 labor disputes that involved 1.6 million employees and 7.761 economic entities.

The U.S.-Ukraine Overseas Private Investment Corporation (OPIC) Agreement was signed in Washington in 1992. OPIC, now the U.S. International Development Finance Corporation (DFC), currently provides political risk insurance to several U.S. companies operating in Ukraine and has the capacity to insure other U.S. eligible investors if such coverage is sought. Ukraine is a member of the Multilateral Investment Guarantee Agency (MIGA). DFC has an active pipeline of projects in Ukraine across various sectors.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($M USD) 2021 $99,785 2022 $160,502.74
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2018 $489 2021 $532 BEA data available at:
Host country’s FDI in the United States ($M USD, stock positions) 2018 $ 0.6 2020 $2 BEA data available at:
Bea: Ukraine – International Trade and Investment Country Facts
Total inbound stock of FDI as % host GDP 2021 35% 2022 33.7% UNCTAD data available at:

* Source for Host Country Data: State Statistics Service of Ukraine, NBU (for FDI)

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward $65.747 100% Total Outward $2,260 100%
Cyprus $20,846 31.7 % Cyprus $1,137 50%
Netherlands $14,212 21.6% Latvia $75.7 3.3%
Switzerland $3,809 5.7% Russia $46.5 2.0%
Germany $3,012 4.5% Lithuania $8,8 0.3%
Northern Ireland $3.018 4.5% Switzerland $6.9 0.3%
“0” reflects amounts rounded to +/- USD 500,000.

Source: State Statistics Service of Ukraine

Table 4: Sources of Portfolio Investment
Portfolio Investment Assets (preliminary 2022 data)
Top Five Partners (Millions, current US Dollars)
Total Equity Securities Total Debt Securities
All Countries 640 100% All Countries 24 100% All Countries 616 100%
Austria 407 63.6% USA 17 70% Austria 407 66.13%
Poland 138 21.6% Cyprus 10 39.6% Poland 138 22.5%
Hungary 49 7.7% Hungary 49 8%
France 35 5.4% France 35 5.6%
USA 15 2.3%

Sarah “Sadie” Longbrake
Economic Officer
U.S. Embassy Kyiv
Aviakonstructor Igor Sikorsky St, 4, Kyiv, Ukraine, 04112
+380 44 521 5000

On This Page

  2. 1. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Toward Foreign Direct Investment
    2. Limits on Foreign Control and Right to Private Ownership and Establishment
    3. Other Investment Policy Reviews
    4. Business Facilitation
    5. Outward Investment
  3. 2. Bilateral Investment and Taxation Treaties
  4. 3. Legal Regime
    1. Transparency of the Regulatory System
    2. International Regulatory Considerations
    3. Legal System and Judicial Independence
    4. Laws and Regulations on Foreign Direct Investment
    5. Competition and Anti-Trust Laws
    6. Expropriation and Compensation
    7. Dispute Settlement
      1. ICSID Convention and New York Convention
      2. Investor-State Dispute Settlement
      3. International Commercial Arbitration and Foreign Courts
    8. Bankruptcy Regulations
  5. 4. Industrial Policies
    1. Investment Incentives
    2. Foreign Trade Zones/Free Ports/Trade Facilitation
    3. Performance and Data Localization Requirements
  6. 5. Protection of Property Rights
    1. Real Property
    2. Intellectual Property Rights
  7. 6. Financial Sector
    1. Capital Markets and Portfolio Investment
    2. Money and Banking System
    3. Foreign Exchange and Remittances
      1. Foreign Exchange
      2. Remittance Policies
    4. Sovereign Wealth Funds
  8. 7. State-Owned Enterprises
    1. Privatization Program
  9. 8. Responsible Business Conduct
    1. Additional Resources 
    2. Climate issues
  10. 9. Corruption
    1. Resources to Report Corruption
  11. 10. Political and Security Environment
  12. 11. Labor Policies and Practices
  13. 12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs
  14. 13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
  15. 14. Contact for More Information
2023 Investment Climate Statements: Ukraine
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