Technology Transfer and R&D Investment in Ukraine
Ukraineʼs engineering and technology talent base — historically concentrated in aerospace, defence, software, and applied sciences — represents one of the most cost-competitive and technically capable R&D environments accessible to international investors.
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For international investors, technology companies, and development institutions seeking to invest in or partner with Ukrainian R&D capacity, the legal framework involves more than a straightforward commercial arrangement. IP ownership under Ukrainian law, grant agreement conditions, export control obligations, and the interaction with Ukrainian corporate and tax law all require deliberate structuring from the outset. This work connects to our broader investment framework (→ Investing in Ukraine) and to software-specific contracting (→ IT Contracts and Software Transactions).
Legal framework for technology transfer and R&D investment in Ukraine
Technology transfer and R&D investment in Ukraine are governed by the Civil Code (Arts. 418–432 on intellectual property rights; Arts. 1107–1113 on IP disposal agreements), the Law on Copyright and Related Rights No. 2811-IX, in force since 1 January 2023 (Art. 14 on works created in the course of employment, Art. 15 on commissioned works), the Law on the Protection of Rights to Inventions and Utility Models, the Law on State Regulation of Technology Transfer Activity, and the Law on Scientific and Scientific-Technical Activity.
Key legal dimensions that distinguish R&D investment in Ukraine from other jurisdictions:
- IP ownership — Ukrainian law has no work-for-hire doctrine as such. Since 1 January 2023, economic rights in works created by employees vest in the employer (Art. 14 of Law No. 2811-IX) and in commissioned works in the customer (Art. 15; likewise Art. 440(3)–(4) of the Civil Code), unless the contract provides otherwise. A contract can displace these defaults, works created before 2023 fall under the earlier rules, and the rights do not move on to a holding company by themselves — so IP clauses and written assignment agreements remain essential (Art. 1107 of the Civil Code)
- State-funded research — where R&D is conducted at a state institution or with state grant funding, IP ownership and commercialisation rights are subject to statutory constraints (Art. 11 of the Law on State Regulation of Technology Transfer Activity)
- Export control — technology developed in Ukraine with defence, dual-use, or strategic applications may be subject to Ukrainian export control law on transfer abroad
- Grant conditions — EU, EBRD, EIB, and IFC funding carries compliance obligations that interact with Ukrainian corporate and IP law
- Tax treatment — cross-border royalty payments, IP transfers, and R&D cost-sharing arrangements have specific Ukrainian tax implications
From our practice
A European engineering company was establishing a contract R&D centre in Ukraine to develop industrial software. The initial structure, prepared by the clientʼs international counsel, applied a standard work-for-hire approach to the transfer of IP from the Ukrainian developers. The problem: Ukrainian law has no work-for-hire doctrine. The statutory defaults of Arts. 14–15 of Law No. 2811-IX apply only to works created under an employment contract or on commission and give way to the contract, while Art. 1113 of the Civil Code does not allow an assignment of rights to works that do not yet exist when the agreement is signed. A template clause written for another legal system could therefore have left the IP with the developers.
We restructured the arrangement: individual IP assignment agreements with each developer, drafted to meet Ukrainian formality requirements; integrated confidentiality and non-compete provisions; and a corporate IP holding structure through a Ukrainian LLC with onward transfer to an EU holding company. We also screened the technology under development for Ukrainian export control classification — some components had defence-adjacent applications.
This practice covers technology transfer agreements, R&D investment structuring, IP ownership design, and grant agreement support. Export control here means screening and compliance provisions within an R&D or transfer agreement — for full dual-use classification, export licensing, and sanctions compliance → Dual-Use Technologies and Export Control.
Scope of services
IP ownership structuring
- IP ownership analysis — employment, contractor, joint development
- IP assignment agreements — Ukrainian formality requirements
- Work-made-for-hire structuring for contractor relationships
- Background and foreground IP allocation
- IP holding structure design — where to hold IP developed in Ukraine
Technology transfer agreements
- Technology licences — exclusive, non-exclusive, field-of-use
- Know-how transfer agreements and confidentiality protections
- Technology assignment and full transfer structuring
- Cross-border royalty structuring — WHT, treaty benefits, NBU compliance
- Export control compliance provisions in transfer agreements
Grant agreement review
- EU framework programme grants — Horizon Europe, Digital Europe
- EBRD, EIB, and IFC project documentation
- Bilateral development fund grants — USAID, GIZ, FCDO structures
- IP conditions — ownership, licensing, exploitation obligations
- Reporting, audit, and compliance obligations
Joint R and D and consortium agreements
- Consortium agreement drafting for international-Ukrainian projects
- IP allocation — background, sideground, foreground
- Contribution valuation and cost-sharing mechanics
- Governance structure and decision-making
- Publication rights, confidentiality, embargo periods, exit provisions
R and D investment structuring
- Corporate vehicle selection — subsidiary, JV, branch
- R and D centre establishment — corporate, employment, IP
- Investment agreements for minority stakes in technology companies
- Cost-sharing arrangements — cross-border structuring and tax
- Technology spin-off structuring from research institutions
IP registration and enforcement
- Patent and utility model filing strategy in Ukraine
- Trademark registration for technology brands and products
- Copyright registration for software and technical works
- IP enforcement — infringement identification and legal action
- Coordination with international IP counsel on portfolio strategy
Comparing technology transfer structures under Ukrainian law
| Parameter | Technology licence | Full IP assignment |
|---|---|---|
| Employee, work within job duties | Vests in employer automatically | Vests in employer — but only for work strictly within documented job duties |
| Employee, work outside job duties | Typically captured by employment contract | Vests in the employee absent an express written assignment |
| Independent contractor / FOP | Vests in the commissioning party | Passes to the customer on creation by default since 1 January 2023 (Art. 15 of Law No. 2811-IX; Art. 440(4) of the Civil Code), unless the contract provides otherwise; an express clause is still needed for scope and pre-2023 works |
| Joint development | Governed by agreement | Governed by agreement — background / foreground allocation must be explicit |
| State-funded research | Varies by jurisdiction and grant terms | Vests in the institution or enterprise performing the work (Art. 11 of Law No. 143-V); passes to the state customer for state secrets and in other cases set by law |
| IP ownership | Remains with the licensor | Passes to the assignee |
| Control over use | Limited by licence terms — field of use, territory, term | Full control by the assignee after transfer |
| Payments and tax | Royalties — 15% WHT, reduced under applicable DTTs. NBU compliance for currency payments | Lump sum or structured payment. Transfer pricing rules for related parties |
| Export control | May require SSECU authorisation for licences covering strategic technology | Requires SSECU authorisation where the technology has defence or dual-use applications |
| Compatibility with EU grants | Generally compatible with exploitation obligations | May conflict with funder requirements on access to results |
| Formalities | Written form; licence registration with the Ukrainian IP office for patents | Written form; notarisation where agreed; registration of the transfer |
| Key risk | Licensor retains the ability to dispute the scope of the licence | Void or incomplete transfer: written form is mandatory (Art. 1107 of the Civil Code), and rights to works not yet in existence cannot be assigned (Art. 1113) |
Work algorithm
- Investment structure and IP analysisWe identify the proposed R&D investment structure, the parties, the nature of the technology, and the intended IP ownership outcome — and map the issues requiring deliberate structuring.
- Grant and funding framework reviewWhere EU, IFI, or bilateral funding is involved, we review the applicable grant conditions and their interaction with Ukrainian law, identifying conflicts that affect the investment structure.
- IP ownership designWe design the IP ownership, assignment, and licensing arrangement to achieve the investorʼs commercial objectives and to be valid and enforceable under Ukrainian law.
- Export control screeningWe screen the technology for Ukrainian export control classification — particularly where the R&D has defence-adjacent or dual-use applications — and advise on compliance structuring.
- DocumentationWe draft, review, and negotiate the relevant agreements — technology transfer agreements, consortium agreements, IP assignment agreements, grant sub-agreements, and investment documentation.
- Registration and complianceWe advise on Ukrainian IP registration, coordinate with tax advisors on cross-border royalty and transfer pricing, and support ongoing grant compliance obligations.
Who we work with
We act as Ukrainian Local Counsel for technology investment and R&D transactions — typically as part of a team led by an international law firm, investor, or development institution.
- International technology companies establishing or expanding R&D operations in Ukraine
- Foreign investors and venture funds investing in Ukrainian technology companies
- International financial institutions and development funds deploying capital into technology projects
- EU programme applicants and coordinators managing Horizon Europe or Digital Europe projects
- Research institutions and universities managing international R&D collaboration
- International law firms requiring Ukrainian law input on technology investment and IP structuring
- A European technology company sets up a contract R&D centre — employment vs contractor structuring, IP assignment, export control analysis
- A US venture fund makes a Series A investment in a Ukrainian deep-tech startup — IP ownership due diligence, investment agreement structuring
- A consortium applies for Horizon Europe funding with Ukrainian research partners — consortium agreement and IP provisions
- A development fund grants to a Ukrainian R&D institution — grant sub-agreement review for IP, reporting, compliance
- A pharmaceutical company partners with a Ukrainian research institute — joint development agreement under Ukrainian law
Frequently asked questions
Who owns IP developed by Ukrainian researchers under a foreign-funded project?
Ownership does not follow payment or project funding as such — it depends on the legal basis on which the work is created. Since 1 January 2023, economic rights in works created by employees vest in the employer (Art. 14 of Law No. 2811-IX) and in commissioned works in the customer (Art. 15; likewise Art. 440(3)–(4) of the Civil Code), unless the contract provides otherwise. A foreign funder that is neither the employer nor the customer does not acquire the rights automatically: they have to be transferred under a written agreement (Art. 1107 of the Civil Code). In state-funded research, rights to technology belong to the institution or enterprise performing the work, subject to the exceptions in Art. 11 of the Law on State Regulation of Technology Transfer Activity. We structure IP ownership from the outset of the R&D relationship — not as an afterthought when a dispute arises.
What IP conditions do EU grant programmes impose on Ukrainian participants?
EU framework programme grants — including Horizon Europe — impose IP conditions requiring participants to protect, exploit, and disseminate the results of funded research. Ukrainian participants must ensure that IP arising from the project is properly owned, registered, and available for exploitation as required by the grant agreement. Where background IP is contributed, ownership and access rights must be documented. In our experience the most problematic aspects are the exploitation obligations and restrictions on exclusive licensing, which can conflict with the participantʼs commercial interests.
Can technology developed in Ukraine be freely transferred abroad?
Not always. Technology developed in Ukraine — particularly with defence, dual-use, or strategic applications — may be subject to Ukrainian export control law on transfer abroad. This applies to physical goods, intangible technology transfers, and software. Additionally, where the development was funded by a Ukrainian state grant or conducted under a state defence order, specific statutory restrictions on commercialisation and transfer may apply. We conduct export control and grant condition analysis before structuring any cross-border technology transfer.
How are royalty payments from a foreign company to a Ukrainian IP owner taxed?
Royalty payments from a foreign company to a Ukrainian resident IP owner are subject to Ukrainian income tax. Conversely, royalty payments from a Ukrainian company to a foreign IP owner may be subject to Ukrainian withholding tax at the standard rate of 15%, reduced under applicable double tax treaties — Ukraine has an extensive treaty network. Transfer pricing rules apply to royalty arrangements between related parties. We advise on royalty structuring in coordination with tax advisors.
What is the legal framework for R and D at Ukrainian state research institutions?
State research institutions operate under the Law on Scientific and Scientific-Technical Activity, which refers the transfer of rights in IP created with state budget funds to the Law on State Regulation of Technology Transfer Activity. Under Art. 11 of that Law, economic rights in technology created in budget-funded research and development belong to the institution, organisation or enterprise performing the work; they pass to the state customer where the technology is classified as a state secret or in other cases set by law. The state customer may also use the technology free of charge for state needs, and such technology is to be used primarily in Ukraine. Foreign companies partnering with state institutions therefore need carefully structured collaboration agreements defining the IP allocation between the institution and the commercial partner, the commercialisation rights, and the applicable licensing terms.
Does a Ukrainian FOP contractor automatically transfer IP to the client?
In principle, yes — since 1 January 2023. Under Art. 15 of Law No. 2811-IX (and Art. 440(4) of the Civil Code), economic rights in a work created on commission pass to the customer from the moment of creation, unless the contract provides otherwise. Many foreign clients still work from pre-2023 assumptions or from common law templates and miss three gaps: the default applies only where the work is in substance created on commission; the contract itself can displace it; and works created before 2023 fall under the earlier rules. A written IP clause that fixes the scope of the rights and completes the chain of title remains necessary.
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