Investment Structuring & M&A in Ukraine
A shareholders’ agreement governed by English law may grant comprehensive minority protections — but if veto rights conflict with the mandatory competence of Ukrainian corporate bodies, the investor’s safeguards become unenforceable at the point where they matter most. Put/call options structured without regard to Ukrainian transfer restrictions may be void. Deadlock mechanisms that rely on board-level resolution fail in Ukrainian LLCs where the participants’ meeting holds ultimate authority.
These are not edge cases — they are the standard failure points in cross-border investment structures involving Ukrainian assets. We act as Ukrainian counsel within cross-border investment transactions, ensuring that structures designed under foreign law are compatible with Ukrainian mandatory rules and workable in practice. This work forms part of our broader investment framework (→ Investing in Ukraine).
Legal framework & structuring context
Many investment structures entering Ukraine are governed by English or other foreign law. Their effectiveness depends on how they interact with Ukrainian mandatory corporate rules at three critical points:
- Governance — Ukrainian law prescribes mandatory competences of corporate bodies (participants’ meeting, director) that cannot be overridden by SHA provisions or board-level arrangements
- Transfers — share transfer mechanisms (tag-along, drag-along, put/call options) must comply with Ukrainian pre-emptive rights and transfer restrictions
- Enforcement — security interests, pledges over corporate rights, and guarantee structures must be registrable and enforceable under Ukrainian law
Without alignment at these points, a structure that works under English law may be unenforceable in Ukraine — and the investor discovers this only when enforcement is needed.
Scope of services
Ownership & control structuring
- Acquisition of shares or corporate rights — direct and through holding vehicles
- Joint venture structuring with allocation of control between partners
- Governance mechanisms aligned with Ukrainian mandatory corporate rules
- Exit scenarios and transfer restrictions enforceable under Ukrainian law
- Integration with holding structures in foreign jurisdictions
Shareholders’ agreements & investor protection
- Minority protection mechanisms compatible with Ukrainian corporate law
- Veto rights and reserved matters aligned with mandatory competences
- Tag-along and drag-along structured to comply with Ukrainian transfer rules
- Deadlock resolution mechanisms workable in LLC and JSC structures
- Alignment of English-law SHA with Ukrainian mandatory rules
M&A transaction support
- SPA structuring and review from a Ukrainian law perspective
- Purchase price mechanisms — completion accounts, locked-box, earn-out
- Warranties and indemnities — enforceability under Ukrainian law
- Escrow and holdback structures
- Antitrust filings and regulatory approvals (→ FDI Regulation)
Cross-border structuring & investment vehicles
- Foreign holding companies and SPVs — including post-MLI treaty analysis
- Alignment with bilateral investment treaties for investment protection
- Multi-layered ownership models with transparent control
- Capital flow structuring compliant with Ukrainian currency control rules
- Coordination with foreign legal advisors on structure design
Structuring with financing elements
- Integration of debt and equity structures within a single investment model
- Alignment with asset-based financing (→ Structured Asset Finance)
- Investor rights in financed projects — priority and waterfall mechanisms
- Coordination with capital markets transactions (→ Capital Markets)
Regulatory alignment & feasibility
- Foreign investment restrictions and sector-specific prohibitions (→ FDI Regulation)
- Licensing and permit requirements affecting the investment
- Structuring ownership to meet regulatory compliance thresholds
- Coordination with due diligence findings (→ Due Diligence)
Work algorithm
We integrate into your transaction team as Ukrainian Local Counsel — working alongside lead counsel to ensure that the Ukrainian legal layer is aligned with the overall deal structure.
Step 1 — Transaction review and conflict mapping. We review the proposed investment structure and transaction documents (SHA, SPA, term sheet) to identify points where the structure conflicts with Ukrainian mandatory rules. We deliver a structured memo mapping each issue to a specific Ukrainian law provision.
Step 2 — Structuring design. We develop a legally workable structure aligning ownership, control, and financing — adapted to Ukrainian corporate, regulatory, and enforcement frameworks.
Step 3 — Risk identification and allocation. We identify legal, regulatory, and enforcement risks and advise on their allocation in transaction documentation — including warranties, indemnities, and conditions precedent.
Step 4 — SHA and SPA alignment. We review and adapt transaction documents to ensure that key provisions (governance, transfers, exit, dispute resolution) are enforceable under Ukrainian law without requiring structural renegotiation.
Step 5 — Coordination with international counsel. We integrate the Ukrainian law layer into the overall transaction structure — working alongside lead counsel to ensure consistency between Ukrainian and foreign law documentation.
Step 6 — Regulatory coordination. We manage regulatory filings, antitrust approvals, and licensing requirements in parallel with the transaction timeline.
Step 7 — Implementation support. We support execution — corporate registrations, share transfers, governance implementation — ensuring the structure remains workable in practice after closing.
Who we work with
We act as Ukrainian Local Counsel for international investment market participants — typically as part of a team led by a foreign law firm or instructed directly by the investor.
Our clients include:
- Foreign investors and private equity funds acquiring stakes in Ukrainian companies
- International law firms acting as lead counsel on cross-border transactions with a Ukrainian element
- Strategic investors structuring joint ventures with Ukrainian partners
- Infrastructure, energy, and aviation investors requiring coordinated structuring and regulatory support
Typical situations we handle:
- PE fund acquiring a minority stake in a Ukrainian tech company — structuring SHA with Ukrainian mandatory rule alignment
- International law firm needs Local Counsel review of English-law SHA for enforceability in Ukraine
- Strategic investor structuring a 50/50 JV with a Ukrainian partner — deadlock resolution and governance design
- Holding company restructuring Ukrainian subsidiaries ahead of a financing round or exit
- Cross-border M&A with Ukrainian target — SPA review, regulatory filings, post-completion integration
Key experts
Doctor of Laws — International investment structuring, M&A, cross-border transactions, shareholders’ agreements
Doctor of Laws — Investment disputes, international commercial arbitration, enforcement of foreign judgments
PhD — Regulatory compliance, market entry, due diligence, capital markets structuring
FAQ: Investment Structuring & M&A in Ukraine
Are English-law shareholders' agreements enforceable in Ukraine?
English-law SHAs are valid as contracts between the parties. However, provisions that conflict with Ukrainian mandatory corporate rules — such as board competence allocation, quorum requirements, or transfer restrictions — may be unenforceable in Ukrainian courts. We test each SHA provision against mandatory rules and identify what requires adaptation before the agreement is signed.
How do Ukrainian mandatory rules affect drag-along and tag-along rights?
Ukrainian corporate law imposes pre-emptive rights on share transfers in LLCs. Drag-along and tag-along mechanisms must be structured to comply with these rules — otherwise they may be challenged by other participants. The approach differs between LLCs and JSCs, and depends on whether the SHA is governed by Ukrainian or foreign law.
What is the best legal form for a foreign-owned company in Ukraine — LLC or JSC?
Most foreign investments use the LLC (TOV) form due to its flexibility and lower administrative burden. JSCs are used for larger projects requiring public capital raising or complex governance. The choice affects governance mechanisms, transfer restrictions, capital requirements, and exit options. We advise on the optimal form based on the specific investment structure.
Can an investor structure effective control through a minority stake?
Yes, through governance mechanisms — reserved matters, veto rights, board composition, and information rights. However, these mechanisms must be compatible with Ukrainian mandatory rules on corporate body competences. A minority investor may have contractual control under the SHA but lack enforceable authority under Ukrainian corporate law if the structure is not properly adapted.
What are the risks of using a Cyprus or Dutch SPV for a Ukrainian acquisition?
Post-MLI, many tax treaty benefits have been restricted through principal purpose tests and limitation on benefits clauses. The choice of holding jurisdiction must account for substance requirements, treaty applicability, and Ukrainian anti-avoidance rules. We coordinate with tax advisors to ensure the holding structure is both tax-efficient and legally sustainable.
How are purchase price adjustments structured in Ukrainian M&A?
Both completion accounts and locked-box mechanisms are used. The choice depends on the availability of reliable financials, the gap between signing and closing, and the level of seller cooperation. Ukrainian-specific considerations include currency control requirements on cross-border payments and withholding tax on price adjustment payments.
Related practices
Ready to proceed?
We will review your investment structure and ensure it is workable and enforceable in Ukraine.
