A European investor targeting a Ukrainian manufacturing company discovers that the target has three separate beneficial ownership layers, unregistered encumbrances on its land, and a pending tax audit. The deal looks viable on paper. In practice, without a structured legal approach, the transaction can collapse at closing – or expose the buyer to liabilities that dwarf the purchase price.
M&A transactions in Ukraine are governed by Ukrainian corporate legislation, commercial legislation, and competition law, each imposing distinct procedural requirements on buyers and sellers. A standard acquisition requires corporate approvals, regulatory clearances, and – where applicable – merger control filings with the Antimonopoly Committee of Ukraine before the deal can close. Timelines from letter of intent to closing typically range from three to nine months, depending on target complexity and regulatory requirements.
This page explains the legal instruments, procedures, and practical hazards that international clients face when buying or selling a business in Ukraine today, including cross-border implications arising from the ongoing conflict and EU alignment.
The regulatory setting for M&A in Ukraine
Ukrainian corporate legislation establishes two primary acquisition vehicles: the share purchase and the asset purchase. Most cross-border transactions use a share purchase agreement (SPA), which transfers ownership of the legal entity. Asset purchases are used when a buyer wants to acquire specific assets without inheriting the target's liabilities – a structure frequently chosen in distressed situations.
The Antimonopoly Committee of Ukraine (AMCU) – Ukraine's competition authority – holds mandatory merger control jurisdiction over transactions that meet defined threshold criteria. Where thresholds are triggered, the parties cannot close the deal before receiving AMCU clearance. Review periods vary. A standard Phase I review runs approximately 45 calendar days. Complex cases enter a second phase, extending the review by a further 135 days in the most demanding scenarios. Failing to file – or closing before clearance – exposes the parties to fines and the risk of transaction unwinding.
Ukrainian corporate legislation also requires notarially certified transfers for certain asset classes, including real property. A договір купівлі-продажу (sale and purchase agreement under Ukrainian law) for real estate must be executed before a notary in the form of an акт приймання-передачі (deed of transfer). Foreign buyers frequently underestimate the time and documentary volume that notarial procedures add to a Ukrainian deal.
Beyond competition law, regulated sectors – banking, insurance, financial services, energy, and telecommunications – require prior approval from sector-specific regulators. In the energy sector, the Національна комісія, що здійснює державне регулювання у сферах енергетики та комунальних послуг (National Energy and Utilities Regulatory Commission) must approve changes of control. These approvals run on their own timelines and cannot be accelerated by the parties alone.
Ukrainian investment legislation treats foreign and domestic investors formally as equals but imposes foreign exchange controls that affect how acquisition consideration is structured and repatriated. The Національний банк України (National Bank of Ukraine) administers foreign currency controls that, since 2022, have tightened significantly. This directly shapes whether a buyer can pay in foreign currency offshore or must route consideration through a Ukrainian bank account.
Core instruments: SPA structure, due diligence, and closing conditions
The share purchase agreement is the central legal instrument in a Ukrainian M&A deal. A well-drafted SPA covers representations and warranties, conditions precedent, closing mechanics, indemnification, and post-closing adjustment mechanisms. Each of these elements requires particular attention in the Ukrainian context.
Representations and warranties in Ukrainian deals must address a wider scope of risk than equivalent documents in Western European transactions. Ukrainian corporate registries – while publicly accessible – are not always complete or current. Beneficial ownership disclosures, required under anti-money-laundering legislation, are a mandatory starting point, but not a substitute for independent verification. Buyers should insist on a full beneficial ownership warranty from the seller and confirm it through independent due diligence before signing.
Due diligence in Ukraine covers at least four tracks simultaneously. First, corporate due diligence confirms ownership chain, share register accuracy, and authorised capital. Second, legal due diligence reviews material contracts, IP ownership, employment arrangements, and litigation exposure. Third, financial due diligence examines accounting records, tax position, and off-balance-sheet liabilities. Fourth, regulatory due diligence identifies all licences, permits, and sector approvals that must transfer or be reissued upon change of control.
The tax track deserves particular attention. Ukrainian tax legislation gives tax authorities the right to audit entities for periods up to three years prior to the inspection date. A pending audit – or the risk of a future retrospective audit – is a significant liability that buyers routinely underestimate. Buyers should require either a clean tax certificate from the Ukrainian tax authority or, where that is not available, a specific tax indemnity from the seller covering the pre-closing period.
Closing conditions in a Ukrainian SPA typically include AMCU clearance (where required), sector regulatory approvals, third-party consents under material contracts, and the absence of material adverse change. The material adverse change clause requires careful drafting in the Ukrainian context, given ongoing conflict-related disruptions. Courts in Ukraine and in the governing-law jurisdiction of the SPA will interpret this clause based on the specific language chosen. Drafters should define MAC with reference to quantified thresholds rather than open-ended qualitative standards wherever possible.
For buyers concerned about the broader corporate governance and structural issues in Ukrainian companies, those questions are addressed separately and affect both the deal structure and post-closing integration planning.
To receive an expert assessment of your M&A transaction in Ukraine, contact us at info@ferrazwhitmore.com.
Practical pitfalls for international buyers and sellers
Ukrainian M&A transactions present a cluster of risks that experienced local counsel encounter routinely. International clients unfamiliar with the market are exposed to all of them simultaneously.
The first common error is relying on the public corporate registry alone to confirm ownership. The Єдиний державний реєстр юридичних осіб, фізичних осіб-підприємців та громадських формувань (Unified State Register of Legal Entities) provides a starting point, but registration data can lag reality by weeks or months. Share pledge agreements and options may not appear in the register at all. Buyers who close without a full title search and notarial confirmation of an unencumbered share register expose themselves to competing claims post-closing.
The second frequent pitfall is underestimating the labour law dimension. Ukrainian employment legislation provides significant protections to employees, including mandatory consultation rights in certain restructuring scenarios. A change of control in a company with a collective agreement may trigger consultation obligations. Buyers who ignore this risk face labour disputes that delay post-closing integration and generate claims under employment legislation.
The third recurring issue is land and real property title. Ukrainian land legislation has undergone substantial reform, including the lifting of a long-standing moratorium on agricultural land sales. Historical title chains for industrial real estate are often incomplete. Unregistered servitudes, encumbrances, or competing claims surface after closing. A specialist land title review – separate from the general legal due diligence – is essential for any acquisition involving real property.
The fourth pitfall is structural: many Ukrainian businesses operate across multiple related-party entities with informal cash transfers between them. A buyer acquiring only the primary operating company may find that its most valuable contracts, IP rights, or equipment sit in a related entity that is not included in the deal perimeter. Mapping the full group structure at the outset of due diligence is non-negotiable.
The fifth issue is war-risk and force majeure exposure. Ukrainian courts and commercial practice have developed a body of reasoning around force majeure arising from the ongoing conflict. Buyers should assess whether the target's key contracts contain force majeure clauses that counterparties could invoke post-closing, and whether those claims are pending or threatened.
Practitioners advising on Ukrainian deals also note that warranty and indemnity insurance – standard in Western European transactions – remains difficult to obtain for Ukrainian targets. Buyers therefore rely more heavily on purchase price adjustments, escrow arrangements, and seller indemnities. Negotiating those protections requires careful attention early in the deal process, before the parties reach heads of terms.
Cross-border considerations: conflict, EU alignment, and deal structure
No analysis of M&A in Ukraine today can avoid the cross-border dimension. The conflict with Russia has fundamentally altered the risk profile of Ukrainian targets and the mechanics by which international buyers structure their exposure.
Buyers from the EU and other Western jurisdictions must confirm that the target, its shareholders, and its counterparties are not subject to EU, US, or UK sanctions. Sanctions exposure can arise indirectly through minority shareholders, lenders, or key suppliers. A sanctions screening covering all layers of the beneficial ownership chain is a prerequisite, not a formality.
The geographical concentration of the target's operations is a critical due diligence factor. Assets located in conflict-affected regions present insurance, valuation, and operational continuity risks that must be priced into the deal structure. Buyers acquiring targets with assets in eastern or southern Ukraine should model worst-case scenarios for physical asset impairment and adjust the purchase price – or escrow structure – accordingly.
Ukraine's EU accession process is reshaping its legal order. Ukrainian commercial legislation, corporate legislation, and competition law are being progressively aligned with EU standards. For buyers, this creates an opportunity: an acquisition made at current valuations may benefit from regulatory convergence that reduces compliance costs and improves comparability with EU-based assets over the medium term. However, alignment is ongoing, and transitional provisions create gaps that need specialist monitoring.
Clients considering parallel exposure in neighbouring markets should note that M&A structuring considerations for acquisitions in Russia involve a separate and distinct sanctions and regulatory analysis that does not transfer to the Ukrainian context.
Governing law is a strategic choice. Ukrainian law governs the corporate mechanics of any transfer of shares in a Ukrainian company. However, parties are free to choose a different governing law for the commercial terms of the SPA – English law and Swedish law are common choices in cross-border Ukrainian deals. Dispute resolution is typically routed through international arbitration – the Stockholm Chamber of Commerce and the International Chamber of Commerce are the most frequently selected institutions for disputes involving Ukrainian parties. The enforceability of resulting awards against Ukrainian assets depends on whether the award creditor can locate and attach assets outside Ukraine.
For further guidance on establishing or restructuring a legal presence ahead of an acquisition, the guide to company formation in Ukraine provides a detailed procedural overview that complements the M&A analysis presented here.
To explore legal options for structuring your acquisition or exit in Ukraine, schedule a consultation at info@ferrazwhitmore.com.
Self-assessment checklist before initiating an M&A process in Ukraine
An acquisition in Ukraine is viable and manageable if the following conditions are in place before the deal process begins.
On deal structure:
- You have identified whether the transaction will proceed as a share purchase or asset purchase, and confirmed which structure best matches your liability tolerance.
- You have confirmed that the target's beneficial ownership chain is fully mapped and does not include sanctioned individuals or entities.
- You have assessed whether AMCU merger control filing thresholds are triggered and built the clearance timeline into your deal schedule.
On due diligence:
- Corporate, legal, financial, and regulatory due diligence tracks are scoped and resourced, with a specific land title review where the target holds real property.
- The target's tax position has been reviewed, including open audit periods and any pending tax authority correspondence.
- The target's key contracts have been reviewed for change-of-control provisions, force majeure clauses, and counterparty consent requirements.
On deal protection:
- The SPA includes representations and warranties that cover the full beneficial ownership chain, the accuracy of the corporate register, and the absence of undisclosed encumbrances.
- A purchase price adjustment mechanism – locked-box or completion accounts – has been agreed and is appropriate for the target's accounting quality.
- Escrow or seller indemnity arrangements are in place to cover tax and employment liabilities arising from the pre-closing period.
On cross-border exposure:
- Governing law and dispute resolution forum are specified in the SPA, with enforcement mechanics confirmed for the jurisdictions where seller assets are located.
- Physical asset exposure in conflict-affected regions has been priced or ring-fenced within the deal structure.
- Post-closing regulatory monitoring obligations – including any sector-specific reporting to Ukrainian regulators – have been assigned to a named responsible party.
Frequently asked questions
Q: How long does an M&A transaction in Ukraine typically take from signing to closing?
A: For transactions not requiring AMCU merger control clearance, closing can occur within four to eight weeks of signing, provided due diligence is complete and closing conditions are limited in scope. Where AMCU clearance is required, the minimum additional period is approximately 45 calendar days for a standard Phase I review. Complex deals involving sector regulatory approvals routinely take six to nine months from letter of intent to closing.
Q: Can a foreign company acquire 100% of a Ukrainian business without any local regulatory approval?
A: This is a common misconception. While Ukrainian investment legislation formally permits full foreign ownership in most sectors, a 100% acquisition may still require AMCU clearance if the parties meet competition thresholds. Regulated sectors – including energy, banking, and insurance – require sector-specific regulatory approval regardless of the foreign ownership percentage. In addition, foreign exchange rules govern how and where the acquisition consideration is paid, requiring compliance with National Bank of Ukraine currency control regulations.
Q: What due diligence should a buyer prioritise given the current conflict environment in Ukraine?
A: Beyond standard corporate and financial due diligence, buyers should prioritise three areas. First, a full sanctions screening covering all beneficial owners, lenders, and material counterparties. Second, a physical asset review confirming the location of key assets relative to conflict-affected areas, with insurance coverage assessed separately. Third, a review of material contracts for force majeure clauses already invoked or threatened by counterparties. Engaging a lawyer in Ukraine with cross-border M&A experience – and access to on-the-ground information sources – is essential for an accurate risk assessment in current conditions.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our team combines Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions in M&A transactions, including acquisitions, disposals, and joint ventures in Ukraine and across the CIS region. We advise international entrepreneurs, institutional investors, and in-house legal teams who need results-oriented counsel across multiple legal systems. As a law firm in Ukraine-facing transactions, we bring specific experience in SPA structuring, cross-border due diligence, and regulatory clearance management in high-complexity markets. The firm's M&A practice covers both civil law and common law systems and includes practitioners with experience before international arbitral institutions including the ICC and the SCC. Our Lisbon base provides direct access to EU regulatory conditions, while our cross-border expertise supports enforcement and arbitration strategies across Eastern European and CIS jurisdictions. To discuss your M&A transaction in Ukraine, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.