UKRAINE Law and Practice Contributed by: Timur Bondaryev, Maryna Sharapa, Andrii Pidhainyi and Olena Yurets, Arzinger
5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets The most common and viable investment vehi - cles are the limited liability company (LLC) and the joint stock company (JSC). However, various entities may of course be used by investors. Besides those already mentioned, there are also: • additional liability companies; • full liability companies and commandite companies (types of entities close to full and limited partnerships); • private enterprises; and • co-operates, etc. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity An LLC is a company in which the investor’s liability is limited to its contribution to the com - pany’s share capital. It is a straightforward type of entity, which is easy to establish and operate. The membership in an LLC is registered in the Companies Registry. A JSC is a business entity by shares of a cer - tain nominal. This is a more advanced type of entity that is more suited to larger structures with elaborate corporate governance. The JSC may issue different types of shares; the shares of a JSC are securities and are stored by a deposi - tory institution. The procedures for convening the general shareholders’ meeting, formulation of agenda, etc, are more complicated in a JSC. Furthermore, JSCs may conduct a public offer - ing of shares. There are no tax benefits under the general rules for these types of entities.
Therefore, there may or may not be stages where third parties are involved and raise an objection. The greatest likelihood of third parties objecting is during the stages of developing the detailed plan of the territory and conducting an environ - mental impact assessment, as these procedures imply public hearings. However, there are also cases where the public objects at later stages of construction. 4.5 Right of Appeal Against an Authority’s Decision There is a right to appeal to a higher administra - tive body and to challenge the decision in court. 4.6 Agreements With Local or Governmental Authorities There is no requirement to enter into facilitation agreements. However, the developer will likely need to conclude agreements with utilities sup - pliers to connect the property to the relevant networks. 4.7 Enforcement of Restrictions on Development and Designated Use Firstly, when leasing or purchasing public land, relevant authorities will ensure compliance with urban planning documents, and will refuse to allocate the land if the intention of the construc - tion contradicts the aforementioned documents. Secondly, the controlling authority may refuse to issue the construction permit. Lastly, depending on the restriction, a certain controlling authority may exist that can inspect the facility. For instance, an authority exists that inspects land, and may establish a violation of the designated use.
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