UKRAINE Law and Practice Contributed by: Timur Bondaryev, Maryna Sharapa, Andrii Pidhainyi and Olena Yurets, Arzinger
5.3 REITs A real estate investment trust (REIT) in Ukraine is a publicly available mechanism for investing in real estate. However, it is not popular and is only beginning to attract investors. Only a few com - panies provide such services. The advantages of this investment mechanism include: • a low entry threshold (it can go as low as USD150); and • a reduced personal income tax rate for income received through REITs. 5.4 Minimum Capital Requirement The minimum capital required to establish an LLC is UAH0.01; and is UAH1.34 million for a JSC. 5.5 Applicable Governance Requirements The main governing body of an LLC and a JSC is the general shareholders’ meeting. An LLC may be managed by a single director or a board, and may have a supervisory board, depending on the investor’s choice. The LLC’s charter may provide for limitations of the director’s powers. The management structure of a JSC is deter - mined by its charter. Under the one-level struc - ture of a JSC, it is managed by a single direc - tor (if the number of shareholders is up to ten people) or a board of directors. Under the two- level structure of a JSC, besides having a single director or board of directors, it is required to have a supervisory board. There are also corpo - rate governance requirements for public JSCs, including the requirement to appoint independ - ent directors to the supervisory board. The Corporate Transparency Act does not apply in Ukraine.
5.6 Annual Entity Maintenance and Accounting Compliance For an LLC, the annual entity maintenance and accounting compliance costs may vary greatly, depending on the volume of operations of the company. For instance, if there is a relatively small number of transactions per month (ie, up to 50 or 100 transactions), and a small number of employees, accounting can be outsourced for a reasonable fee. If the company is more active, hiring an accountant (or several) may be neces - sary. As JSCs have more complicated accounting and reporting practices, the relevant costs are signifi - cantly higher for this type of entity. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time The main types of agreements on the use of real estate are leasehold and easement. 6.2 Types of Commercial Leases There is no special treatment of commercial leases; the lease is generally regulated by the Civil Code of Ukraine, while the leasing of public assets (State and communal properties) is regu - lated by a separate, dedicated law. 6.3 Regulation of Rents or Lease Terms As stated at 6.2 Types of Commercial Leases , the lease is regulated by the general provisions of the Civil Code of Ukraine, and there is a sig - nificant amount of discretion in practice. There is currently no material ongoing regulation of rents or lease terms that resulted from the COVID-19 pandemic.
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