UKRAINE Law and Practice Contributed by: Illya Tkachuk, Igor Krasovskiy and Inna Kostrytska, INTEGRITES
Finally, the M&A transaction may require merger clearance, as defined in more detail in 7.5 Anti- trust Regulations . 7.3 Restrictions on Foreign Investments There is no specific regulations or authorities for permitting foreign direct investment. As a gen- eral rule, foreign investments are given the status of national investments unless specific restric- tions are introduced in the laws of Ukraine or international treaties. It is worth mentioning that there are some sec- torial restrictions under Ukrainian law. Howev- er, they seem to be somewhat standard – for example, the laws of Ukraine provide for certain restrictions on foreign investment in telecom- munications, insurance, the military and some other sectors. 7.4 National Security Review/Export Control There is no national security review of acquisi- tions in Ukraine, nor any specific restrictions or considerations for investors/buyers based in a particular part of the world. Notably, since the beginning of the war, Ukraine has gradually introduced limitations and restric- tions relating to Russian businesses in Ukraine. However, this reflects the global trend towards imposing sanctions on Russian businesses. 7.5 Antitrust Regulations The following types of transaction require prior merger clearance/anti-monopoly approval: • merger of companies or takeover of one com- pany by another; • direct or indirect acquisition of control over a company or a part of it;
• creation of a joint venture by two or more companies; and • direct or indirect acquisition of shares that ensures obtaining control, including 25% (or more) or 50% (or more) of votes in the highest governing body of a company. The acquisition of less than 50% of shares in a company is subject to obtaining merger control clearance if such minority interest ensures the control to the acquirer (this includes the transfer of negative control via veto rights under a share- holders’ agreement or other similar instruments). Under Ukrainian competition law, control refers to a decisive influence over a company’s busi- ness activity – irrespective of the form that such influence takes (including informal de facto con- trol). The test for control is based on the ability to veto important decisions relating to the business activity of a company, such as: • approval of the budget; • business, strategic and development plans; • appointment of senior management and key employees; and • entering into certain types of agreements. Ukrainian competition law provides for a “dou- ble-decker” thresholds system – ie, two alter- native thresholds. Merger control clearance is required if: • the aggregate worldwide value of assets or turnover of parties to the concentration exceeds EUR30 million, and the value of Ukrainian assets or turnover of at least two parties to the concentration exceeds EUR4 million each; or • the aggregate value of Ukrainian assets or turnover of at least one of the parties to the concentration exceeds EUR8 million, and the
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