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Legal Alert: Mandatory registration of foreign investments in Ukraine has been abolished

On June 22, 2016, the President of Ukraine signed into law an Act abrogating obligatory registration of foreign investments in Ukraine. From now on, foreign investors can benefit from all privileges and guarantees granted under the Ukrainian legislation (in particular, the exemption from the customs duty and freedom of repatriation) without registration of their investments in Ukraine.

To this end, the respective provisions on mandatory registration have been eliminated from i.a. the Commercial Code of Ukraine and the Foreign Investments Act of Ukraine. Notably, in spite of the fact that the Ukrainian legislation does no longer require registration of foreign investments, companies and banks with foreign equity shall further file statistic reports with regard to their investment activities on the territory of Ukraine.

Pending applications to register foreign investments will be sent back to applicants, as there are no more grounds for consideration. Furthermore, previously registered investments and unregistered ones shall equally enjoy all the scope of protection under the laws of Ukraine.

According to the explanatory note of the Parliament, registration of foreign investments constituted an unreasonable hurdle for business, since the information on foreign participation is in any case publicly available in the Ukrainian Commercial Register as well as the Securities Register.

The Law is expected to attract foreign investments into Ukraine and generally enhance the image of Ukraine as a host country among foreign businesses.

It should be noted that the national legislation does not affect the legal regime established under bilateral and multilateral investment protection treaties, to which Ukraine is a party. The rules of those treaties prevail in any case.

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