PROTECTION OF PROPERTY RIGHTS AND PROMOTION OF INVESTMENT ACTIVITIES IN UKRAINE
The President of Ukraine signed the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine on Protection of Ownership Rights”. It introduces a greater level of protection to the owners of real estate property and shares in limited liability companies (“LLCs”) to prevent raidership attempts in Ukraine. This law will enter into force on 2 November 2019.
In addition, on 17 October 2019, the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine on Promotion of Investment Activity in Ukraine” (together – “Laws”) entered into force.
The Laws aim at improvement of investment climate and easing the conducting of business in Ukraine.
Major changes introduced by the Laws are:
• related-party transactions on below-the-market terms may be invalidated by court based on a shareholder’s claim
• balance of probabilities standard of proof is introduced in commercial proceedings
• state registration of property rights and shares in LLCs may be done only by state registrars and notaries
• state registration of legal entities based on the paper documents must be performed within the region where the legal entity is located, while state registration of legal entities based on electronic documents and state registration of private entrepreneurs may be performed regardless of their location in any region of Ukraine
• state registration of property rights must be performed only at the location of such real estate, while the state registration of encumbrances over real estate may be performed regardless of its location in any region of Ukraine
• state registrar and notary must thoroughly verify the identity, capacity, and authority (which must be confirmed by notarised power of attorney) of individuals submitting documents for state registration by using relevant state registers
• company’s shareholder or director may obtain at any time by phone or sms free of charge information on documents submitted and received for state registration with respect to its company
• administrative sanctions for violations during state registration of shares and property rights are substantially increased.
Prepared by lawyer Veronica Kedi