Ukraine moves to tighten foreign investment rules in key sectors

By setting up formal review procedures for deals involving strategic assets, Ukraine aims to align with European investment-security standards and guard against hostile takeovers during wartime.

Who Should Take Notice?

Foreign investors and international companies planning to acquire shares in Ukrainian businesses will need to pay close attention. Likewise, Ukrainian firms operating in sensitive industries, as well as their legal and financial advisors, should monitor developments. 

The draft law affects anyone involved in cross-border mergers, acquisitions or significant asset purchases in sectors of strategic importance. In practice, the key players include energy and utility businesses, mining companies, defense and defense-tech businesses and contractors, and firms handling dual-use technologies.

Which Economic Sectors Are Affected?

The screening regime targets strategic sectors. Under the draft law, any foreign capital flowing into companies that operate critical infrastructure (such as power grids, transportation systems, or telecommunications), exploit metallic or non-metallic natural resources, or develop, produce, repair, transport, dispose of, or trade in military and dual-use goods will trigger review. 

In short, energy, utilities, mining, defense manufacturing, and related industries fall under the new controls. Transactions that grant significant control, e.g. the purchase of 25% or 50% of the equity, or assets exceeding 10% of a company’s value in these targeted businesses must be screened.

The Screening Procedure

The proposed law envisions a new state authority (likely under the Ministry of Economy) charged with managing FDI screening and maintaining a registry of foreign investors. An investor would submit an application to this body, supplying detailed information about the transaction and the investor’s ownership structure. Within a 90-day deadline, the authority must decide whether to approve the investment, approve it with conditions, or deny it.

A collegial Impact Assessment Commission (composed of representatives from security services, intelligence agencies, the Foreign Ministry and other relevant bodies) will advise on complex cases. This commission reviews submitted documents, identifies any risks related to changes in ownership, and makes a recommendation. The screening body then issues a formal decision based on these inputs.

After approval, the new authority will monitor compliance with any conditions attached to the investment. It will also collect and analyze data on foreign investors and publish an annual report by June 30 each year summarizing the screening outcomes. This ongoing oversight is meant to ensure that approved investments continue to meet national security criteria.

Obviously, an investments will not be approved if the investor has ties to russia, has been sanctioned, is a russian citizen, or maintained property interests in russia within the last two years. Providing false or partial disclosures may result in voting rights being suspended, dividends withheld, and the transaction set aside as void.

What are the Implications for Investors?

The introduction of this screening law means that foreign investors must factor in regulatory review when planning major deals in Ukraine. 

Transactions meeting the threshold (e.g. acquisition of 25%+ participatory share or significant assets) in sensitive sectors will no longer be straightforward. Investors should prepare for submission of detailed documentation and expect a waiting period of up to three months for approval. Moreover, agreements could be altered or rejected if security concerns arise, and non-compliance (such as providing false information) may be penalized under the draft rules.

On the other hand, a formal screening process also brings clarity and predictability. By codifying which deals require vetting, businesses can better assess risks. The law aims to ensure that incoming capital bolsters Ukraine’s defense and recovery rather than posing national security threats. 

In the long term, aligning with EU and NATO practices on investment screening could make Ukraine a more stable environment for international investors who follow the rules.

When It Takes Effect and What to Expect?

As of now, the proposal is just entering the legislative process. Registered on September 22, 2025, the bill will be reviewed by parliamentary committees and debated in several readings. If passed, there will likely be a transition period for setting up the new FDI screening authority and writing implementing regulations. Observers expect that once approved, the law will come into force within six months, with the subsequent government’s clarification of the exact procedures and publishing guidance for investors.

In the meantime, foreign investors and affected industries should stay informed. The development of a national screening law represents a major shift in Ukraine’s investment climate. Companies already active in key sectors or considering new ventures should consult legal counsel and possibly begin internal compliance checks in anticipation.

Conclusion

Ukraine’s newly registered FDI screening bill reflects growing global trends toward scrutinizing foreign ownership of critical assets. By requiring vetting of investments in energy, mining, defense-related industries and others, the law seeks to protect national security interests during wartime and beyond. For investors, this means enhanced due diligence but also a clearer set of rules. As the legislative process unfolds, stakeholders should monitor updates closely and prepare for a more regulated investment landscape in Ukraine.