Ukraine revives plans for FDI screening in strategic sectors

Member news from CMS Ukraine

22 September 2025: Ukraine’s Parliament has registered Draft Law No. 14062 “On the Screening of Foreign Direct Investments.” If adopted, this would create Ukraine’s first mandatory FDI screening regime to safeguard national security and public order and align practice with international standards, including the EU’s FDI Screening Regulation.

At a glance

• Second attempt: A similar bill appeared in 2021 but stalled amid shifting priorities and the full-scale war.
• Timing: The Draft Law may change during the legislative process. If enacted, it would take effect six months after publication and not apply retroactively (transactions closed beforehand remain unaffected).
• What to do now: Foreign investors should assess whether planned deals could fall within scope and monitor developments

Who would be in scope?

Screening would apply to foreign investments in companies active in:

• Critical infrastructure (as listed in the state register);
• Extraction of strategic minerals (as designated by the Cabinet of Ministers);
• Military goods or dual-use items.

When would a filing be required?

A filing obligation would be triggered if a foreign investor:

• Acquires >25% of voting rights;
• Obtains governance or blocking rights (e.g., ability to appoint the sole executive, >50% of a collegial body, at least 25% of a supervisory board, or block key decisions); or
• Acquires/obtains use of assets ≥10% of the target’s total assets (per latest financials).

The draft also includes a broad “catch-all” for any direct foreign investment into a strategic target, which may be refined during the legislative process.

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How would the process work?

• Filing authority: Ministry of Economy, supported by a new advisory Commission (security services and foreign affairs representatives).
• Timelines:
  • Up to 60 days for completeness check (with 20 days to remedy deficiencies).
  • Up to 90 calendar days for substantive review.
• Outcomes: Approval; conditional approval (e.g., divestment/mitigation measures); or refusal. Transactions could be completed only once any conditions are met.

Refusal grounds (“hard bars” and risk-based)

Clearance cannot be granted if, at filing or within the prior two years, the investor, a shareholder or UBO has links to an aggressor/occupying state, is sanctioned, or holds related citizenship/property interests.
The Ministry must also refuse where false/incomplete information is provided or the transaction threatens national security, critical infrastructure, or vital services.

Interaction with merger control

The AMCU (Antimonopoly Committee of Ukraine) could clear concentrations only after a positive FDI decision. For merger cases pending at entry into force, AMCU review would be suspended until the FDI outcome.

Ongoing monitoring

Approved transactions would be subject to annual monitoring. Investors must:

• Submit monitoring data by 31 December of the year following approval;
• Pre-notify ownership-structure changes at least 20 days in advance.
  The Ministry would maintain a restricted-access register of foreign investors.

Enforcement

Non-compliance could lead to:

• Suspension of voting rights and dividends;
• Invalidity of the transaction;
• Fines up to 50% of the investment value;
• Potential damages claims.
  Ministry decisions (including monitoring outcomes) could be appealed in Ukrainian courts.

What this means for investors

• Map current and upcoming transactions against sector scope and triggers.
• Prepare for dual-track filings where merger control is relevant.
• Build time for screening timelines into deal planning and consider mitigation commitments.
• Track guidance and potential clarifications as the bill moves through Parliament.

Source: Draft Law of Ukraine “On the Screening of Foreign Direct Investments”, No. 14062, registered 22 September 2025. This update is shared courtesy of NUCC member CMS Ukraine.

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