Foreign Investment Screening in Ukraine: Proposed Rules and Deal Risks

Ukraine is developing its first dedicated foreign direct investment screening regime. The September 2025 proposal would examine investments in sectors linked to national security before certain transactions close. Defence, critical infrastructure and strategic minerals sit at the centre of the debate.

The framework is not yet law. As of 27 August 2026, Draft Laws No. 14062 and No. 14062-1 remain under review in the Verkhovna Rada’s Committee on Economic Development. The thresholds, procedure and consequences discussed below therefore describe proposals, not current filing obligations.

The government has created an interagency commission, and Parliament continues to work on the model. For international investors, due diligence in Ukraine should now include potential screening as a deal-planning issue.

What Is FDI Screening?

Foreign direct investment screening allows a state to examine whether an inbound investment could affect national security or public order. It can consider the investor’s ownership, foreign-state links, source of capital, control rights and access to strategic assets, technology or data.

Screening tests transactions that could give an investor influence over sensitive assets. Depending on the final law, a government could clear a deal, impose conditions or prohibit it.

Ukraine’s proposals form part of its EU-integration agenda. Until the final rules are adopted, political and regulatory risk assessment can help investors distinguish confirmed requirements from policy signals that may change.

Ukraine’s Current Position

Draft Law No. 14062 was registered on 22 September 2025. It proposed a mandatory pre-closing screening process for qualifying foreign investments. An alternative text, Draft Law No. 14062-1, followed on 7 October 2025 with a different institutional and procedural design.

Both drafts were added to Parliament’s agenda in February 2026. Neither has passed its first reading. Committee work continued during 2026, which means the September thresholds and enforcement measures may change before any law is adopted.

The Cabinet of Ministers took a separate step on 28 January 2026 by establishing the Interagency Commission on Foreign Direct Investment Screening. The commission is a temporary advisory body. It may analyse planned or completed investments in businesses of strategic importance, request information and submit recommendations to the government.

The commission is not a statutory clearance authority operating the mandatory regime described in Draft Law No. 14062. Its creation does not make the draft’s thresholds or penalties effective law.

In June 2026, the parliamentary committee described three possible forms of review:

• an authorisation model for entry into the defence industry;
• a notification model under which investors disclose their intentions and the origin of capital;
• a retrospective mechanism focused mainly on sanctioned beneficial owners.

These options do not formally amend the registered drafts. They do, however, make the original thresholds and procedure an unsafe basis for predicting the final regime.

The September 2025 text proposed a six-month period between official publication and entry into force. The commencement date could change with the final wording.

Which Sectors Could Fall Within Scope?

The September 2025 draft focused on three groups of businesses whose activities could affect national security.

Critical infrastructure. The draft referred to operators such as gas pipeline businesses, electricity transmission and distribution companies, and large water suppliers.

Strategic minerals. The proposed screening would cover subsoil users extracting minerals such as uranium, lithium, tantalum, nickel, copper, titanium and zirconium.

Defence and dual-use activities. The scope extended to the development, production, modernisation, repair, transport, disposal, import, export and sale of military or dual-use goods, together with related services. This could capture private manufacturers as well as state-owned businesses and importers of relevant components or technology.

Parliamentary discussion in June 2026 also referred to electronic communications, information protection and media. The eventual sector list may therefore differ from the original draft. Investors should assess the target’s actual activities, licences, assets and contracts rather than rely only on its registered business codes.

Who and What Could Be Reviewed?

Draft Law No. 14062 used a broad concept of a foreign investor. It covered foreign legal entities, certain foreign individuals, foreign states, international organisations and other entities recognised as foreign under Ukrainian law.

The proposed review was not limited to a straightforward acquisition of shares. It could also capture transactions or arrangements that give an investor decisive influence over a Ukrainian business or its key assets. Relevant rights could include:

• more than 25 per cent of voting shares;
• the right to appoint the chief executive;
• the right to appoint more than half of an executive body;
• the right to appoint more than 25 per cent of a supervisory body;
• veto rights over decisions of the company’s governing bodies;
• ownership or lease of fixed assets worth at least 10 per cent of the target’s total assets, based on its latest financial statements;
• ownership or use rights over land connected to a business in a screened sector;
• other contractual or governance arrangements that create decisive influence.

Indirect acquisitions and investments made through affiliated entities could also fall within the proposed scope. A transaction structured outside Ukraine may still matter if it changes control over a Ukrainian target. Where local partners, intermediaries or layered structures are involved, third-party due diligence can identify control and affiliations hidden behind the immediate investor.

These are draft thresholds, not a current or final filing test.

How the Proposed Review Could Affect Deal Timing

The September draft contemplated review before closing. The process was described as lasting up to 90 calendar days after a filing was formally accepted. A completeness assessment could take up to 60 days within that period, and an investor could receive up to 20 days to correct deficiencies.

The authority could also request information from other state bodies. The exact interaction between completeness checks, information requests and the overall review period requires further legislative clarification. Parties should therefore avoid treating 90 days as a guaranteed maximum when setting a long-stop date.

The draft also linked FDI screening to Ukrainian merger control. The Antimonopoly Committee of Ukraine would not approve a qualifying concentration or concerted practice until the investor obtained an FDI decision or confirmation that screening was unnecessary. A merger filing submitted without the required screening document could be rejected or suspended.

If this structure survives, investors may face two separate reviews: one for competition and another for national security. Transaction documents will need to allocate responsibility for both processes, information requests, remedies, timing extensions and the risk of refusal.

What Consequences Did the 2025 Draft Propose?

Draft Law No. 14062 contemplated material consequences for closing without approval. These included possible invalidation of the transaction, restrictions on voting and dividends, and a fine of up to 50 per cent of the investment’s value. It also proposed continuing obligations to report ownership changes and submit annual reports.

None of these draft sanctions currently operates as a general FDI-screening penalty. Existing sanctions rules, merger control, licensing requirements, land restrictions, privatisation rules and sector-specific controls continue to apply independently. A deal that does not yet require FDI clearance may still be restricted under another legal regime.

Why the Immediate Shareholder Is Not Enough

An FDI analysis can fail before the filing form is opened. The first shareholder shown in a register may be a holding company, fund vehicle or nominee that reveals little about the person supplying the capital or exercising control.

A defensible review maps the entire ownership and influence chain. This includes beneficial owners, affiliated entities, state participation, sanctions exposure, political connections, side agreements, veto rights, financing conditions and lender step-in rights. For a fund, the analysis may also need to distinguish the general partner, investment manager, anchor investors and limited partners with unusual governance rights.

The target requires the same scrutiny. Analysts should identify the licences, land, technology, protected information, critical contracts and assets that place the business within a sensitive sector. They should also test whether subsidiaries or related parties perform activities absent from the target’s public profile.

This work does not determine the legal outcome of an FDI filing. It gives counsel and the transaction team a documented ownership and control picture on which to base that analysis. An unexplained link discovered after signing can alter the filing strategy, timetable and allocation of risk.

How Investors Can Prepare Before the Law Is Adopted

Foreign investors considering a Ukrainian transaction can take six steps now.

1. Map the Transaction

Record the direct and indirect acquisition path, voting rights, board appointments, vetoes, options, convertible instruments, asset transfers and land rights. Review side letters and financing documents that may confer influence outside the main purchase agreement.

2. Verify Ownership and Capital

Identify each entity and beneficial owner in the investment chain. Trace state links, sanctions exposure, adverse regulatory history and the source of funds. Before relying on the disclosure package, independently check the company in Ukraine.

3. Inventory Sensitive Assets

Establish which licences, technologies, datasets, facilities, contracts, mineral rights and infrastructure the target owns or operates. Confirm whether the business handles military or dual-use goods, even if defence is not its primary sector.

4. Coordinate Regulatory Workstreams

Assess FDI exposure alongside merger control, sanctions, export controls, sector licences, land restrictions and data-security requirements. Clearance under one regime will not necessarily resolve another.

5. Build the Risk into Transaction Documents

Define filing responsibility, cooperation duties, access to information, acceptable remedies, long-stop dates and termination rights. If the law changes between signing and closing, the agreement should state who carries the resulting delay and cost.

6. Monitor the Legislative Record

Track both bills, committee revisions, government guidance and implementing acts. Reassess the transaction when the sector list, thresholds, authority or commencement date changes. Wider risk management services may be needed where sanctions, political exposure or the security environment could affect the deal after approval.

FDI Screening Is Not a Substitute for Due Diligence

A government review asks whether the investment could threaten national security or public order. Buyer due diligence asks different questions about ownership, litigation, sanctions, reputation, financial conduct and operational risk.

Clearance would not confirm that a partner is commercially reliable. A private investigation would not replace a mandatory filing once the regime enters into force. Investors need both legal analysis and evidence that can withstand review.

Ukraine has not yet settled the final FDI-screening model. The likely direction is a formal system focused on sensitive sectors, control and the origin of capital. Investors that map ownership, influence and strategic assets before signing will be better placed to respond when the filing rules become law.

Molfar Intelligence provides due diligence services for investors assessing Ukrainian targets, ownership networks, state links, sanctions exposure and strategic-asset risk before capital is committed.