On 31 May 2016 the Ukrainian Parliament adopted the draft law “On amendments to some legislative acts regarding the cancellation of mandatory state registration of foreign investments” (the “Law”) in its second reading.
The Law abolishes Article 395 of the Commercial Code of Ukraine, which regulates the procedure regarding state registration of foreign investments and also amends the Law of Ukraine “On the Regime of Foreign Investments”.
In detail, the Law cancels the requirement that foreign investments be state registered, which was previously mandatory in order for foreign investors to enjoy the benefits and guarantees provided under the Law of Ukraine “On the Regime of Foreign Investments” (e.g. prohibition of nationalisation, guarantee of foreign investments return upon termination of investment activities etc.).
Moreover, the final provisions of the Law envisage that documents related to the state registration of foreign investments, which were submitted to the registration authorities before entering into force by the Law, shall be returned to foreign investors or their authorised persons without review, and with a notification on the reasons for their return. The same shall apply to the documents which should be submitted to the State Fiscal Service of Ukraine confirming that foreign investments were received.
After the Law comes into force, foreign investments will have equal rights for benefits and guarantees envisaged by the Law of Ukraine “On the Regime of Foreign Investments”, irrelevant of whether they have been registered or not.
The Law aims to attract foreign investment to the Ukrainian economy by removing discrimination of unregistered foreign investments, introducing statistics accounting of foreign investment and by preventing corruption when registering foreign investments with the state.
The Law shall take effect after signing by the President of Ukraine and official promulgation.
Law: Law of Ukraine “On amendments to some legislative acts regarding the cancellation of mandatory state registration of foreign investments”