On April 5, 2015 the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine on Simplifying Business Practices (Deregulation)” (the “Law”) entered into force in its main part. The law aims to deregulate (remove regulatory barriers) business activities, to bring Ukrainian laws in line with EU requirements in the agricultural sector, in economic activities involving production and circulation of organic agricultural products, exploration works, works with pipeline transport facilities and the construction of oil and gas wells.

The Law simplifies the procedure to establish a business entity and carry out business activities, reduces the number of licenses and permits as well as licensing and conciliation procedures, restricts the influence of state authorities on business entities and increases investors’ rights protection.

The Law also eliminates some licensing centers and stipulates that administrative services in respect of issuing licenses and permits in the field of business activities shall be provided through centers for the provision of administrative services. It also strengthens the liability of the administrator for failure to perform his/her official duties and significantly shortens the terms for the provision of administrative services in the field of state registration of legal entities and individual entrepreneurs. In particular, the state registration of a legal entity must be completed on the day the documents are received, and in the case of an individual entrepreneur, no later than the next business day after the documents have been received.

The Law abolishes the requirement for the state registration of a commercial concession agreement.

The requirement to publish the resolution of founders (participants) of a legal entity, the court or the authority empowered by them, on the termination of the legal entity in a specialized printed mass media is replaced by the requirement to publicize such resolution on the official website of the Ministry of Justice of Ukraine.

The Law introduces the exchange of information between the Unified State Register and information systems of the state authorities, exchange of documents in electronic form, i.e. the obligation to transfer the electronic data as provided for by law to the information systems of other state authorities is imposed on the state authorities rather than on a legal entity or an individual entrepreneur. The requirements to publish in a specialized printed mass media are replaced by the requirement for publication on the official website of the Ministry of Justice of Ukraine.

The Law introduces open access to the data of the Unified State Register as of the date of the request and as of the specified date through the official website of the Ministry of Justice of Ukraine by way of search, view, copying and printing.

The Law introduces changes by which local governments, administrators of administrative services centers and notaries are granted broader powers in respect of receipt and issue of documents in the field of the state registration of rights to immovable property; it also stipulates that in certain cases a notary as a special subject is entrusted with the functions of the state registrar of rights to immovable property.

The number of essential terms and conditions of a lend lease agreement has been reduced significantly (Article 15 of the Law of Ukraine “On Land Lease”), namely from eleven to three. This significantly simplifies the conclusion of land lease agreements. In particular, the essential terms and conditions of a land lease agreement are now only as follows:

  • Leased property (cadastral number, location, area of the land plot)
  • Term of lease
  • Rental fee with the indication of its amount, indexation, settlement procedure and conditions, term, the procedure for payment and revision and liability for failure to pay

Other terms and conditions may be included by consent of the parties. A lease agreement shall be accompanied by an agreement on compensation of the lessee’s expenses incurred in connection with protecting and improving the leased property, if such measures are stipulated by the lease agreement.

Mandatory annexes to a land lease agreement have been excluded.

A leased land plot is now deemed to be transferred from the moment of the state registration of the lease.

The provision on the form of rental fee has been changed. Now it may be either in the form of money or in kind. In case of state and municipal property, only monetary form is determined.

The Law clearly provides for the possibility to lease several land plots owned by one and the same lessor or being at the disposal of one and the same executive authority/local governmental authority under one and the same lease agreement.

The Law establishes that the term of land plot lease for the purposes of: (1) commercial agriculture, (2) farming and (3) personal subsidiary farming, may not be for less than seven years.

The Law introduces amendments which enable the use of land plots designated for personal subsidiary farming for the purposes of (1) personal subsidiary farming, (2) commercial agriculture, (3) farming and (4) to lease land plots designated for personal subsidiary farming to individuals and legal entities.