On 2 March 2015 the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Licensing Types of Business Activities” (the “Law”) which significantly reduced the number of licensable business activities, simplified the licensing procedure as well as determined the licensing authorities and scopes of their powers. On 25 March 2015 the President of Ukraine signed the Law, which is now pending promulgation and will take effect three months thereafter.

The Law introduces a uniform licensing procedure and procedures for drafting and approving licensing conditions, clearly determines grounds for refusing to issue and revoke licenses, and envisages administrative responsibility for officials and officers of licensing authorities for not complying with its requirements.

The number of licensable business activities is reduced from 54 types to 29. The Law establishes that licensing conditions must contain an exhaustive list of documents required to apply for a specific license. Once the Law is in effect, a construction license will be required only for construction of the 4th and 5th complexity categories. A number of other business activities will become non-licensable - such as supply of electrical power  at a non-regulated tariff, centralized water supply and sewage services at a non-regulated tariff, generation, transportation and supply of thermal energy at a non-regulated tariff, extraction of precious metals and precious stones, production of veterinary drugs and preparations; wholesale and retail trade in veterinary drugs and preparations; trade in pesticides and agrochemicals (plant growth regulators only), introduction, importation, exportation of holographic security elements; production of forms of securities, customs brokerage; production, export and import of disks for laser reading systems, matrixes; development, production, sale, repair, modernization and disposal of weapons, military equipment, military weapons and ammunition thereto; trade in liquid biofuels and biogas, digital signature services, industrial fishing in inland waters and rivers, transportation of freight (except hazardous goods) by river, sea, road, rail and air.

At the same time, the Law requires a license to carry out such activities as, in particular, banking activities, financial services (except for professional activities in the securities market), professional activities in the securities market, television and radio broadcasting activities; activities in the field of electric power industry, production and sale of ethyl alcohol, cognac and fruit spirits, alcoholic beverages and tobacco, telecommunication activities, manufacturing of medicinal products, wholesale and retail trade in medicinal products, importation of medicinal products, fire suppression services and works, particularly hazardous substances and waste management, medical practice, tour operator activities, transportation of hazardous cargo by river, sea, road, rail and air transport, international carriage of passengers and goods by road; transportation of oil and oil products by main pipeline, transportation and distribution of natural gas.

The Law aims to significantly simplify the procedure for obtaining licenses, improve business environment in Ukraine and bolster investments in the economy of Ukraine.