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Leasing State-owned and Municipal Property in Ukraine: New Improvements

Leasing State-owned and Municipal Property in Ukraine: New Improvements

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On February 1, 2020, the new Law on Lease of State-Owned and Municipal Property (the “Law”) came into force. The Law substitutes the old one that has been in use since 1992 and launches a fundamentally new mechanism for the lease of state/municipal property which aim to:

  • simplify the leasing procedure
  • minimize the potential corruption risks

In particular, the Law introduces the following basic novelties in the leasing procedure:

  • The list of all premises which potentially may be leased, as well as information about the already leased property, relevant prices, main terms and conditions of lease agreements, are now public and will also be available online on the “Prozorro” online platform.
  • The Law establishes 2 different procedures for the lease execution:

The general (main) procedure: all premises must be leased based on an auction, except for the premises that are directly covered by the out-of-tender procedure
Out-of tender procedure: lease of premises by state/municipal authorities and entities, educational and scientific institutions, diplomatic offices, museums, religious organizations (and other similar entities) may be done without an auction; sub-lease of such premises is prohibited

  • All auctions, as well as all communications and document circulation during tender or out-of tender procedures (i.e. applications, resolutions, etc.), will be conducted online through the “Prozorro” online platform;
  • Subject to certain exceptions (i.e. out-of tender procedure, etc.), the lease extension will also be made through an auction;
  • The starting rental price for an auction in most cases will be calculated based on a balance value (as opposed to an independent evaluation);
  • Due to the simplification of the leasing procedure, the total time for the lease execution is expected to reduce by half.

By Gennadii Roschepii, Counsel, and Oleksiy Feliv, Managing Partner, Integrites

Integrites at a Glance

INTEGRITES is a full-service law firm with the head office in Ukraine, offices in Kazakhstan and Russia, and representative offices in Germany, the Netherlands, and the UK.

We provide legal services to companies seeking comprehensive advice on large deals and major disputes, as well as day-to-day operation. INTEGRITES is highly recommended for its cross-border work (whether sophisticated transactions or complex dispute resolution) and for the projects in energy, in particular, renewable.

Our mission is to help companies concentrate on development of their business while we take care of the legal issues. With profound industry-focused expertise, we deliver legal solutions that add value to the business of our clients and help them successfully handle legal challenges.

In 14 years INTEGRITES has served more than 850 clients from around the globe, including Fortune 500 companies and international financial institutions. Clients in our portfolio are recognized leaders in various industries: from manufacturing, pharmaceuticals, and retail to agriculture, logistics, and renewables. Currently 80% of the companies we serve are international.

INTEGRITES has been consistently recognized by the leading international legal directories and rankings: Chambers Global/Europe, The Legal 500 EMEA, Who’s Who Legal, IFLR 1000, Best Lawyers, FT Innovative Lawyers.

All News about, and Legal Analysis by, Integrites can be found here.

Firm's website: www.integrites.com