Despite the ongoing war, Ukraine’s legal and investment landscape continues to evolve, with shifting trends in M&A, infrastructure, and technology-driven sectors, according to EY Law Partner Bogdan Malniev who also reports renewed interest in logistics, defense technology, and corporate governance reforms.
"The Ukrainian legal market is directly shaped by geopolitical developments," Malniev begins. "Over the past few years, the war and its ripple effects have dictated investment trends – naturally, when the war broke out in 2022, private investments largely came to a halt; there was a period of near-total stagnation. However, activity has gradually resumed, though it has come in waves, influenced by broader economic and security conditions."
Looking at M&A activity specifically, Malniev reports that the second half of 2024 was noticeably quieter, with investors "once again pausing to assess how the war would unfold. But now, we are seeing renewed interest, and there’s a real buzz in certain sectors – whether this translates into deals remains to be seen, but for now, there is a steady flow of corporate work and even an uptick in some areas." According to him, this suggests that despite the challenges, there is a sustained interest in investing in Ukraine.
Focusing on specific areas of note, Malniev indicates that "one sector that could become increasingly active is real estate, particularly real estate-heavy infrastructure projects. Naturally, this is limited to central and western Ukraine, far from active conflict zones." He reports that there is "growing interest in logistics, warehousing, and major transportation infrastructure, including port concessions. These are long-term investments that reflect confidence in Ukraine’s future integration with European supply chains."
On the other hand, IT investments have slowed considerably, Malniev reports. "At the beginning of 2024, there was a marked drop in IT-related deals. That said, I expect a shift in focus: instead of purely software-driven businesses, we may see a pivot toward hardware manufacturing and integration technology – essentially, projects that tie into Ukraine’s alignment with EU industries." Moreover, he says that defense technology is another area where growth is expected. "There’s notable interest in UAVs, control technologies, transport vehicles, and components that aren’t purely military but have civilian applications as well. Scalable, dual-use technologies – those with both military and civilian functions – are becoming increasingly attractive investment targets," he explains.
Additionally, Malniev reports that agriculture has been quieter than expected. "Ukraine has long been home to some of the largest agricultural holdings globally. These businesses have traditionally been difficult to invest in due to their structure, and for now, there are no clear signals of renewed investment. However, should the geopolitical situation improve, this could quickly change, as agriculture remains one of Ukraine’s strongest industries."
Finally, talking about legislative updates, Malniev says that there have been notable changes in corporate governance, particularly concerning state-owned enterprises. "Ukraine still has thousands of state-owned enterprises, many of them remnants of the Soviet era. While the most promising ones have been privatized, many still need corporate governance reforms to become viable investment opportunities." As he puts it, the legislative agenda has been actively addressing this, with ongoing discussions about privatization strategies and governance improvements. "These reforms are crucial for attracting foreign investment and improving operational efficiency. As for industry-specific regulations, key sectors have not seen significant amendments, however, defense technology regulations remain a major question mark." One critical issue Malniev stresses is whether the restrictions on the export of domestically produced weapons are lifted. "If this happens, Ukrainian defense companies could become far more attractive investment targets. That said, this is likely a decision for the future rather than an immediate policy shift."
