Ukraine is cautiously advancing with economic reforms, especially in governance and institutional appointments, and nurturing investor interest despite ongoing challenges, according to Avellum Managing Partner Mykola Stetsenko. Key sectors like defense and state-owned enterprises are evolving, while the legal market is becoming more professional and dynamic.
“There’s been an uptick in activity across all practice areas, but the most encouraging change is that transactional work is finally picking up,” Stetsenko notes. “International investors are showing more interest, while the local market has remained active. The finance practice is busy, and disputes and tax work are also strong, some driven by ongoing legacy matters, others by new developments.”
One of the main drivers, according to Stetsenko, is the new government. “While it’s not an entirely new political force – the prime minister was formerly the deputy prime minister – the administration appears determined to push forward reforms that were previously stalled. The prior government’s focus was on economic survival, but now the emphasis seems to be on reconstruction and progress, especially along the EU accession path. The government is drafting a plan to accelerate that process, and although the agenda isn’t yet fully clear, its communication with the business community on regulatory improvements has been generally positive.”
That said, Stetsenko reports that the last month brought some worrying moments. “An attempt to restructure the anti-corruption authority was met with strong resistance from the business community and international donors, ultimately halting the move – but the fact that it happened at all sent the wrong signal,” he says. “Similarly, the government delayed appointing the head of the Economic Security Bureau of Ukraine, despite the candidate passing all checks. These mixed signals, declaring a commitment to reforms while dragging out key institutional changes, have been a recurring frustration for business.”
“Predictability remains a challenge, and everyone is waiting for the war to end, which would be transformative for Ukraine’s economy,” Stetsenko adds. “Still, the domestic economic engine is functioning. We’re seeing new production capacity, some road construction projects, and clear signs of recovery. The defense sector remains the main focus, with significant government funding flowing in – but that also creates corruption risks. After years of struggling to make defense procurement more efficient, the government has opened the door to private companies, which has spurred innovation in drones and other equipment. The ‘Danish model,’ in which foreign governments directly fund Ukrainian production and keep the equipment in the country, has become a successful approach, with the Dutch following suit. This has attracted both foreign companies and venture capital to local defense startups, leveraging both Western and Ukrainian technologies for potentially game-changing results – though strict export controls remain in place.”
“State-owned enterprises have also seen notable progress, with professional management teams appointed and major corporate governance reforms implemented,” Stetsenko continues. “This could set the stage for a revitalized capital market and potential IPOs once the war ends. The government’s seriousness on this front is encouraging, especially with companies in strategic sectors like oil and gas, such as Ukrnafta and Naftogaz.”
Within the legal profession, there’s also a shift, Stetsenko says. “More firms are adopting a US-style model for recruiting interns – structured selection processes that lead to permanent contracts for the best candidates. This professionalization, along with closer collaboration between law firms and universities, signals a maturing market that’s investing in the next generation of lawyers.”
