What 2024 Brought for Business: Legislative Changes and Future Trends
The year 2024 has brought a series of changes to the legal and industrial landscape, making it essential for businesses to adapt to new conditions and anticipate their impact on operations.
Partners of the LCF Law Group have outlined the key developments that took place in 2024. Evidently, these trends will remain significant in the upcoming year, 2025.
Corporate Law
“The total volume of announced and completed deals — broadly encompassing corporate transactions, venture capital investments, privatization, and the sale of collateral assets — amounted to approximately $1.2 billion in 2024. This underscores the continued M&A activity in Ukraine despite the ongoing war,” emphasized Sergiy Benedysiuk, Partner, Head of Corporate, M&A, and Antitrust.
Foreign investors acquired Ukrainian assets worth $473 million in the first nine months of 2024, marking an increase of $278 million compared to the same period in 2023. Approximately 60% of these investments were directed toward the IT sector, reflecting strong confidence in its potential. Beyond IT, foreign investors have also shown interest in the agricultural sector and renewable energy, with our team providing legal support for such transactions.
The analysis further revealed that in 2024, Ukrainian companies closed 10 major deals involving the acquisition of foreign assets. This underscores the growing competitiveness of national businesses on the international stage.
Additionally, 2024 saw significant progress in the digitalization of corporate law, a trend expected to impact 2025. The National Securities and Stock Market Commission simplified shareholder participation in general meetings by enabling online meetings during martial law. This reform has made corporate governance more accessible and convenient.
Moreover, Law No. 3587-IX came into effect, introducing positive changes in the corporate governance of state-owned enterprises. The law aims to enhance transparency and management efficiency—particularly by expanding the powers of supervisory boards. It also grants the government the authority to determine which enterprises should remain state-owned and which should be privatized based on their strategic importance.
Changes in the taxation system
“At the outset of the war, a moratorium on tax audits was introduced. However, it has gradually been lifted for various taxpayers and types of audits. Currently, almost all taxpayers can be included in the audit plan, except for those whose tax address is located in temporarily occupied territories or active combat zones. Therefore, in 2025, taxpayers should proactively prepare for potential audits,” noted Andriy Reun, Partner, Head of Tax.
“Another challenge is the inefficiency of the tax invoice suspension system. The introduction of the Risk Monitoring System has faced significant criticism. In practice, the tax authorities often substitute proper audits by simply blocking tax invoices and demanding excessive documentation. Many invoices are suspended without legitimate grounds, as evidenced by statistics: in 2024, 72% of disputed invoices were successfully reinstated. Therefore, it is crucial to ensure proper documentation and promptly provide explanations in case of suspension to facilitate unblocking.
The lack of a clear procedure for confirming the acquisition or loss of tax residency is another issue businesses must navigate. While the Tax Code defines the criteria for determining an individual’s tax residency, this does not guarantee that Ukrainian tax authorities will recognize residency established in another jurisdiction.”
Energy projects
“In 2024, Ukraine’s energy sector faced several unprecedented challenges resulting from the consequences of the terrorist state’s military aggression. Last year, the electricity deficit for consumers reached approximately 35%, while costs increased by 34%. These factors are shaping the future trajectory of the industry,” commented Ivan Bondarchuk, Partner, Head of the Energy and Projects.
“In addition to investing in their own energy independence, a significant number of companies have started constructing power plants to operate in the electricity market. In total, NPC Ukrenergo has issued technical conditions for connecting over 1.2 GW of distributed generation capacity, including gas piston power plants, small-scale solar power plants (SPPs), wind power plants (WPPs), and other renewable energy sources (RES). If implemented, the total investment volume in such projects will far exceed $1 billion. Notable investors entering the electricity market include Epicenter, Nova Poshta, and UPG. In 2025, NPC Ukrenergo will hold a tender for new generation capacities to provide additional funding for investors to develop flexible generation projects ranging from 5 MW to 80 MW.
Additionally, 2024 saw increased activity in the development market for utility-scale renewable energy projects. OKKO announced its investment in wind energy projects in western Ukraine, while Wind Parks of Ukraine has been actively commissioning new turbines. In December 2024, we concluded work on one of the largest transactions of the year, under which Elementum Energy acquired a 200 MW wind power project.
To further stimulate industry growth, we anticipate increased involvement from global institutional players who are considering financing projects at the development stage, later entering them through agreements for the purchase and sale of corporate rights with suspensive conditions, options, or debt-to-equity conversions. To accelerate this process, the state must offer investors tools to mitigate wartime, political, and market risks—such as insurance and power purchase guarantees—while developers must provide a high-quality portfolio of projects strictly aligned with national legislation and international standards, enabling them to swiftly pass due diligence by international investors or financial institutions.”
Bankruptcy and Restructuring
“The conclusion of settlement agreements has become a noticeable trend. Bankruptcy proceedings in Ukraine have often resembled a battle between debtors and creditors—debtors sought to avoid debt repayment, while creditors aimed for a swift recovery of their funds. However, the war has reduced the appetite for protracted disputes, and in our practice, we are observing a shift toward negotiations and settlements in cases that have been ongoing for at least five years,” explains Olena Volianska, Partner, Head of the Bankruptcy and Restructuring.
A significant change in the field of bankruptcy is the introduction of preventive restructuring. In 2024, Law No. 3985-IX finally implemented the pan-European preventive restructuring framework in Ukraine. This mechanism allows businesses facing temporary financial difficulties to undergo financial recovery without initiating formal bankruptcy proceedings.
Another notable trend is the increased liability of business owners and executives for insolvency. Previously, enforcement proceedings were often delayed due to differing approaches to calculating damages. However, in 2024, the Supreme Court established a clear precedent: damages should be determined as the total amount of outstanding creditor claims after the bankrupt entity’s assets are auctioned.
The “corporate veil lifting” doctrine has also become more firmly established. Courts may now impose liability on beneficial owners and interested parties (who, notably, have been stripped of their voting rights), even without a direct connection to the bankrupt entity, if there is sufficient reason to believe they were responsible for decisions leading to insolvency.
Another key development is the expansion of the list of enterprises protected from bankruptcy proceedings. In May 2024, Law No. 3723-IX was adopted, prohibiting the bankruptcy of critical infrastructure facilities, companies where the state holds more than 50% of shares, and enterprises that were nationalized through share expropriation during martial law.
Litigation
“Integrity and effective management are becoming key standards of corporate culture and are attaining the status of legally mandated requirements for top management. Managers are personally accountable for their actions, particularly in instances where decisions were unjustified or manifestly imprudent. Judicial practice is actively evolving towards awarding damages for losses incurred as a result of such actions. To evaluate management decisions, the approach known as the business judgment rule is employed. Currently, this practice is predominantly applied in cases involving the conduct of former bank executives. However, there is every reason to believe that these established approaches will be actively utilized in other sectors as well,” noted Iryna Kobets, Partner, Head of Litigation.
“Another significant trend is the expansion of legal approaches to holding beneficial owners and affiliated parties liable for a company’s debts to third parties. Formal corporate structures that rely on “shell” or “technical” companies no longer guarantee full protection from liability.
Additionally, state control over land and the return of land to public ownership is intensifying. We are witnessing a growing number of legal proceedings initiated by the prosecutor’s office to reclaim land from private ownership back into state possession. The primary focus is on water and forest fund lands, as well as agricultural land.”
International arbitration
“Ukraine’s national policy on confiscation and nationalization of assets linked to the aggressor state has had a significant impact on the field of international arbitration. In 2024 alone, Ukraine faced a series of investment claims amounting to unprecedented sums. For instance, the compensation claim for the nationalization of Sense Bank, filed by Mikhail Fridman, reaches $1 billion.
We anticipate that the number of such investment disputes will continue to rise,” emphasized Olha Kostyshyna, Counsel, Head of International Arbitration.
“Another emerging trend is the search for legal mechanisms to recover damages caused by Russia. Notably, the first investment arbitration case against Russia was initiated concerning losses suffered by Ukrainian private investors following the 2014 occupation of eastern Ukraine. While this case does not directly address damages resulting from Russia’s full-scale armed aggression against Ukraine, its outcome will have a significant impact on shaping arbitral practice in this area.
In 2024, there was a notable increase in specialized funds providing financial support for investment arbitration proceedings, leading us to anticipate a rise in business-initiated investment claims against Russia in the near future.
The most positive development in the recovery of damages from Russia was the opening of the Loss Register to businesses in late December 2024. As of now, legal entities can submit claims for compensation related to the destruction or loss of assets, loss of control over property in temporarily occupied territories, and business relocation (evacuation). However, the approved claim forms and submission rules do not provide a clear list of required evidence to substantiate the claimed amounts. Therefore, businesses must focus on detailing their claims, justifying their valuation methodology, and gathering all possible supporting evidence.”
White Collor Crime
“For criminal justice, 2024 was a turning point in many respects, noted Maksym Sheverdin, Partner, Head of White Collor Crime.
One of the key events of the year was the ratification of the Rome Statute, marking a significant step toward aligning Ukraine with global standards of justice.”
“Another notable trend in 2024 was the increased pressure on businesses from law enforcement agencies, which drew criticism from the business community and became a catalyst for the restructuring of the Bureau of Economic Security.
Among other legal developments was the introduction of plea agreements in corruption cases. Law No. 4033-IX provides that individuals who cooperate with the investigation may receive a reduced sentence or be exempt from serving their sentence, provided they compensate for damages and provide key information to help solve the crime.
Another major change was the elimination of investigation time limits for “fact-based” cases under Law No. 3509-IX. This means that pre-trial investigations in cases without an identified suspect can now continue indefinitely.
Enhanced international cooperation has also become a key trend. In the first nine months of 2024, the number of mutual legal assistance requests increased by 30% compared to the previous year, with extradition requests accounting for a quarter of them. This reflects Ukraine’s growing efforts in international criminal prosecution.”
Partners and Counsels of LCF Law Group, exclusively for Ekonomichna Pravda.
