Ukraine adopts new procedure for borrowing and guarantees for state-owned companies

On 26 August 2025, the Cabinet of Ministers of Ukraine (CMU) adopted Resolution No. 1050, which approves a new procedure for authorising external, domestic long-term (i.e. over one year) and short-term (i.e. up to one year) borrowing, and providing guarantees and suretyships by state-owned enterprises and companies (other than banks) in which the state holds 50% or more of shares (SOEs).

The Resolution entered into force on 2 September 2025 substituting the legal framework previously governed by Resolution No. 809 of 15 June 2011.

The new procedure updates the distribution of approval powers, clarifies documentation requirements, introduces digitalisation of document flow, and shortens the timeframes for decision-making, thereby modernising the process of SOE’s borrowing and enhancing financial oversight.

Definitions of borrowing

The Resolution defines the following types of SOE borrowing:

• External borrowing – loans from non-residents or issuance of corporate bonds on international capital markets;
• Domestic long-term borrowing – loans from resident banks or financial institutions, or issuance of corporate bonds with maturity exceeding one year;
• Domestic short-term borrowing – loans from resident banks or financial institutions, or issuance of corporate bonds with maturity up to one year.

The Ministry of Finance of Ukraine is the authority that grants approval for external and domestic long-term borrowing.

Domestic short-term borrowing are approved by either the relevant state executive agency managing state property or a specifically designated authorised state agency, which may include:

• Ministry for Development of Communities and Territories of Ukraine – for JSC Ukrainian Railways;
• Ministry of Defence of Ukraine – for JSC Ukrainian Defence Industry;
• Ministry of Economy, Environment and Agriculture of Ukraine – for other SOEs managed by the CMU.

Changes in approval of transactions

The Resolution revises the list of documents required for approval. Specifically, the changes are as follows:

• the requirement to provide an extract from the Unified State Register was abolished.
• approval by the Authorised State Agency of borrowing terms is submitted to the Ministry of Finance only in relation to external and domestic long-term borrowing.
• the Authorised State Agency directly approves domestic short-term borrowing without subsequent submission to the Ministry of Finance.
• the Ministry of Finance must obtain the economic justification for the transaction from the Ministry of Economy. This justification is based on:
  • analysis of the SOE’s financial standing and borrowing terms;
  • verification that the SOE’s financial plan reflects proposed borrowing and repayments;\
  • assessment of interest rates against the National Bank of Ukraine key policy rate and market averages; and
  • evaluation of alignment between borrowing purposes and the SOE’s development objectives.

Material amendments to external and domestic long-term borrowing still require the approval of the Ministry of Finance. These include changes in:

• purpose, amount, or term of borrowing;
• type of security;
• interest rates and fees;
• contractual obligations, rights and liabilities;
• proposals for debt restructuring.

The approval requirement does not apply where amendments reduce interest rates or financial liabilities (e.g. penalties, default interest). In such cases, an SOE must notify the Ministry of Finance within 20 business days.

Updated timeframes and digitalisation

The timeframe for decision-making by the Ministry of Finance or an Authorised State Agency has been reduced to 20 business days from 30 business days.

The SOEs may now submit documents for approval in paper or electronic form. Electronic submission must be executed using a qualified or advanced electronic signature.

The new procedure under the Resolution enhances clarity, expedites approvals, and embeds greater digitalisation into the borrowing process of SOEs while maintaining oversight through the Ministry of Finance and Authorised State Agencies.

For more information on the Resolution and the Ukrainian financial sector in general, contact your CMS client partner or the CMS experts who wrote this article: Ihor Olekhov, partner, Yaroslav Pavliuk, associate.