Ukraine revives plans for FDI screening in strategic sectors

On 22 September 2025, the Ukrainian Parliament registered draft law No. 14062 “On the Screening of Foreign Direct Investments”. If adopted, this Draft Law would introduce Ukraine’s first mandatory screening regime for certain foreign direct investments, aimed at safeguarding national security and public order and aligning Ukraine with international practice, including the EU’s FDI Screening Regulation.

This is Ukraine’s second attempt to establish an FDI screening regime. A similar draft was registered in 2021 but did not progress due to shifting political priorities and, subsequently, the outbreak of the full-scale war. (See our earlier update here.

The Draft Law is still at an early stage and may change during the legislative process. If adopted, it will take effect six months after publication. Importantly, it would not apply retroactively, and transactions closed before entry into force would remain unaffected. In the meantime, foreign investors should assess whether planned transactions may fall within the FDI’s scope and follow developments closely in anticipation of the new regime. 

Scope of screening

Screening would apply to foreign investments into companies active in:

• critical infrastructure (as listed in the state register);
• extraction of strategic minerals (as designated by the Cabinet of Ministers); and
• military goods or dual-use items.

Filing thresholds

A filing would be required where a foreign investor:

• acquires more than 25% of voting rights;
• secures governance or blocking rights (such as appointment of the sole executive, more than half of a collegial body, at least 25% of a supervisory board, or blocking key decisions); or
• acquires or obtains use of assets equal to 10% or more of the target’s total assets (based on the latest financials).

The draft also contains a broad “catch-all” trigger covering any direct foreign investment into a strategic target, which may be clarified during the legislative process.

Filing process

Filings would be made to the Ministry of Economy, supported by a new advisory Commission made up of representatives of the security services and foreign affairs bodies. Timelines include up to 60 days for a completeness check (with 20 days to remedy deficiencies) and up to 90 calendar days for substantive review.

Outcomes would be the following: approval, conditional approval (e.g. subject to divestment or other mitigating measures), or refusal. Transactions could only be completed once any conditions are met.

Refusal grounds

An FDI transaction cannot be approved if, at filing or within the preceding two years, the foreign investor, its shareholder or UBO has links to an aggressor or occupying state, to sanctioned persons or states, or holds related citizenship or property interests.

Beyond the “hard bars”, the Ministry must refuse clearance where false or incomplete information is provided or where a transaction is deemed to pose a threat to national security, critical infrastructure or vital functions and services.

Interaction with merger control

The Antimonopoly Committee of Ukraine (AMCU) would only be able to clear concentrations after a positive FDI decision. For merger cases pending at entry into force, the AMCU review would be suspended until the FDI outcome.

Ongoing monitoring

Approved transactions would be subject to annual monitoring. Investors would need to:

• submit monitoring data by 31 December of the year following approval;
• pre-notify any ownership-structure changes at least 20 days in advance.

The Ministry would also maintain a restricted-access register of foreign investors.

Enforcement

Sanctions for non-compliance include suspension of voting rights and dividends, invalidity of the transaction, fines of up to 50% of the investment value and possible damages claims. Ministry decisions, including monitoring outcomes, could be appealed in Ukrainian courts.

Next steps

The Draft Law has not yet passed first reading and may be amended significantly before being finalised. CMS will continue to monitor the status of the Draft Law, engage in discussions with market participants and other stakeholders regarding its content, and provide updates in due course. 

Source: Draft Law of Ukraine “On the Screening of Foreign Direct Investments”, registered on 22 September 2025 under No. 14062.

For more information, contact your CMS client partner or one of the authors of this article: Tetyana Dovgan, Maria Orlyk.