Concession Agreements in Ukraine: A Guide for Investors

Ukraine’s infrastructure needs are creating new opportunities for international investors. From ports and roads to utilities, the government offers long-term access to public assets under transparent conditions. For those seeking stable returns with legal safeguards, concession agreements in Ukraine offer a reliable model. This guide explains how they work, what the law provides, and what investors should know before entering the market.

Understanding Concessions in the Ukrainian Legal Context

For foreign investors in infrastructure, concession agreements in Ukraine provide a structured legal path to participate in public development while the state retains ownership. The private party — the concessionaire — gains the right to operate or upgrade the asset in exchange for fulfilling long-term responsibilities.

This model is a form of public-private partnership, regulated by dedicated legislation aligned with EU standards. Both sides share risks, responsibilities, and results, creating a framework that protects public interests while enabling private capital involvement.

What Is a Concession Agreement?

A concession agreement is a long-term government contract giving a private party exclusive rights to develop or operate public infrastructure.

The concessionaire invests, collects user fees, and may pay the state a fixed fee or revenue share. Ownership remains with the government.

For example, a company may receive rights to modernize a cargo terminal in Odesa, operate it for 30 years, and return it in working condition. This structure is commonly used in concession agreements in Ukraine, enabling upgrades without direct public spending.

Types of Concessions under Ukrainian Law

Ukraine allows concessions in multiple sectors. Key examples include:

• Ports and logistics: Projects like the Ukraine port concession in Olvia and Kherson have attracted foreign investment.
• Highways and roads: Toll roads are legal under Ukrainian concession law, with key routes under study.
• Municipal services: Concessions cover water, public transport, and waste systems.
• Energy and transport hubs: Public-private projects are emerging in renewables and intermodal facilities.

All follow a single legal framework, ensuring consistency and comparability.

Difference Between Concession and Privatization

Concessions and privatization both involve the private sector, but differ fundamentally. In privatization, ownership transfers permanently. In a concession, the state retains ownership, while the investor holds time-limited, protected rights. Concession agreements in Ukraine offer a lower-risk path to infrastructure participation without complete asset control.

Legal Framework Governing Concessions in Ukraine

The 2019 Law on Concessions

The legal foundation for concession agreements in Ukraine is the 2019 Law “On Concessions.” It unified fragmented legislation, introduced public tender rules, and brought Ukrainian law closer to EU practice.

Key principles include:

• Competitive concessionaire selection;
• Defined obligations and risk allocation in each government contract;
• Options for international arbitration;
• Stabilization clauses for contract terms.

These reforms enabled Ukraine to launch successful projects, especially in the Ukraine port concession sector.

Recent Legislative Changes

Ukraine continues improving its legal framework. Draft Law No. 7508 suggests:

• Viability gap funding for concessionaires;
• Shorter timelines before tender;
• Clarified procedures for availability-payment models;
• Stronger lender rights.

These updates aim to simplify entry and encourage foreign investment in Ukrainian concessions.

The Concession Process: Step-by-Step for Investors

Project Identification and Preparation

Projects can be initiated by the state or by private investors. In the latter case, proposals include feasibility studies and draft concepts, often linked to public-private partnership models. Once accepted, authorities prepare the legal and technical base, often with the support of advisors.

Public Tender and Concessionaire Selection

Every project is awarded via open tender. Evaluation includes technical capacity, financial terms, and project approach. In complex cases, a competitive dialogue format may be used. The winning bidder must form a Ukrainian entity — the concessionaire — before signing.

Signing the Concession Agreement

Key terms in the government contract include:

• Concession term (20–35 years);
• Investment and service standards;
• Reporting, tariffs, and compliance rules;
• Termination and compensation terms;
• Stabilization and arbitration clauses.

Where financing is involved, tripartite agreements with lenders are common.

Implementation, Control, and Termination Clauses

After signing, the concessionaire begins work — construction or operations, depending on the asset. Authorities monitor milestones. Contracts include clear termination clauses — protecting both sides in case of underperformance, force majeure, or breach of obligations.

Legal Due Diligence and Risk Mitigation

Before entering a project, investors should assess asset ownership, licensing, environmental risk, and permit status. Contract review is equally important: key areas include risk allocation, penalties, and termination procedures. Strong legal review ensures that concession agreements in Ukraine are enforceable and balanced. Counsel also helps manage external risks, such as construction delays or regulatory changes, by building protective clauses into the contract.

Robust legal support for concessions in Ukraine, along with financial and technical expertise, strengthens operational stability and project resilience.

Foreign Investment in Ukrainian Concessions

Guarantees and Protections for Foreign Investors

Ukraine positions itself as an open market for global infrastructure players, including strong legal protection for external capital. The current legal framework is designed to provide predictability, profitability, and enforceable guarantees for long-term partnerships.

Foreign firms enjoy equal rights under Ukrainian concession law. Protections include:

• Legal safeguards against expropriation;
• International arbitration access;
• Stabilization clauses in contracts;
• Transparent rules on ownership structure.

These ensure that foreign investment in Ukrainian concessions remains legally secure.

Currency Control, Repatriation of Profit, and Taxation

While martial law temporarily limited outbound transfers, Ukraine has resumed the gradual liberalization of foreign exchange. Investors can now repatriate dividends (subject to limits), convert local profits to foreign currency, and withdraw capital upon project exit.

Key points include:

• Profits from a concessionaire’s operations are subject to 18% corporate income tax.
• Withholding tax on dividends applies but can be reduced via treaties.
• VAT on imported equipment and construction services may be creditable.
• Ukraine offers additional support through investment incentive programs.

These fiscal rules, combined with access to international banking and a stable regulatory environment, give foreign concession partners practical tools to plan long-term.

Why Legal Support Is Crucial in Concessions

Success in concession agreements in Ukraine depends not only on capital but also on execution. Investors face complex procedures, evolving rules, and high-stakes contracts — legal missteps can cost years. Therefore, legal support for concessions in Ukraine is critical at all stages. Advisors help structure bids, negotiate fair contract terms, manage risk, and ensure compliance. With the right team, you avoid delays, protect your investment, and enforce your rights when needed.

How Intermarium Legal Can Help with Concession Projects in Ukraine

At Intermarium Legal, we advise international investors and infrastructure operators on navigating the legal and procedural landscape of concession agreements in Ukraine. Our team has hands-on experience with port terminals, logistics assets, road infrastructure, and public utility projects — from early-stage structuring to contract execution.

We support our clients at every stage:

• Pre-bid preparation and strategy: We guide investors through eligibility requirements, documentation for public tender participation, and the formation of local concessionaire entities.
• Due diligence and risk review: Our lawyers evaluate land rights, regulatory compliance, licensing status, and potential legal obstacles before you commit resources.
• Contract review and negotiation: We scrutinize every clause, from performance standards to early termination risks, and advise on amendments or reservations that protect your interests.
• Legal structuring and compliance: We help set up operational frameworks that align with Ukrainian law while optimizing for transparency and control. Our Tax Advisory & Structuring team ensures that local obligations are met without compromising international efficiency.
• Post-signature legal support: From change order reviews to regulatory filings, we act as long-term counsel throughout the project lifecycle.
• Dispute prevention and resolution: If conflicts arise — whether with state bodies or project stakeholders — we provide strategic advice and representation, including before international arbitration forums.

Intermarium Legal offers interpretation of Ukrainian concession law and practical guidance to ensure successful implementation. Our firm is committed to supporting your investment with long-term legal and strategic insight.

Conclusion

Ukraine’s infrastructure needs and legal reforms have created strong momentum for public-private partnerships. With transparent tender procedures and tested legal tools, concession agreements in Ukraine are increasingly attractive for foreign investors. But timing and preparation are key. If you're ready to act, enter with clarity, structure, and a legal partner who knows the terrain.

FAQ

Can foreign investors participate in Ukrainian concession projects?

Yes. There are no nationality-based restrictions. Foreign companies can fully participate in tender processes. The only requirement is to register a Ukrainian legal entity before signing the concession agreement.

What role do legal advisors play in concession deals?

Legal advisors help structure offers, review contracts, and manage risks. Their role spans pre-bid planning, negotiation, compliance, and dispute resolution, making them essential for long-term success in foreign investment in Ukrainian concessions.

Is public tender participation mandatory for concessions?

Yes, in nearly all cases. Ukrainian concession law requires open or competitive dialogue tenders. Exceptions are rare and narrowly defined.