How Venture Investors Close Deals in Ukraine: An Analytical Review by Intermarium

The Ukrainian DeepTech Market: Opportunities and Challenges for Venture Capital

Ukraine has emerged as a dynamic hub for innovative startups across sectors such as DeepTech, AI, FinTech, AgriTech, and CleanTech. Successful companies like Grammarly, GitLab, People.ai, and Preply have proven the country’s potential to scale globally and attract international capital. However, foreign venture investors still encounter legal, tax, and operational challenges that complicate transactions and create barriers to market entry.

This article explores how venture deals are structured in Ukraine and what legal strategies are essential for mitigating risks and securing long-term value.

Corporate Structuring: A Fundamental Obstacle

Many Ukrainian startups begin as local Limited Liability Companies (LLCs), which lack a share-based structure. This limits investors’ ability to acquire equity and makes corporate governance and exit strategies less transparent. Startups frequently operate without formal shareholder agreements or defined responsibilities between founders.

To overcome these issues, venture investors typically require the startup to migrate to a more favorable legal jurisdiction. Common options include Delaware (USA), the UK, the Netherlands, or Estonia—each offering investor-friendly regulation and robust legal frameworks for equity-based financing. This corporate restructuring is usually accompanied by the creation of holding companies and legally binding shareholder agreements to support governance and investor protection.

Intellectual Property (IP): Securing the Core Asset

In technology startups, the value is often concentrated in IP. Yet in many Ukrainian companies, ownership of code, products, and ideas often remains with individual developers or freelancers.

For investors, securing full ownership of IP is critical. This involves legal due diligence to verify IP rights, formal assignment of IP to the holding entity, and proper registration of trademarks and patents in relevant jurisdictions. Failure to resolve IP issues in time can derail funding rounds or create legal disputes post-investment.

Tax and Capital Flow Challenges

Ukraine’s tax system poses several obstacles for venture deals. Capital gains taxes, limitations on foreign currency operations, and evolving rules around digital assets and crypto transactions add complexity to structuring returns.

Many investors mitigate these risks by using investment tools like convertible notes or SAFE agreements. These instruments delay equity conversion and provide tax flexibility. Incorporating the holding company in jurisdictions like Estonia, which offers deferred taxation on reinvested profits, also helps reduce exposure. Special Purpose Vehicles (SPVs) are often used to streamline fund management and minimize tax liabilities.

Protecting Investor Interests

Given the early-stage nature of most Ukrainian startups, investor protection mechanisms are crucial. International investors typically require robust shareholder agreements that define voting rights, liquidation preferences, vesting schedules, and conflict-resolution processes. These clauses ensure alignment between founders and investors, particularly in exit scenarios or when the company seeks additional rounds of funding.

Final Thoughts

Ukraine’s innovation ecosystem holds immense promise for venture capital. However, successful investment requires more than vision—it demands legal precision. Structuring ownership properly, securing IP, managing taxes, and protecting capital are non-negotiable steps in closing a safe and scalable deal.

At Intermarium, we assist both startups and investors in preparing for and executing venture transactions. From choosing the right jurisdiction to designing an investment-ready corporate structure, our legal team offers end-to-end support to protect your business and growth strategy.