Legal Breakthrough in E-sports: International Platform’s Expansion into Ukraine

Our client is a leading global esports platform that organizes international tournaments for professional gamers and teams, ensuring their participation in the most prestigious competitions. The company aimed to establish a foreign representative office in Ukraine, recognizing the country’s rapidly growing esports market, which attracts numerous professional players, teams, and sponsors.

However, entering the Ukrainian market presented multiple legal, tax, and regulatory challenges that could significantly complicate the client’s operations without proper legal support.

Key Challenges

1) Lack of Clear Esports Regulation in Ukraine

Although esports is officially recognized as a sport in Ukraine, the regulatory framework for tournament platforms and prize fund distribution remains fragmented. This created risks related to licensing, taxation, and foreign currency control.

2) Taxation of Player Payments and International Financial Transactions

The platform paid prize money, contracts, and appearance fees to esports players across different jurisdictions, which could lead to double taxation or foreign exchange control issues.

3) Structuring Business Operations in Ukraine

The client had to decide the most efficient legal form to operate in Ukraine—whether through a subsidiary, a representative office, or partnerships with local entities. Each option carried different legal and tax implications.

4) Licensing & Compliance with International Standards

As the platform handled large financial transactions, it was crucial to ensure compliance with international financial monitoring and AML regulations to mitigate the risk of sanctions or regulatory restrictions.

Intermarium’s Solution

To ensure a legally sound and financially efficient market entry, our team developed a comprehensive expansion strategy, including several key steps:

1. Legal & Tax Risk Assessment

• Conducted an in-depth review of Ukrainian laws related to esports, online gaming, and licensing for digital platforms.

• Identified the optimal corporate structure that would allow the client to operate without excessive tax burdens.

• Evaluated foreign exchange control risks and AML compliance related to international transactions.

2. Establishing the Optimal Legal Structure

• Registered a subsidiary in Ukraine, enabling the company to operate, sign contracts, and engage with local players and partners.

• Developed a contractual framework between the Ukrainian entity and the client’s headquarters to facilitate seamless financial transactions.

3. Tax Optimization Strategy

✔ Proposed an optimal tax structure for prize fund payouts, eliminating the risk of double taxation for Ukrainian players.

✔ Developed a legally compliant payment processing model, ensuring smooth cross-border transactions.

✔ ️ Identified the most tax-efficient structure for the company’s income in Ukraine, resulting in a 30% reduction in tax burden.

4. Licensing & Compliance with International Standards

• Prepared a full set of licensing documents required for operations in Ukraine.

• Conducted a legal audit of financial transactions to ensure full compliance with international AML regulations.

Results

✔ Successful market entry in Ukraine, with a legally established local entity operating without regulatory barriers.

✔ 30% tax reduction through strategic corporate structuring and financial planning.

✔ ️ Legally compliant prize payouts for esports players, preventing double taxation and currency restrictions.

✔ Full AML compliance, ensuring uninterrupted operations and protection from regulatory sanctions.

✔ Strategic roadmap for further expansion in Eastern European markets.

This case demonstrates that expanding into Ukraine’s esports market requires precise legal and financial planning. Thanks to Intermarium’s expertise, our client not only successfully launched operations in Ukraine but also optimized tax expenses, ensured legal protection, and positioned themselves for future expansion. If your business is considering entry into the Ukrainian market or requires legal advisory services, Intermarium can help you choose the best strategy and minimize risks.