The concept of a joint venture (JV) has long been recognized globally as an effective mechanism for pooling resources, sharing risks, and accessing new markets. In the context of Ukraine, the relevance of this legal structure has increased exponentially, driven by the country's urgent need for large-scale post-war reconstruction. Despite its widespread practical application, Ukrainian legislation does not contain a single, unified statutory definition for a "joint venture." Instead, the legal framework offers a multifaceted toolkit that allows parties to structure their collaborative arrangements through various organizational and contractual forms.

Contractual Form: Joint Activity Without a Legal Entity

There are two main types of a Joint Venture in Ukraine: contractual form (without establishing a legal entity) and a corporate form (by establishing a legal entity).
The contractual form is regulated by art.1130-1131 of the Civil Code of Ukraine and is formally known as a joint activity agreement. This form does not require the creation of a separate legal entity. Participants combine their contributions, which may include money, property, expertise, or business reputation, to achieve a common goal, and the contributed assets become the participants' joint common ownership. One participant is typically appointed as the operator of the joint activity and manages the common affairs based on the agreement or a power of attorney. 

Joint Activity Agreement with Pooling of Contributions

This type of agreement contemplates activities aimed at generating profit or other material assets. As a rule, the contributions of the participants become the joint common property of each of them and may be used equally between them, provided that this is stipulated by the terms of the agreement, for the purpose of conducting the joint activity. For instance, if necessary for achieving the common goal, one party may lease premises from another party without paying any compensation to the latter for such use. There is a notable nuance regarding this type of agreement: it may require registration with tax authorities if so provided by the Tax Code of Ukraine.

Joint Activity Agreement without Pooling of Contributions

Such civil law agreements typically contemplate activities aimed at achieving a certain intangible result. They are most commonly concluded between individuals in fields such as education or consulting. Examples include agreements for the joint development of software or the creation of an intellectual property object.

Corporate Form: Establishing a Legal Entity

Joint Venture can also exist in a form of a limited liability company. The partners contribute capital, assets, or intellectual property and agree on profit sharing, liability, and governance. The LLC framework allows for a corporate agreement, which is essentially the Ukrainian equivalent of a shareholders' agreement and can meticulously govern management, voting rights, exit mechanisms, and deadlock resolution procedures. If a foreign partner holds at least ten percent of the charter capital, the entity qualifies as a commercial entity with foreign investment, granting it additional legal guarantees under the Ukrainian Law On the Regime of Foreign Investment. The corporate agreement also allows for flexible customization of participant rights and obligations, including put and call options for shares.
Some important aspects to consider:

• The number of LLC members is not limited;
• There is no minimum or maximum amount of authorised capital that can be formed at any time;
• During the period of martial law in Ukraine, the withdrawal of dividends abroad by a foreign founder is prohibited. Instead, it is possible to pay dividends into a Ukrainian bank account;
• Ukrainian legislation allows for a corporate agreement between partners in a joint venture, which is not only confidential but can provide for virtually any arrangement between partners;
• The licensing process covers 32 types of activities, including construction, finance, transport, medicine, education, etc.

Conclusion

Ukrainian law provides two principal avenues for structuring a joint venture: the contractual form under a joint activity agreement and the corporate form through a limited liability company. The contractual model offers flexibility for short-term projects or those aimed at intangible results, while the corporate structure provides greater stability and protection for long-term commercial ventures, particularly with the added benefit of a corporate agreement that allows partners to tailor governance and exit mechanisms.

For foreign investors, Ukraine offers legal guarantees under foreign investment legislation, flexible corporate agreement options, and emerging opportunities in reconstruction and defence sectors. However, these advantages must be balanced against practical challenges, including dividend repatriation restrictions during martial law, mandatory antimonopoly clearance requirements, and complex tax considerations. With careful structuring and professional legal guidance, the joint venture remains an effective and reliable vehicle for collaborative investment in Ukraine.

de Capoa Law Firm
Dario Gorji Varnosfaderani
Elizaveta Cherepanova