Building the Framework for Recovery in Ukraine: What 2025 Changed and What Investors Should Watch in 2026

Overhaul of public-private partnership (PPP) and concessions regime

The comprehensive new PPP law was one of 2025’s most consequential legal changes. Adopted by the Verkhovna Rada (parliament) and signed by President Zelenskyy mid-year with effectiveness from October 31, 2025, this reform modernizes Ukraine’s PPP and concessions frameworks to attract private capital into reconstruction and infrastructure development.

Key changes include:

• A hybrid financing model that blends state budgets, donor grants, and private capital, making risk allocation more investor friendly.
• A “fast-track” procedure applicable during martial law and for seven years thereafter—meaning priority approval and simplified preparation for reconstruction projects.
• Clarified land-use rules, legislative stability guarantees and modern dispute-resolution options.
• Expansion of concessions and PPPs into new areas, including defense-related and security infrastructure, smoother tender procedures and modern dispute resolution options.

For investors evaluating reconstruction projects in Ukraine, this overhaul signals Ukraine’s commitment to predictable, transparent infrastructure deals—from energy and transport to healthcare and digital services—boosting confidence for both institutional and corporate capital. It also enhances Ukraine’s ability to mobilize private funds for large-scale reconstruction.

Continued currency (FX) control liberalization

The National Bank of Ukraine (NBU) took further steps in 2025 toward unwinding martial law currency controls, lowering a key barrier to cross-border investment activity. For example, the NBU introduced a “stimulating currency liberalization” mechanism tied directly to foreign investment. 

Highlights of the various measures taken by the NBU in 2025 include:

• Foreign-owned Ukrainian companies injecting capital can benefit from an “investment limit,” enabling previously restricted cross-border payments.
• Within this investment limit, companies may service pre-existing foreign debt, settle import obligations and finance overseas affiliates.
• Dividends accruing to foreign investors since January 1, 2023 can now be repatriated abroad subject to a monthly cap of €1 million. (This was previously limited to dividends that accrued since 2024 on).
• Additional easing on syndicated loans and broader cross-border transactions was introduced, further layering liberalization.
• Expanded use of forward contracts allows businesses to hedge against currency risks for imports and other foreign transactions.

For foreign investors, predictable foreign exchange regulations are critical. These steps toward liberalization help unblock value repatriation, servicing of legacy obligations, and movement of capital—all of which can lower investment risk and attract new entrants. In addition, these measures—aside from being aimed at attracting foreign capital and supporting Ukrainian businesses—align with the country’s commitments to international financial institutions, which are key drivers and supporters of Ukraine’s reform and reconstruction efforts.

“Defense City” regime and defense sector legal incentives

A major strategic pivot in 2025 involved creating a special legal regime for the defense industry—colloquially referred to as “Defense City.” (See Dentons - Ukraine’s “Defense City” tax regime takes effect on October 5, 2025 ). The Verkhovna Rada adopted laws establishing this framework to attract investment into defense and dual-use technologies.

Key features include:

• Eligible defense firms receive generous tax incentives (profit tax, land tax, and customs exemptions).
• Simplified customs procedures and streamlined export controls.
• Special currency transaction rules for companies operating under this regime.

This legal framework encourages both domestic and foreign investment into Ukraine’s defense industrial base at a time when modernization and export-oriented production is strategically vital. It may help unlock new revenue streams and competitive advantages for investors in defense technologies.

It also comes at a moment when Ukraine has become one of the world’s most advanced real-world laboratories for modern military and dual-use technologies—from drones and counter-drone systems to battlefield data, electronic warfare and secure communications—all developed, tested, and refined under active combat conditions. As defense spending rises globally and militaries seek not just innovation but proven, adaptable solutions, Ukraine is uniquely positioned to emerge as a significant global player in the next generation of defense and security industries.

Bilateral reconstruction and strategic investment agreements

In April 2025, Ukraine and the United States formalized a new economic partnership through the creation of the United States-Ukraine Reconstruction Investment Fund, jointly governed investment vehicle designed to mobilize US private and institutional capital into Ukraine’s reconstruction and resource development. (See Dentons - Strategic finance initiatives pave the way for Ukraine’s recovery and growth.) The Fund is structured as a long-term, jointly managed platform between the US International Development Finance Corporation (DFC) and Ukraine’s Public-Private Partnership agency, with balanced governance, dedicated investment and oversight committees, and a mandate to operate on commercial principles. Its initial capitalization combines public seed funding with a future revenue stream from Ukraine’s natural resource royalties, and its investment focus spans critical minerals, hydrocarbons, infrastructure, energy and logistics. Importantly, the Fund is designed to reinvest its early returns back into Ukraine’s economy rather than distribute profits, reinforcing its role as a reconstruction and development catalyst rather than a short-term financial vehicle.

From an investor and policy perspective, the Fund represents more than a financing tool; it signals a structural shift toward a rules-based, market-driven model for channeling large-scale capital into Ukraine’s recovery. By anchoring investments in a treaty-level framework, aligning governance with international standards and embedding protections around currency convertibility and legal stability, the Fund is intended to reduce political and regulatory risk for foreign investors entering strategically sensitive sectors. At the same time, its focus on critical raw materials and infrastructure positions Ukraine as a future supplier into global clean-tech, defense and advanced manufacturing supply chains. Reconstruction is thereby transformed into a platform for long-term economic integration rather than mere physical rebuilding.

Together, these reforms signal that Ukraine is not just open for business, it’s actively reforming to attract—and protect—investment.

Looking ahead: What to watch in 2026

In 2026, investors considering Ukraine should keep an eye out on certain key legal and regulatory areas as Ukraine continues to build its investment framework:

Foreign direct investment screening legislation

Ukraine has proposed a new law on screening FDI in critical sectors. If adopted, investors will need to navigate new review processes for investments in sensitive industries. Although regulatory screening of investments, if well-designed, may bring predictability, it could also delay deal timelines. Investors should consult with counsel early when evaluating transactions to assess the potential impact of any FDI screening on timing.

Continued currency liberalization

The NBU’s phased unwinding of wartime FX controls will likely continue, potentially expanding permitted cross-border flows and easing remaining restrictions. Further liberalization will make Ukraine more attractive for international capital, but investors should engage with FX regulatory counsel early to evaluate the potential impact of any remaining restrictions on the financial model of an investment project.

The NBU’s direction of travel is underscored by its most recent liberalization steps. Board resolutions nos. 2 and 3, adopted in January 2026, introduced a new “loan limit” mechanism that expands the range of cross-border FX transactions permitted within the scope of new foreign-currency funding attracted from abroad. Together with the earlier investment-linked liberalization measures, these changes suggest that further targeted easing of FX restrictions can be expected as macro-financial conditions allow.

Implementation of PPP secondary legislation

Following the overhaul of the legal regime for PPPs and concessions, secondary regulations (such as competitive tender rules, project preparation facilities, etc.) are expected to be finalized in 2026. In addition, the Ministry of Economy is working on the creation of Viability Gap Funding mechanisms and a Project Preparation Facility. Detailed procedures matter, and investors should monitor their rollout to participate effectively in early tenders.

A concrete example of how these secondary rules are beginning to materialize is the launch of a competitive-dialogue concession process for the Universal and Container terminals at the port of Chornomorsk—one of Ukraine’s largest maritime infrastructure assets. In December 2025, the Ministry for Development of Communities and Territories formally announced the concession tender under the updated framework, with a 40-year term and pre-qualifications aimed at experienced international operators, signaling how investors will soon be able to engage under the new regime. (See ANNOUNCEMENT OF THE CONCESSION TENDER (COMPETITIVE DIALOGUE) | Ministry for Development of Communities and Territories of Ukraine.)

European integration in legal and fiscal systems

Ukraine’s commitment to eventual European Union membership is reshaping its legal and fiscal architecture in ways that matter directly to investors. Beyond headline reforms, several deeper, structural shifts are underway that are steadily aligning Ukraine with EU norms and reducing regulatory uncertainty. These include:

• Public finance transparency and EU budgeting standards: Ukraine is moving toward EU-style medium-term budgetary frameworks and fiscal discipline rules, enhancing predictability in public investment planning. These measures are intended to improve transparency, accountability and the fiscal credibility of state programs that underwrite major projects.
• Tax policy convergence: Incremental alignment with EU tax standards—spanning VAT, excise duties and transfer pricing practices—is progressing. Full convergence will take time, but early measures are already reducing compliance costs and signaling a transition toward EU tax norms that will benefit multinational investors.
• Anti-money laundering and financial compliance: Ukraine is elevating its anti-money laundering regime to reflect core elements of the EU’s Fifth and subsequent AML Directives. These enhancements tighten due diligence and reporting requirements for banks, financial institutions, and large investors. Though they raise compliance expectations, they also strengthen systemic integrity and investor safeguards, making Ukraine more attractive to global capital.
• Corporate governance and ESG integration: EU-driven reforms are pushing Ukrainian corporate governance toward European benchmarks, including sustainability reporting aligned with the EU Corporate Sustainability Reporting Directive (CSRD). As ESG considerations become embedded in regulation, investors should anticipate these standards as normative for access to capital and competitive valuation.
• Judicial and rule-of-law reforms: Ongoing efforts to strengthen judicial independence, commercial dispute resolution mechanisms and digital court infrastructure aim to improve enforcement certainty and reduce investor risk.

These European integration reforms signal a deliberate, sustained shift toward EU legal, fiscal and regulatory standards that will gradually reduce regulatory risk, enhance market access and elevate institutional credibility. Investors who anticipate and integrate these evolving requirements into their planning and compliance frameworks stand to gain a competitive edge as Ukraine’s economy converges with European markets.

Reconstruction project launches

The first wave of investable projects backed by Ukraine’s reconstruction financing architecture—including new bilateral and multilateral funds—is expected to move from planning into execution during 2026. This transition from framework-building to project deployment will be a critical inflection point, transforming reconstruction from a policy objective into a pipeline of bankable opportunities. Among the most closely watched platforms is the US–Ukraine Reconstruction Investment Fund, alongside EU-backed facilities and multilateral development bank programs, all of which aim to mobilize large volumes of blended public and private capital into priority sectors. (See Dentons - Strategic finance initiatives pave the way for Ukraine’s recovery and growth and Dentons - Ukraine announces two oil and gas PSA tenders.) Early milestones have included the Fund’s full operational launch in late 2025 and its initial capitalization with seed contributions from both DFC and the Government of Ukraine.

In a major step toward project origination, in early January DFC announced the launch of an online application portal for the Fund to solicit potential investment proposals across its target sectors—including critical minerals, energy (generation, transmission, and hydrocarbon extraction), transport and logistics, ICT, and emerging technologies—ahead of its first planned investments this year. These mechanisms are designed to surface bankable projects early and signal how blended finance vehicles and institutional capital may enter Ukraine’s recovery landscape.

Concrete project developments are already emerging. In January 2026, Ukraine awarded the development rights for the Dobra lithium deposit—one of the country’s most promising critical mineral sites in the central Kirovohrad region—to a consortium led by Dobra Lithium Holdings under a production-sharing agreement. The consortium’s shareholders include internationally experienced minerals groups such as TechMet and The Rock Holdings, and the tender is expected to attract at least US$179 million in initial capital for exploration, auditing, and, subject to reserve confirmation, extraction and processing. Lithium is a mineral of global strategic importance due to its use in batteries and advanced technology supply chains, making this project a key early example of how Ukraine’s reconstruction and critical mineral reforms are beginning to draw private investment into high-growth sectors.

Initial project pipelines are expected to concentrate on areas with both high public value and strong investment potential. These include modernization and decentralization of energy systems (including grid resilience, renewables and storage), rehabilitation of transport and logistics corridors (ports, rail, and road networks essential for trade and exports), large-scale housing and urban redevelopment using PPP models and green building standards, and digital and cybersecurity infrastructure to support economic modernization and institutional resilience. These programs are expected to rely on a combination of concessional finance, guarantees, political risk insurance, and structured risk-sharing mechanisms to crowd in institutional capital and reduce early-stage development risk.

As project preparation gives way to procurement and financing, early engagement will matter. Investors who monitor project origination, participate in feasibility and structuring phases, and align with fund sponsors and public authorities early will be better positioned to access preferred opportunities, co-financing, and risk mitigation instruments. In practice, this means tracking announcements from the Ministry of Economy, line ministries, and fund managers—and engaging before formal tenders are launched, not after.

Legal reforms in 2025 laid the groundwork for accelerated private investment and private sector engagement in Ukraine’s reconstruction. From comprehensive PPP modernization to currency liberalization and defense sector incentives, the legal landscape is progressively aligning with global investor expectations—while still navigating the realities of ongoing hostilities. As Ukraine transitions into 2026, investors should watch for implementation details, new screening regimes and further financial sector and other sectoral reforms that will shape the next phase of opportunity.

By Adam Mycyk, Partner, Dentons