Following its recognition in the “Top 50 Leading Law Firms of Ukraine” ranking by the Yuridicheskaya Praktika publishing house—where ALARIUS Law Firm secured the 34th position alongside specialized commendations in Real Estate and Construction—Managing Partner Viktor Surnyk shared his expert perspective on the evolving economic and legal landscape of Ukraine.
Below is an overview of key insights from his comprehensive interview for the annual analytical study:
1. Key Risks and Challenges for Investors
Undoubtedly, the primary risk for both foreign and Ukrainian investors today is the ongoing war. Operating in a country at war inherently involves capital loss risks resulting from hostilities. For domestic investors—particularly in the construction sector—requirements remain unrelaxed under martial law, while physical asset risks are exponentially higher than in peacetime.
Consequently, while hostilities continue, general investment attractiveness will remain restrained, though underlying demand for real estate continues to rise as citizens relocate from frontline and occupied regions to peaceful cities.
2. High-Potential Sectors for Foreign Investment
Despite wartime challenges, several key sectors present compelling opportunities:
- Defense Industry: Local manufacturing within Ukraine offers a faster, more sustainable alternative to relying solely on external weapon supplies. Projects like Turkish defense giant Baykar’s manufacturing facility near Kyiv illustrate this strategic trajectory.
- IT Sector & Cybersecurity: Ukraine’s tech industry continues to thrive on high-level talent and competitive pricing. Given global information security challenges, artificial intelligence integration and cybersecurity solutions developed under daily threat conditions offer immense market value.
- Energy Sector: The systemic vulnerabilities exposed in legacy power infrastructure are driving transparent market reforms. Synchronization with the European ENTSO-E grid and ongoing regulatory harmonization create robust opportunities for new generation capacities, job creation, and budgetary contributions.
3. Investment Protection and the Judiciary
While the state has implemented positive measures—such as draft law No. 1915 on war-risk investment insurance, the UN-supported Dream platform for fund tracking, and specialized investment protection departments within the Prosecutor General's Office—critical challenges remain.
The institutional readiness of the judicial system is a pressing concern. Courts face severe workloads and staff shortages, and judicial practice regarding investment contracts still exhibits statutory discrepancies within the Supreme Court. A predictable, unified judicial approach is paramount to securing investor confidence.
4. Nationalized Assets and Market Realities
The transfer of over a thousand nationalized assets to the State Property Fund presents a complex challenge. High-profile sales (such as PentoPak or the Zaporizhzhia Aluminum Production Plant) reveal hurdles such as historical debt burdens, opaque asset conditions, and prolonged administrative stagnation.
To attract serious capital, the state must thoroughly prepare assets prior to privatization: removing legacy management, conducting rigorous financial, legal, and technical audits, resolving creditor claims, and ensuring absolute transparency.
5. Prospects for the Post-War Investment Climate
Political stability, post-war predictability, and massive reconstruction needs will fundamentally transform Ukraine. As Viktor Surnyk notes:
“Ukraine is likely to become one of the largest construction sites in Europe.”
While war remains the primary factor influencing investment appeal, systemic challenges such as corruption, a weak judicial system, and the shadow economy must also be systematically addressed. Supported by international financial institutions (IMF, World Bank) and driven by European integration reforms, Ukraine’s post-war investment climate holds immense positive potential.
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