Ukraine is once again preparing to introduce a formal screening regime for FDI – a move that has reignited debate among investors, lawyers, and policymakers. In late September 2025, Parliament registered the first draft law on FDI screening, which quickly drew significant attention and mixed reactions. Just two weeks later, however, an alternative draft was submitted, offering a noticeably different, and potentially more balance, vision for how Ukraine should monitor foreign investments.
A renewed Push for Investment Oversight
Ukraine’s attempt to establish an FDI screening framework is not new. A similar initiative surfaced in 2020 but never gained momentum. Today, with national security, defense capability, and critical infrastructure protection high on the government’s agenda, the idea has returned in full force – this time in two competing drafts.
The first draft law takes a broad and cautious approach. It proposes creating a dedicated screening commission within the Ministry of Economy of Ukraine to review investments in sectors considered sensitive, such as energy, transport, communications, and strategic resources. The proposed procedure would unfold in multiple stages and could last up to 150 days, significantly prolonging deal timelines.
This draft generated extensive media coverage and public discussion, leading some observers to believe its adoption was imminent. Yet, political momentum soon slowed, as members of Parliament and business groups voiced concern over the scope, duration, and administrative complexity of the proposed mechanism.
The Alternative Draft: Simpler and More Predictable
A second draft law, introduced in October, 2025, takes a more streamlined and business-friendly stance. Although it initially received less publicity, professionals and investors quickly recognized that it offers a more practical model.
Instead of setting up a new body, it assigns responsibility for FDI screening to the Antimonopoly Committee of Ukraine (AMC). This structure would minimize duplication and allow for smoother coordination between merger and investment reviews.
The Cabinet of Ministers of Ukraine would define which sectors are subject to screening and update the list as risks evolve. The draft also includes clear exemptions, excluding portfolio investments that do not confer control, as well as transactions involving Ukrainian residents acting on behalf of foreign investors. Such distinctions would prevent unnecessary filings and keep the process focused on genuinely sensitive cases.
Another significant improvement lies in the timeline. The AMC would complete the full screening within 60 calendar days, creating a faster and more predictable process compared to the lengthy and multi-phase system proposed in the first draft.
Additionally, the second draft explicitly emphasizes alignment with EU standards and cooperation with European institutions. This approach reflects Ukraine’s broader effort to harmonize its investment regulations with those of the EU, supporting its long-term integration objectives.
Implications for Investors
While both drafts pursue the same overarching goal, protecting national interests, their operational impact on investors would differ substantially.
The first draft, with its heavy procedural framework and sequential link between FDI screening and AMC merger clearance, could create delays and increase transaction costs. Its wide scope and lack of targeted exemptions risk introducing uncertainty for both domestic and foreign investors.
By contrast, the second draft aims to balance oversight with efficiency. Entrusting the AMC with screening responsibilities, setting concise deadlines, and clarifying the range of transactions that require approval make the system more transparent and manageable. For international investors, such clarity is crucial when planning transactions, assessing risk, and maintaining deal certainty.
What Happens Next
Both proposals are currently in the early stages of parliamentary review, and their final form will likely change following discussions among lawmakers, legal experts, and international partners. Nonetheless, the direction of policy is clear: Ukraine will establish an FDI screening mechanism. The key question is which model will ultimately be adopted – and how it will affect the country’s investment environment.
At this stage, the second draft appears to be the more pragmatic foundation. By leveraging existing institutional expertise within the AMC, ensuring proportionality, and emphasizing EU alignment, it points toward a modern, transparent, and credible screening regime.
A Step Toward Balance and Confidence
Investors should monitor the legislative process closely but avoid reacting prematurely to early drafts. The introduction of an FDI screening system is a natural step in Ukraine’s institutional and economic evolution, mirroring global trends. If implemented thoughtfully, it can enhance both national security and investor confidence.
Ultimately, the second draft may represent the right balance between safeguarding strategic interests and maintaining Ukraine’s appeal as an open, investment-friendly economy – offering a pathway toward a stable, transparent, and competitive business environment.
This article was originally published in Issue 12.9 of the CEE Legal Matters Magazine.