“All’s well that ends well”
No one worries about their deposit in an investment project or not having a lawyer when everything is all right. But when problems, disputes or conflicts appear everyone starts to regret they didn’t take the time and effort to protect their investments in advance.
Having a considerable experience in the field of litigation and legal services, I have formed a list of simple but effective and efficient advices for foreign investors, which minimizes risks and gives a confidence in the correctness of an investment approach. Looking forward, these will help the investor’s lawyers to have a better position in court in the case of a dispute or conflict.
Correct business structuring decisions
After reaching an agreement with partners or making a decision the investor creates a legal shell for the business – a corporate structure. It should provide each of the partners with a sufficient level of control over the project, guarantee the achievement of project objectives, and create a system of checks and balances.
A charter, a corporate contract, an irrevocable power of attorney to manage corporate rights, a trust management agreement of shares in the company – all these are tools that should be used with proper and safe structuring.
Having built the correct structure, you shouldn’t forget that it is necessary to control its use and implementation. This function can be entrusted to a corporate secretary, who will monitor compliance with the system of checks and balances.
Corporate contract
The application of the corporate contract will increase the protection of the participants and the reliability of the partnership (project). Such a contract is recommended if you:
• are a minority shareholder;
• are a majority shareholder, but it is important for you to keep minority shareholders (including management with minority stake) in the company;
• have signed a concept document, but there is an intent to legalize it, to give it legal significance;
• would like to determine the fate of the company (your share) in case of unforeseen events;
The contract is obligatory if you:
• are not a majority shareholder in a project with a complicated shareholder;
• are a minority shareholder and expect to profitably sell your share to the main participant;
• would like to prevent a competition between the company and its shareholders;
• are a member of a company with a 50/50 share distribution;
Engage local technical experts
Participation of surveyors, technical consultants in the project will allow to assess the quality of the implementation of the investment project related to real estate, construction and more.
One of the main goals is to minimize the risks of the customer associated with the implementation of a concept (project) in the field of real estate. This will allow to control the customer, general contractor, developers and other participants of the investment project.
Regime of Foreign Investments
Foreign investment is particularly protected. If the guarantees stipulated by the Law of Ukraine “On the Regime of Foreign Investments” change after an investment then within ten years from the date of such legislation, at the request of a foreign investor, state guarantees of protection of foreign investments will be applied.
In addition, in some cases, there is a preferential treatment of investment and other economic activities.
I follow these recommendations. We are sure that investing in Ukraine will be more protected. At the same time, each case is special and requires an individual approach. Trust is a good foundation for any investment.
“GORO legal” law firm
Kyiv, 72, Bolshaya Vasilkovskaya str, office 21
+38 (044) 383-18-57
+38 (050) 436-00-77
[email protected]
goro.ua
