What does Ukraine’s EU path mean for investors?
Investors were cautious about investing in Ukraine long before Russia’s full-scale invasion.
Oligarchs, corruption, informal business practices, and economic volatility were all elements for investors to consider. Confusing court orders could lead to assets changing hands, with no clear path to legal recourse.
“Ukraine’s EU path has not eliminated the risk of politicized justice,” says Ivan Nagorniak, policy fellow at the European Policy Center in Kyiv.
“But it has made such risks harder to hide, harder to normalize, and more damaging for the state. For investors, that is the real shift.”
Since orienting towards the European Union in 2014 after the Maidan Revolution, European values such as judicial independence, anti-corruption enforcement, and economic freedom are no longer treated as purely domestic reform promises — failure to act on them can carry a direct cost for Ukraine’s strategic objective of joining the EU.
Against the backdrop of Russia’s full-scale invasion, Ukraine has advanced its reform agenda, contributing to the mobilization of billions of dollars in financing from European financial institutions.
“Over the past two years, Ukraine has introduced safeguards that would have been impossible a decade ago,” says Olena Makarenko, partner in Risk Consulting and ESG at KPMG in Ukraine.
“Investors now operate in an environment where integrity checks, beneficiary transparency, and dispute mechanisms are becoming more synchronized with EU norms. They also have more tools to verify partners, contracts, and ultimate beneficiaries than in many emerging markets,” she adds.
But while the country has changed, a lot remains to be done.
This sixth guide, created in collaboration between the Kyiv Independent and the KPMG Ukraine Gateway team, will explain the progress Ukraine has made on its path to the EU, what remains to be done, and the helping hands that investors can turn to as Ukraine and the EU tie an ever-tighter knot.
What does the EU path look like?
Countries join the European Union after fulfilling a long pipeline of criteria, which aim to guarantee democracy, rule of law, and a strong market economy that can compete on the European market.
With the signature of the Association Agreement in 2022, candidate country status in 2022, and the opening of formal negotiations in 2026, Ukraine is now anchored in a predictable process that progressively makes the rules for companies the same as in the EU market.
“As Ukraine accelerates EU harmonization, investors should expect greater transparency, predictability, and alignment with EU single market standards,” Kenneth Ryan, COO, KPMG Central & Eastern European region, says.
“This means clearer rules on competition, state aid, public procurement, and capital movement.”
Foreign direct investment screening, anti-money laundering standards, public-private partnership, company law, accounting standards, public procurement — Ukraine is now aligning with European and international standards.
Ukraine hit 84% compliance with the Association Agreement in 2025, up from 81% in 2024. The greatest progress was made in the financial sector, labor relations, and sanitary and phytosanitary standards.
Simultaneously, Ukraine’s anti-corruption infrastructure is transforming.
“EU alignment would transform existing Ukrainian anti-corruption measures to being proactive and systematic,” says Aleksandar Bućić, public Sector Lead, KPMG Central & Eastern European region.
Growing independence of anti-corruption institutions, higher capacity in Ukraine’s high anti-corruption court, improvements to the country’s Criminal Procedure Code, and a wealth of legislation across transparency in public procurement, whistleblower protection can be expected, says Bućić.
“EU accession creates external discipline,” says Nagorniak.
“Ukraine’s justice-sector reforms, anti-corruption institutions, and administrative governance are now monitored through EU reports, screening, benchmarks, and reform roadmaps. In practical terms, this makes arbitrary treatment of investors more visible, more contestable and more politically expensive,” he adds.
Financing
These changes are already making Ukraine a more enticing investment destination, and the European Union is also putting in real resources to help turbocharge investment — including 9.5 billion euros over 2024 – 2027, specifically to support public and private investments under its Ukraine Investment Framework (UIF).
“This is huge compared to the investment figures that you would find even before the full-scale invasion,” says Gabriel Blanc, team leader for the Reconstruction of Ukraine at the European Commission.
The UIF works by channeling money through a network of financial partners — institutions like the European Investment Bank and the European Bank for Reconstruction and Development, as well as national development agencies and export credit agencies — which then deploy it on the ground through grants, concessional loans, loan guarantees, and even direct equity investments.
The EU is focusing on mobilizing investment in energy, critical raw materials, manufacturing, the digital sector, and dual-use technology. European and Ukrainian companies with investment ideas can approach the EU directly with ideas to get involved through an ongoing call for expressions of interest; if the proposal fits, the EU will match them with one of the financing partners above.
More than half of the money has flown to the public sector, reflecting the fact that Russian attacks have targeted public infrastructure in urgent need of repair. But public investments still create openings for private companies.
“Public investments translate into tenders, so it is important that companies looking for business opportunities in Ukraine look at the tenders that are resulting from this massive public procurement that we are supporting with our guarantees,” Blanc says.
Beyond the raw cash, the growing ecosystem of investment has the positive spillover of making future investment more likely.
“International financial institutions, including the EBRD and other institutions in the EU, bring stronger due diligence, audit, anti-fraud controls, and contractual safeguards than purely domestic transactions,” Nagorniak says.
“They do not replace the courts, but they raise the cost of arbitrary interference and create additional channels of scrutiny,” he adds.
While 8.4 billion euros has already been allocated to projects, much of the cash still remains to be deployed — meaning the Commission is still actively looking for companies to get involved.
And it may yet be just the beginning.
“This is not the end of the game,” says Blanc.
The Commission has proposed to have 48 billion euros of guarantee capacity for Ukraine under the next EU budget, which will cover seven years from 2028 to 2034.
“While the final amount is a political decision of the parliament and European member states, it is clear that there is a good understanding by all stakeholders that this is something which is here to stay,” Blanc adds.
As EU and Ukrainian ecosystems intertwine, the Commission is also hoping that this will help tighten the knot between business communities, according to Blanc.
“We did not see enough joint ventures in the first cohort of companies,” Blanc says.
“That is something we will really value going forward, especially Ukrainian and EU-based companies submitting joint requests.”
Key challenges ahead
But despite great strides forward and positive signals from the EU, passing state-transforming legislation was never going to be easy.
Ukraine’s reform push slowed in 2025 and 2026, as relations between the parliament and government broke down. There is a risk going forward that political parties — particularly Eurosceptic ones — will stall European legislation for political gain.
And then there are the more traditional problems of entrenched interests that every country faces.
“Sometimes the committees in the Verkhovna Rada are taking the short-term interests of industry over the long-term interests of the country — and even the long-term interests of the industry. That is a big challenge,” Nagorniak says.
There are also more structural challenges to implementing the sweeping and extensive legislation — notably whether Ukraine’s institutions are even ready to handle such complex regulation.
Old institutions generally need more capacity to implement wide-ranging legislation. Ukraine must also set up new institutions to fulfil requirements from the EU — such as how the country monitors carbon dioxide emissions.
More capacity is also crucial for completing the country’s anti-corruption infrastructure, including staffing, expertise, and administrative support to manage an increased volume of complex cases.
And of course, the grinding war poses its own challenges. Security concerns mean that unbundling the state railway, privatizing state-owned banks, or changing public procurement are not top priority — even if the European Union would like to see those things happen as part of accession.
“It is important to acknowledge that as long as the war continues, it remains challenging to ensure full transparency and effective control over public procurement in Ukraine,” Pier Stefano Sailer, KPMG Head of Government & Public Sector, KPMG EMA says. “However, by promoting deeper alignment with EU legislation and safeguards, the EU aims to protect investors and lay the groundwork for Ukraine’s potential future accession to the Union.”
“Nonetheless, the system still operates under certain wartime exemptions and will require additional reforms,” Sailer adds.
Ukraine is firmly on the path to the European Union, and the regulations and norms that come with it. But even if the country is not all the way there, now may be a better time than ever to invest.
