Do I need to obtain the consent of the Antimonopoly Committee of Ukraine for the acquisition of shares in an offshore company?

At first glance, the question posed in the title, it sounds strange. It would seem that what the relationship between an offshore company registered in Belize and the government of Ukraine? But such a relationship may arise if an offshore company controlled by an enterprise in Ukraine.

Ukrainian legislation by Law « Protection of Economic Competition » sets the notion of a “control».

The term “control” the law defines a decisive influence on the activities of a business entity through the power to appoint the governing bodies and the ability to give binding instructions.

In connection with the process of establishing control law defines the concept of “concentration”, defined as the process of merging of enterprises, companies and other market assets, thereby increasing economic power of market participants. Also under this concept refers to the acquisition of 25% or 50% of shares in companies and even the appointment of the head of the company. When certain parties to the concentration of economic indicators for the implementation of actions related to the concentration required to obtain prior consent of the Antimonopoly Committee of Ukraine.

participated in this process are recognized: the offshore company, which controls the company in Ukraine, the Ukrainian company itself and the company that intends to acquire control of an offshore company.

Economic indicators, using that Ukraine extends the jurisdiction of the Antimonopoly Committee in overseas countries, the following:

total assets or total sales volume concentration participants for the last fiscal year, including abroad exceeds 12 million euros and at the same time:

total assets or total sales volume concentration participants for the last fiscal year, including abroad, not less than two members, exceeds the sum of 1 million euros

total assets or total sales in Ukraine at least one party exceeds the amount of 1 million euros for the last fiscal year.

should be specially noted that if the proportion of a certain commodity market of at least one of the members exceeds 35 percent, then a permit is required even without the achievement of the above economic indicators.

The fact that the above procedure is not exotic, can testify to the numerous reports MCA to give consent, which featured many offshore jurisdictions. As an example, the following message:

«granted permission« Ukrlandfarming plc »(Nicosia, Cyprus), which manages assets of business entities, which is connected for monitoring, to purchase shares in the share capital Oktilian Ltd. (Nicosia, Cyprus), which manages assets of business entities with which the associated relations of control, which provides the buyer excess of 50% of the votes in the supreme governing body of the issuer “and” Contributed by authorization company Oktilian Ltd. (Nicosia, Cyprus) to acquire shares in the company Dermal Svitanok (Lvov), which provides the buyer excess of 50% of the votes in the supreme governing body of the issuer. »

procedure for obtaining the consent of the governed by the Regulations of the MCA concentration, approved Order AMK № 33-p.

In conclusion, it should be noted that if a special need in order to formalize their legal ownership of shares in the offshore no, such a mechanism as trust completely avoids the need to appeal to the Antimonopoly Committee of obtaining consent for acquisition of shares.

Y. Azarov, 25.10.2010

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