Criminal Law Protection of Business in Ukraine: Defending Startups and High-Tech Companies
Michael Dgalapyn, Partner, Lions Lawyers
Publication
Ukraine’s rapidly developing technology sector — including IT outsourcing, SaaS platforms, fintech, crypto ventures, and defence-tech startups — has become a major driver of foreign investment and cross-border commercial activity.
However, innovative business models, digital assets, and complex financing structures often attract heightened regulatory and law-enforcement scrutiny.
For founders, investors, and technology executives, understanding criminal law risks in Ukraine is essential to safeguarding operations, intellectual property, and capital.
Legislation
Criminal proceedings in Ukraine are governed primarily by:
-The Criminal Code of Ukraine (substantive offences)
-The Criminal Procedure Code of Ukraine (procedural rules)
-The procedural framework is adversarial in structure but retains strong investigative powers vested in law-enforcement authorities.
Investigations are typically conducted by:
-National Police
-Security Service of Ukraine (SBU)
-Bureau of Economic Security
-National Anti-Corruption Bureau (NABU)
-State Bureau of Investigations (DBR)
Jurisdiction depends on the nature of the alleged offence.
1. Legislative Framework of Economic Crime
Business-related criminal liability is governed primarily by:
Criminal Code of Ukraine
Criminal Procedure Code of Ukraine
Tax Code of Ukraine
Financial monitoring and AML legislation
Economic crime provisions cover both intentional fraud and technical regulatory breaches.
2. Common Criminal Exposure Areas for Startups
High-tech and startup businesses most frequently encounter criminal risk in areas such as:
Tax optimisation structures
Transfer pricing and cross-border payments
Cryptocurrency transactions
Token issuance and digital assets
Grant and investment fund utilisation
IP ownership structuring
Employment and contractor models (FOP structures)
In practice, investigative authorities may reclassify commercial or tax disputes into criminal proceedings.
3. Initiation of Investigations
Criminal proceedings may arise through:
Competitor or counterparty complaints
Regulatory audits
Financial monitoring reports
Whistleblower disclosures
Once registered in the Unified Register of Pre-Trial Investigations, authorities gain broad investigative powers.
4. Searches and Seizures in Technology Companies
High-tech companies face particular operational risk during investigative actions, including:
Office and data-centre searches
Seizure of servers and hardware
Confiscation of laptops and mobile devices
Access to cloud infrastructure
Freezing of crypto wallets
Improperly conducted searches may disrupt business continuity and client operations.
5. Asset Freezing and Financial Restrictions
Investigators frequently seek court orders to freeze:
Corporate bank accounts
Investor funds
Payment processor balances
Cryptocurrency holdings
For startups reliant on liquidity, account freezes can paralyse operations within days.
6. Personal Liability of Founders and Executives
Ukrainian criminal law permits liability not only for companies but also for:
Founders
Directors
CFOs
Beneficial owners
Exposure may arise even where operational control is indirect.
7. IP and Technology-Specific Risks
Technology businesses face additional criminal-law interfaces involving:
Alleged IP misappropriation
Software licensing disputes
Export-control compliance (dual-use tech)
Cybersecurity breaches
Cross-border cooperation with foreign regulators may be triggered.
8. Defence Strategy and Preventive Structuring
Effective criminal defence for startups combines reactive and preventive measures, including:
Pre-investigation risk audits
Corporate structuring review
AML and tax compliance frameworks
IP ownership documentation
Data-protection protocols
Preventive legal structuring significantly reduces criminal exposure.
9. Interaction with Venture Capital and Investors
Criminal investigations may affect:
Investment rounds
Due diligence processes
Exit transactions
Share valuations
Early defence positioning protects both operational continuity and investor confidence.
10. Conclusion
Ukraine offers substantial opportunities for technology and innovation businesses, but founders must navigate a criminal-law environment where financial, tax, and regulatory issues may escalate into investigative proceedings.
Lions Lawyers - Ukraine
Our Criminal Defence & Business Protection Practice
Lions Lawyers represents startups, technology companies, investors, and executives in complex economic crime and business-related criminal proceedings in Ukraine.
We provide:
Criminal defence in economic and tax investigations
Representation during searches and seizures
Asset unfreezing and account release applications
Crypto asset protection and recovery
Founder and executive defence strategy
Compliance audits for high-tech businesses
Crisis management and reputational protection
Our team integrates criminal defence with corporate, tax, and technology-sector expertise to safeguard innovation-driven businesses.
Early legal structuring significantly reduces investigative exposure and operational disruption risks.