A legal conflict over share contributions for construction projects started after 2021 is causing housing prices to rise and slowing down investment activity, according to the Ukrainian Association of Developers.
The repeal of Law No. 132-IX, which abolished share contributions for projects whose construction began after January 1, 2021, was supposed to help reduce housing prices and stimulate investment activity. However, in practice, the industry has encountered a situation where communities are demanding, including through the courts, the payment of share contributions for projects for which construction permits were obtained before that date but construction began later. In particular, the Department of Economy and Investment of the Kyiv City State Administration is the plaintiff in 152 court cases seeking to recover equity contributions from construction customers.
As of March 1, 106 such cases were pending in courts of various instances for projects launched in 2020-2022 worth approximately UAH 1.59 billion.
“In 2019, the authorities officially recognized that equity participation had become a source of corruption, and therefore Law No. 132-IX was adopted to abolish it. This was a principled position of the state – to eliminate a quasi-tax on real estate, which was actually paid by home buyers. This decision contributed to a reduction in housing prices and was intended to stimulate investment activity in the industry. Despite the clear official position of the Ministry of Community and Territorial Development of Ukraine, the authors of the law on the abolition of equity participation, and the relevant committee of the Verkhovna Rada, the prosecutor’s office and local authorities continue to ignore the provisions of the current legislation,” said Yevgeny Favorov, chairman of the board of the Ukrainian Association of Developers, to Interfax-Ukraine.
A fixed property tax is proving to be very effective for community development.
The head of the Verkhovna Rada Committee on Organization of State Power, Local Self-Government, Regional Development, and Urban Planning, Olena Shulyak, one of the authors of Law No. 132-IX, emphasized that even at the stage of abolishing share participation, there was a compensatory alternative, namely a fixed property tax. This tool has much higher potential for solving infrastructure problems, is easier to administer, and has significantly lower corruption risks than the share contribution.
“In fact, the share of equity participation in local budget revenues was very small — about 1%. These funds were not used for the construction of new kindergartens, schools, and other infrastructure, and the intended use of these funds was not controlled. Therefore, we have a property tax. I would not say that this is a universal compensatory measure, but we can now see that, in terms of figures, it already exceeds it many times over. Thus, in 2020, it amounted to 5.7 billion, in 2021 – 7.8 billion UAH, in 2022 – 7.1 billion UAH (despite the war), in 2023 – 9.1 billion UAH, in 2024 – 10.7 billion UAH, and in 2025 (as of now) – 4.3 billion UAH. In terms of share contributions, we see the following figures: in 2020, share participation funds amounted to 1.4 billion UAH, in 2021 – 572 million UAH, in 2022 – UAH 134 million, in 2023 – again UAH 134 million, in 2024 – UAH 199 million, in the current year (as of now) – UAH 159 million,” Shulyak said.
She emphasized that equity participation as a tool had long been ineffective, which is why it was abolished at the legislative level.
“But this does not mean that communities do not have the right to defend their interests in court when it comes to cases covered by the old legislation. Indeed, some communities, in particular Kyiv, remain active in legal disputes over equity participation – these are situations where objects received permits before 2020 but were completed later. In such cases, the legal basis for claims is most often Article 1212 of the Civil Code of Ukraine, which deals with unjustly retained property. As for other communities, we do not yet have centralized statistics on the number of claims,” Shulyak said.
At the same time, in her opinion, if the agreement on the payment of a share was not concluded before the law on its cancellation came into force, such charges are unfounded.
Regarding projects where the participants have changed during this period, she noted that if the new construction customer carries out construction in accordance with the construction permit issued to the previous customer before January 1, 2021, there are no grounds for non-payment of the share participation. However, if the construction permit was obtained after January 1, 2021, the share participation is not payable.
“If the construction customer is implementing a completely new project in terms of functionality, etc., then in this case it is more expedient to terminate the previous permit and obtain a new one. Thus, the new permit will be obtained after January 1, 2021, and the construction customer will not have any obligations to pay the share contribution,” Shulyak recommends.
Conflict: permit obtained before the share contribution was canceled, construction started after.
According to experts from the Association of Developers, when the share contribution was canceled, a legal conflict was identified that created a legal loophole in the regulation of the relevant legal relations. This was directly acknowledged by the Supreme Court in its decision of July 20, 2022, in case No. 910/9548/21, which states: “Law No. 132-IX does not regulate issues of share participation in cases where construction of the facility began after January 1, 2021.” At the same time, by providing its own interpretation of these legal relations, the court effectively departed from the essence and intention of the legislator, which was to completely eliminate equity participation as a quasi-tax on real estate.
On May 14, 2025, in case No. 320/44099/23, the Supreme Court finally confirmed that the changes to the procedure for attracting and using share contributions adopted by the Kyiv City Council in 2019-2020 are unlawful and invalid. In other words, with this decision, the Supreme Court confirmed that the legal basis used by the city authorities since 2019 to calculate share participation, conclude relevant agreements, or issue financial claims is unlawful, i.e., illegal.
“In addition to the legally unfounded position of the city authorities, another important aspect should be noted. The city already receives billions of hryvnia from developers and home buyers in the form of engineering, transport, and social infrastructure facilities that have been built and transferred to municipal ownership,” Favorov noted.
The cities have received new engineering infrastructure worth billions of hryvnia, but the issue of transferring it to the social balance sheet has not been resolved, experts noted.
According to estimates by the Ukrainian Association of Developers, in just eight projects by five member companies in Kyiv, engineering, transport, and social infrastructure worth more than 5.6 billion hryvnia has already been created. The total cost of all the infrastructure that city developers have built over the years is estimated at tens of billions of hryvnia, Favorov said.
Many of these assets are transferred to the balance sheet of municipal enterprises, which not only receive them free of charge but also receive a stable income by charging residents for the maintenance of the built networks.
As for social infrastructure, such as kindergartens and schools, their creation is required by building regulations, but there is no de facto procedure for transferring such facilities to communities.
Anna Laevskaya, commercial director of Intergal-Bud, spoke about two precedents when the company tried to negotiate with city authorities regarding educational infrastructure—a kindergarten in the Parkovye Ozera residential complex in the Dniprovsky district and in the Yaskryvy residential complex in the Minsk district.
“In Parkovye Ozyora, we offered to transfer to the city a turnkey kindergarten with 120 places, complete with furniture, dishes, and toys. All that remained was to take it on the balance sheet and open it. At that time, equity participation was in effect, the city was in dialogue with us, and possible options were discussed for accounting for the kindergarten as part of a share contribution or providing other preferences for the developer. But at the moment of signing the deed of transfer, that is, in essence, the legal transfer to the city, it became clear that there were no legal possibilities to count it as a share contribution. We had to return the kindergarten through the courts,” she stated.
A similar story happened with a kindergarten in the Obolonsky district. When forming the request, the district planned to take it on the balance sheet, but later reported that there was no legal basis or budgetary funds to open a new educational institution. The companies were advised to immediately plan for a private operator, which is what happened.
“The only option now is to invite a private operator to cooperate on the social infrastructure facilities that have been built, and this has disadvantages for everyone,” says Laevskaya.
For the developer, these facilities have an extremely low payback period of 15-25 years. They are not commercially viable, but they are necessary for the developer’s reputation. Residents would gladly choose municipal schools and kindergartens in buildings owned by the developer, but instead they have no choice but to pay a private operator of an educational institution between 15,000 and 25,000 hryvnia per month.
Laevskaya cited Hatne as a positive example of cooperation with local authorities. To resolve the issue of social infrastructure, the developer invested in the renovation and expansion of an existing school.
However, in general, the abolition of share contributions has not solved the problem of urban renewal. Ukraine still lacks a legal framework for transferring infrastructure created by developers to communities. In particular, Intergal-Bud has invested more than UAH 800 million in engineering infrastructure, including collectors, road repairs, lighting, and the reconstruction of water pumping stations and electrical substations. This does not include social facilities and the improvement of adjacent green areas (Nivki Park, the lake, etc.).
But what is happening now, attempts to retroactively charge additional fees, only exacerbate the already difficult situation of the most acute housing crisis in the history of independent Ukraine. According to experts from the Ukrainian Association of Developers, such practices cause housing prices to rise, as they create a double, unpredictable financial burden on companies, which are forced to include these costs in the price per square meter.
“These costs cannot be predicted within the business model, as national legislation explicitly prohibits equity participation. The country’s political leadership bears particular responsibility in this situation, having publicly promised voters that it would abolish equity participation and improve the investment climate. However, in practice, this turned out to be a declarative gesture that was only partially implemented in real law. What we are seeing today directly contradicts the state’s stated goals of deregulation, support for the construction industry, and ensuring affordable housing,” Favorov noted.
According to experts from the Association of Developers, the situation can be remedied.
It is necessary to eliminate the legislative conflict and clearly stipulate that for construction projects that were started before January 1, 2021, and which, as of January 1, 2021, have not been accepted for operation, share participation agreements between developers and local authorities were not concluded before January 1, 2021, the payment of share participation shall not be accrued or made.
“This will be in line with the original intention of the legislator – to eliminate the quasi-tax and stimulate the development of the construction industry,” Favorov stressed.
The Ukrainian Association of Developers was founded in 2023. The association’s members implement projects that account for 26% of the Ukrainian market and 93% of the capital’s market.
https://drive.google.com/file/d/1w0XEn7Nw5q6TKFTM3mceLKIDCr-qebOn/view
The total area of residential buildings for which construction permits were issued (new construction) in January-March 2025 increased by 53.4% compared to the same period in 2024, reaching 1 million 409.8 thousand square meters, according to the State Statistics Service (Gosstat).
According to the statistics agency, in January-March 2025, the total area of new construction of apartment buildings increased by 54% compared to last year, to 1 million 360.2 thousand square meters.
The number of apartments registered for construction in the first quarter of 2025 reached 22,700, which is 36% more than in the first quarter of 2024. Of these, the number of apartments registered in apartment buildings increased by 64.4% to 16,200.
According to State Statistics Service data, the Kyiv region led in terms of new housing construction in January-March 2025, with 594,600 square meters, which is 4.3 times higher than in January-March last year. At the same time, 7,700 apartments were registered in multi-apartment buildings in the capital, and 1,500 in single-family homes.
Significant volumes of new housing construction were also recorded in the Lviv region – 248,000 square meters (2,200 apartments in multi-apartment buildings and 848 in single-family homes), which is 15.8% higher than last year.
In Kyiv, in the first quarter of 2025, the total area of new housing construction increased by 17% to 145,300 square meters (a total of 1,700 apartments).
The State Statistics Service reminds that the figures do not include territories temporarily occupied by the Russian Federation and parts of territories where hostilities are ongoing (or have been ongoing).
As reported, the total area of new housing construction in Ukraine in 2024 decreased by 7.2% compared to 2023, to 3.9 million square meters, while in 2023 it amounted to 4.2 million square meters, in 2022 – 6.67 million square meters, and in 2021 – 12.7 million square meters.
Turkish Onur Group plans to build 690 MW of new generating capacity in Ukraine by 2030, investing $450 million in the Ukrainian energy sector, Onur Group’s general manager in Ukraine Emre Karaahmetoglu said in an interview with Forbes Ukraine.
According to him, the company already has 150 MW of solar power plants, which were built before the war and are now successfully operating under a “green” tariff until 2030.
“The construction of 50 MW of solar power plants (SPPs) in the Vinnytsia region is continuing, plus 164 MW of storage (batteries). This is more than $60 million in investments, which we plan to complete by the end of the year — then there will be about 200 MW of solar power and 164 MW of batteries,” he said.
According to the CEO, Onur Group plans to build 120 MW of wind power plants (WPP) in the Zakarpattia region with a budget of about €120 million.
“Other companies are already operating WPPs in the Carpathians — we see prospects. A total of 320 MW of wind power is under development,” he added.
The company is also working on new projects in the Lviv and Volyn regions and is negotiating loans with international financial institutions.
In addition, Onur Group has almost completed the construction of the first phase of a WPP in the Volyn region for OKKO.
“Last week, the first turbine parts were delivered and installation began. The second phase, with a capacity of about 190 MW, is planned next. A total of 340 MW of capacity has been initiated in Volyn, and we, as a Lviv-based construction company, are actively working on this,” Karaahmetoglu said.
As noted in Forbes Ukraine, Onur Group Ukraine is part of the international Onur Group. In June 2025, the Turkish group’s business in Ukraine will include about 40 companies in 12 sectors of the economy, ranging from energy and mining to the hotel and restaurant business.
The group’s consolidated revenue fell by 18% in 2024 to UAH 8.9 billion, compared to UAH 32.4 billion in pre-war 2021.
The company has announced plans to invest $650 million in Ukraine by 2030 and estimates its investments over the previous 20 years of operation at around $570 million.
Scientists from the Kyiv National University of Construction and Architecture (KNUCA), together with partners, have begun implementing an international project to create new concrete mixtures using waste, in particular, destroyed structures, for construction using 3D printing and traditional methods, according to the KNUCA press service.
The release states that as part of the project “Development of new approaches and construction materials for the restoration of Ukraine’s damaged infrastructure with consideration for environmental sustainability,” researchers are developing a concrete mixture with the addition of materials resulting from the destruction of buildings and other industrial and agricultural waste.
The restoration of housing in Ukraine requires the introduction of universal rapid construction technologies that allow for the construction of sustainable and affordable buildings even in conditions of limited resources. Due to the war, many buildings in Ukraine have been destroyed. The remains of concrete structures can be effectively recycled and used for the construction of new housing. Compared to traditional construction methods, 3D printing of buildings can ensure faster construction rates, significantly less use of human resources, and savings in materials and energy.
The project is co-funded by the US Office of Naval Research and the US National Science Foundation (NSF). The research is being conducted as part of the multilateral partnership initiative ” International Multilateral Partnership for Ensuring the Sustainability of the Education and Science System in Ukraine (IMPRESS-U),” initiated by the Office of International Science and Engineering (OISE) of the US National Science Foundation with the involvement of researchers from Stony Brook University in the US and the Jan and Jędrzej Śniadecki University of Technology in Bydgoszcz, Poland.
The project will last two years. At KNUBA, the implementation of this project is entrusted to teachers, graduate students, and students of the Faculty of Construction and Technology, in particular, the Department of Building Materials and the Department of Building Structures and Products Technology.
Philip Morris Ukraine has opened a new modern shelter on the territory of its factory in the Lviv region, in which it has invested about UAH 60 million, according to a press release from the company.
“In the current circumstances, the safety of our people is not just a requirement of the times, but also our responsibility. (…) We continue to invest in Ukraine, and these investments demonstrate our long-term strategy as an investment ambassador and our support for the economy in the context of martial law,” said Maxim Barabash, CEO of the company.
The shelter is designed for 170 people and will provide protection for both factory workers and local residents during air raids or emergencies. It fully complies with all applicable safety requirements and standards and is designed to provide comfortable accommodation for people for up to 48 hours.
The space is equipped with a ventilation system using explosion-proof valves and air conditioning, an alarm and fire extinguishing system with backup power supply, a water supply and sewage system, a heating system, radio broadcasting, telephone communication, and video surveillance, places for rest and seating, and water and food supplies for long stays. The shelter takes into account the needs of people with disabilities. The premises include a medical corner, sanitary facilities, shower rooms, and a kitchen area.
Construction of the shelter began in September 2024 after the launch of the factory, in which the company invested $30 million. Prior to this, employees used a modernized shelter on the territory of the Lviv city community, in which the company invested about UAH 1.3 million.
Philip Morris was spun off from Altria in 2008 and is one of the world’s largest tobacco manufacturers. The company’s revenue for 2023 increased by 10.7% compared to 2022, to $35.2 billion. The report noted that Ukraine accounted for about 2% of total sales in volume terms and 1% in monetary terms.
In 2022, PMI reduced shipments to the Ukrainian market by 30.1% to 11.07 billion cigarettes and tobacco sticks due to the war, but in 2023, it managed to increase shipments of finished products by 8.4%, including 14.9% in the fourth quarter. In October 2023, the company announced that it had restored its share of the Ukrainian market to 24%. In 2024, Ukraine’s figures were excluded from PMI’s quarterly reports.
In addition to cigarette production, PMI develops and manufactures smokeless products—electrically heated tobacco products (e-cigarettes), nicotine-containing POD systems, and nicotine products for oral use. Sales of smokeless products accounted for 39% of PMI’s total net income in the first quarter of 2024 and 38% in the third quarter.
Philip Morris Ukraine has been operating in the Ukrainian market since 1994 and has invested over $750 million in the Ukrainian economy during this time. Since the start of the full-scale invasion, it has allocated over UAH 400 million to humanitarian projects.
Nine companies from the top ten made a profit last year.
According to the OpenDataBot 2025 Index, the total income of the leading construction companies amounted to UAH 49.49 billion. This is 41% more than in 2023. The top three leaders have remained almost unchanged for three years in a row. Nine companies from the top ten managed to make a profit last year. Half of the top companies are engaged in the construction of roads and highways.
The top ten construction companies in the OpenDataBot Index 2025 earned over UAH 49 billion in revenue. This is 41% more than in 2023. The combined profit of the leaders grew 1.6 times to UAH 3.09 billion.
The lion’s share of the top companies’ revenue comes from five companies specializing in road construction: 75% or UAH 36.9 billion.
Four other companies are engaged in the construction of residential and non-residential buildings, with a more modest contribution of 20% of revenue. One company in the ranking operates in the narrow field of exploratory drilling.
For the third year in a row, the top three leaders in the Construction Industry Index have remained virtually unchanged. The absolute leader is Avtomagistral-Pivden from Odesa, owned by Oleksandr Boiko. In 2024, the company earned UAH 13.2 billion (27% of the total revenue of the top companies), which is 1.6 times higher than in 2023. Profit reached a record 1.36 billion UAH.
In second place is Vinnytsia-based Avtostrada, owned by Maksym Shkil. The company earned 10.8 billion UAH (+30%) and increased its profit 1.6 times to 74.6 million UAH.
The company notes that Avtostrada is one of the ten largest donors to the Ukrainian Armed Forces, having transferred more than UAH 2.1 billion since the start of the full-scale war. The company is actively involved in the reconstruction of critical infrastructure, including water pipelines and energy facilities. It is also one of the largest taxpayers in its industry.
Third place went to Rostdorstroy in Odesa (Yevgeny Konovalov and Yuri Schumacher). The company increased its revenue by 15% (to UAH 6.85 billion), while its profit fell by a quarter.
Onur Construction International from Lviv (owned by Turkish entrepreneurs Cetinjeviz Onur and Ihsan) climbed to fourth place. Its revenue grew by 30% to UAH 3.82 billion, and its profit almost tripled to UAH 418 million.
Fifth place went to a newcomer to the Index, Atelier de France Kyiv, a company engaged in the restoration of architectural monuments. Its revenue grew 6.4 times to UAH 2.9 billion, and its profit tripled (UAH 44 million). The owner is Frenchman Antoine Courtois, Philippe, Marie.
Ferrostroy from Poltava returned to the Index after a year’s hiatus, increasing its revenue 1.7 times to UAH 2.62 billion and its profit 2.6 times to UAH 298 million. The company is engaged in the construction of buildings.
Kosul (part of Rinat Akhmetov’s SCM Group) lost a quarter of its revenue and four places in the ranking, falling to seventh place with UAH 2.6 billion. At the same time, its profit grew by 8% to UAH 758.8 million. This company accounts for a quarter of the earnings of the top ten companies.
Vladimir Vypyrail’s Kyiv Energy Construction Company showed the largest profit growth — 8.8 times (to UAH 16.9 million), although its revenue fell by 6% to UAH 2.3 billion.
Techno-Bud-Center (Andriy Yarema and Yuriy Khanin) is another newcomer. Revenue grew 1.6 times to UAH 2.2 billion, and profit grew 1.5 times to UAH 26 million.
Vesta-I, which was headed by a new owner in March 2025, Tajik citizen Karimi Asolat Ismatzoda, showed a fourfold increase in revenue (UAH 2.2 billion), but instead of profit, it reported a loss of UAH 1.9 million.
So, in 2025, the following companies left the rating:
