Removal of Franchising (Commercial Concession) Agreements Registration Requirement

Baker&McKenzie, Kyiv, Ukraine
Fri, April 24, 2015

From 5 April 2015 it is no longernecessary to register commercial concession (franchising) agreements in Ukrainepursuant to the Law of Ukraine No. 191-VIII "On Amendments to CertainLegislative Acts of Ukraine on Simplification of the Conduct of Business(Deregulation)". 

Implications for right holders and the market

Until recently there was a legal requirement for commercialconcession (franchising) agreements to be state registered for the parties tobe able rely on such agreement vis-a-vis third parties in Ukraine.

From 5 April 2015 this requirement to register commercialconcession (franchising) agreements in Ukraine has been removed.

What the Law says

The provisions of the Civil Codeof Ukraine that required state registration of commercial concession(franchising) agreements for the parties to be able rely on such agreements inrelations with third parties were removed by the Law of Ukraine No. 191-VIII“On Amendments to Certain Legislative Acts of Ukraine on Simplification of theConduct of Business (Deregulation)”, dated 12 February 2015, which entered intoeffect on 5 April 2015. Simultaneously the provisions of the Commercial Code ofUkraine that also required state registration of commercial concession(franchising) agreements were removed by the same law. Thus, currently there isno statutory requirement for the state registration of commercial concession(franchising) agreements.

At the same time, Order No. 1601/5 on Approval of the Procedure for StateRegistration of Commercial Concession (Sub-concession) Agreements, dated 29September 2014, remains in effect, even though it makes references to nowremoved provisions of the Civil Code of Ukraine on state registration ofcommercial concession agreements. It should be noted however that an administrativeclaim for the cancellation of Order No. 1601/5 is now being heard in theDistrict Administrative Court of the city of Kyiv.

Conclusion

The parties to a commercial concession (franchising) agreement may opt toregister such agreement if they wish, however such registration is notobligatory now in view of the above-mentioned law.