1. Establisment of Subsidiaries

Establishment of subsidiaries by economic entities is governed by the Law of Ukraine “On Economic Entities”. For example, the Law stipulates the following: “company shall have the right to establish branches, representative offices, and subsidiaries in Ukraine and abroad in accordance with the effective legislation of Ukraine”. The Law “On Foreign Investments” specifically establishes procedure for foreign investments by way of establishment of enterprises in full ownership of foreign investors. Article 3 of the Law “On Foreign Investments”

The legislation of Ukraine imposes restrictions exclusively on state enterprises as to establishment of any enterprises, including subsidiaries. Item 1 of Decree of the CMU “On Regulations of Activity of Agents of Entrepreneurial Activity Established with Participation of State Enterprises” of 31 December 1992 No 24-92

2. Release of Assets through Joint Activity without Establishment of Legal Entity

Agents of entrepreneurial activity have the right to exercise joint activity on the territory of Ukraine upon conclusion of corresponding economic agreement. Joint activity of two and more agents of entrepreneurial activity allows them to join efforts with the purpose of development of additional sales markets, optimization of costs by cooperation, reduction of the organizational costs and other overheads (for example, in comparison with the costs of reorganization by merger) without establishment of a new legal entity