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Assets held hostage by war: how to save your business when registries are down (Guide March 2022)
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Assets Hostage to War: How to Save Business When Registries Are Down
Paralysis is not a strategy. Let’s have no illusions. As of March 2022, your property title certificate is just a piece of paper if it burned down with the office. The State Register of Rights to Real Estate has been closed by the Ministry of Justice.
You cannot sell a warehouse, you cannot officially transfer corporate rights, and even bank collateral is now an equation with many unknowns.
While the Armed Forces of Ukraine hold the front, your task in the rear is to prevent your business from disappearing legally. Because when the war ends (or the front line stabilizes), not only investors will come. Creditors, tax authorities with retroactive audits, and raiders exploiting the documentation chaos will come too.
We at LBA (Law Business Association) have been operating since 2004, survived the crises of 2008 and 2014, but today’s challenges are unprecedented. Below is the action algorithm we are implementing for our clients right now.
1. Registries are Closed. How to Prove You Are the Owner?
An owner’s biggest fear right now is “black registrars.” But the Ministry of Justice made a knight’s move and simply disconnected access to the SRRRE (State Register of Rights to Real Estate). This protects against electronic asset theft but creates a stalemate for transactions.
Raider Logic During War
They are waiting for the registries to open. As soon as access is restored, fake sales contracts dated “February 2022” may flood in.
Legal Hack from LBA: While the registries are “down,” conduct an internal audit of your papers. Chaos is a fraudster’s best friend, so order in documents is your shield.
- Electronic Copies: If original statutory documents and property titles were in a safe in an active combat zone (Kharkiv, Bucha, etc.) — consider them gone. Urgently restore them via “Diia” (where possible) or form an evidentiary base using scans sent to counterparties previously.
- Alternative Fixation: If you transfer property (e.g., equipment for rent) — draw up Acceptance Acts with witness signatures and video recording of the process. This will not replace a notary, but it will work better in court than a “gentleman’s word.”
Read more about asset protection tools in our practice: Real Estate and Land Law by LBA.
2. Force Majeure: No Magic Wand Exists
On February 28, the CCI (Chamber of Commerce and Industry) of Ukraine published a letter recognizing the Russian military aggression as a force majeure circumstance. Many businessmen exhaled: “We can stop paying rent and loans.” In practice, this is a trap.
The CCI letter is a general document. In court, your landlord or bank will say: “There was a war, yes. But why specifically did your company in Lviv, where there is no shooting, stop paying?”
What to Do for Court Protection:
- Notify the counterparty of the inability to fulfill obligations in writing (email, messengers with screenshots).
- Collect evidence of the direct impact of the war on your business (warehouse destruction, driver mobilization, road closures).
Remember: without a proven causal link, referring to force majeure will not work.
3. Tax Revolution: Switching to 2%
The Verkhovna Rada is adopting amendments to the Tax Code (Draft Law No. 7137-d), effectively creating an internal offshore zone. A single tax of 2% instead of VAT and income tax is a chance to save working capital.
Tax Authority Logic: Right now, they are giving relief so the economy doesn’t die. But the moratorium on audits is not eternal. When the war ends, they will check every operation.
Switch to the simplified system if your margin allows, but do not stop keeping primary documentation. The chaos of war is no excuse to lose invoices. Absence of primary documents today means fines tomorrow.
More on tax optimization in our section: Tax Law and Planning.
4. Destroyed Property: Preparing for Reparations Now
If your facility has suffered from shelling, do not clear the rubble before documentation! We don’t know when Russia will pay. But we know for sure: those who do not document damages according to procedure now will not receive a penny later.
Action Algorithm (according to current norms and ECHR practice):
- Call SES and Police: Obtain a fire/destruction act and an extract from the ERDR (Unified Register of Pre-trial Investigations regarding the opening of criminal proceedings).
- Internal Commission: Draw up an inspection act of the enterprise (free form, but with photos/videos and geolocation tags).
- Media: If news outlets wrote about the “strike” — save links and screenshots.
You can review current legislation (Presidential Decree on Martial Law) on the Verkhovna Rada website.
FAQ: Questions of March 2022
1. Can I fire employees now if the office is bombed?
Dismissal “due to war” is a direct path to court and paying compensation to the employee. The Labor Code applies. Use the mechanism of suspending the employment contract (a wartime innovation). You do not pay wages, but you do not fire the person either.
2. Do powers of attorney work if notaries are not working?
Most notaries are not working, and renewing a power of attorney is problematic. We recommend using the director’s QES (Qualified Electronic Signature) to sign documents where possible, instead of paper powers of attorney.
3. How to transfer currency abroad to purchase goods?
The NBU has introduced strict restrictions (Resolution No. 18). “Critical Import” is a list of goods for which you can pay in foreign currency. If your product is not there, the payment will not go through. You need to look for legal debt restructuring schemes or use foreign accounts (if they were opened before 24.02).
War will write off many mistakes, but not legal negligence. Your task now is to “freeze” risks and preserve assets at least on paper and digital media.
While the state is engaged in defense, protecting your business is solely your responsibility. We at LBA are working in Kyiv, we are in touch and ready to help with documenting damages and relocation support.
Protect your business so there is something to rebuild.
About the Author
Denys Fedorkin — Managing Partner of the law firm Law Business Association (LBA). He has over 17 years of experience in business protection.
Specialization: tax law, anti-raiding activities, and complex asset security. Combines deep knowledge of legislation with a practical understanding of business processes.
Need consultation on asset protection?
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