Baltic Journal of Economic Studies 264 Vol. 11 No. 2, 2025 This is an Open Access article, distributed under the terms of the Creative Commons Attribution CC BY 4.0 1 Kharkiv National University of Internal Affairs, Ukraine (corresponding author) E-mail: kukharyev@gmail.com ORCID: https://orcid.org/0000-0003-2086-9179 2 Institute of Lawmaking and Scientific and Legal Expertise of the National Academy of Sciences of Ukraine, Ukraine E-mail: A09111975@i.ua ORCID: https://orcid.org/0000-0002-8244-3563 3 Institute of Lawmaking and Scientific and Legal Expertise of the National Academy of Sciences of Ukraine, Ukraine E-mail: krasitskayalara@gmail.com ORCID: https://orcid.org/0000-0002-9187-4445 DOI: https://doi.org/10.30525/2256-0742/2025-11-2-264-272 REFORMING UKRAINE'S CIVIL LEGISLATION AS A TOOL FOR ECONOMIC RECOVERY AND ENSURING SUSTAINABLE DEVELOPMENT IN THE POST-WAR PERIOD Oleksandr Kukhariev1, Olena Kostiuchenko2, Larysa Krasytska3 Abstract. The post-war reconstruction of Ukraine necessitates two principal components: the large-scale physical rebuilding of destroyed infrastructure and the implementation of deep structural reforms. Among these reforms, the transformation of civil legislation is of particular significance. The effective regulation of property and contractual legal relations is a necessary prerequisite for the restoration of entrepreneurial activity, the stimulation of investment attractiveness, and the ensuring of overall legal stability in the country. In the context of Russia's full-scale armed aggression against Ukraine, which has precipitated profound socio-economic transformations, the necessity to update civil law instruments has become paramount. In the context of the strategic European integration direction of state policy, there has been a notable increase in the significance of harmonising national civil legislation with European Union law. The harmonisation process is driven by the objective of aligning Ukraine's legal framework with European standards, thereby establishing a legal environment characterised by transparency, predictability, and efficiency for market participants. It is imperative to direct particular attention to the process of repealing the Commercial Code of Ukraine, a seminal step that signifies a unification of private law. This provides a foundation for a conceptual revision of the provisions of the Civil Code of Ukraine, ensuring their alignment with contemporary challenges, the needs of the business environment, and the principles of sustainable development. The subject of this research is the reform of Ukraine's civil legislation in the context of post-war recovery and European integration processes. The objective of this study is to conduct a comprehensive analysis of the process in question, with a view to defining its role as a factor in economic growth, a guarantor of legal certainty for businesses and citizens, and an instrument for achieving sustainable development. The methodological framework of the research consists of methods of legal policy analysis, comparative law, and empirical research methods. The findings of the research indicate that the updated civil legislation must become the legal foundation for the effective functioning of market mechanisms, protection of investors' rights, modernisation of the status of business entities, and the implementation of sustainable development principles. The paper puts forward a series of conceptual approaches to harmonising national law with EU law, which it believes will contribute to the creation of a favourable institutional environment in the post-war period. Keywords: civil legislation, property rights, European integration, post-war recovery, EU law, contractual relations, economic recovery. JEL Classification: K11, K12, K33, O52, P48 Baltic Journal of Economic Studies 265 Vol. 11 No. 2, 2025 1. Introduction Civil law constitutes a fundamental branch of the national legal system, encompassing the regulation of a wide range of property and non-property personal relations. These relations directly impact the social, legal and economic stability of the state. Within the structure of law, civil law serves as a universal regulator of private relations, shaping the legal environment in which key economic processes take place, including the circulation of goods, services, capital, and intellectual property. This aspect assumes particular significance in the context of a deep economic crisis caused by the full-scale armed aggression against Ukraine, as well as the activation of the European integration course, which requires harmonisation of legal regulation with the acquis communautaire. In such circumstances, the need for a fundamental reconsideration of the principles of civil regulation and modernisation of the normative- legal framework of private law becomes crucial. The primary concern is the establishment of a contemporary legal framework that is capable of not only ensuring the effective protection of private interests, but also of contributing to the stable functioning of the market economy. Furthermore, this framework must enhance the competitiveness of national business, stimulate entrepreneurial initiative, attract foreign direct investment, foster innovation, and shape an attractive institutional climate. In this context, civil legislation assumes a particularly significant role as a system-forming legal mechanism designed to ensure a balance between private and public interests in the sphere of economic interaction. The development of Ukrainian civil legislation at the current stage is occurring in the context of a comprehensive transformation of socio-economic relations, driven by two main factors. Firstly, these relations are being impacted by the consequences of the war, and secondly, by global challenges related to technological and scientific progress. These changes present novel demands for civil law institutions, which must demonstrate sufficient flexibility to respond to shifts in the economic environment, including digitisation, changes in the logic of contractual relations, the spread of unconventional forms of ownership, and the activation of non-traditional sources of financing entrepreneurial activities. The importance of tools in ensuring the stability of property rights, safeguarding the interests of investors, creditors, and entrepreneurs, and enhancing legal mechanisms for fulfilling obligations, is of particular significance. At the same time, the importance of non-property personal rights is growing, primarily in connection with developments in medicine, genetics, bioethics and digital technologies. The right to life, dignity, personal security, protection of personal data and reproductive rights all form part of a new landscape of private legal relations that requires appropriate normative reflection. Concurrently, civil law is penetrating new areas traditionally considered peripheral, such as artificial intelligence, biotechnology, and big data. This signals the expansion of the boundaries of private regulation and an increase in its significance within the overall legal system. Consequently, contemporary civil law must be sufficiently flexible and responsive to changes in society, ensuring a balance between the protection of personal non-property rights and the effective functioning of the market economy. This approach is especially pertinent in the context of the profound economic and social crisis engendered by the full-scale armed aggression against Ukraine, as well as in light of the intensification of the European integration course, which necessitates comprehensive harmonisation of national legislation with the acquis communautaire. In such conditions, the modernisation of private law should not be considered as an isolated legal process, but as a part of a systemic transformation of the legal space. Such a transformation would be capable of responding to global challenges posed by technological progress, digitisation of society, the transformation of social institutions, and the growing role of the individual in the legal system. In light of these trends, Ukraine initiated a large- scale recodification of its civil legislation in 2019. The 2020 Concept for the Renewal of the Civil Code of Ukraine not only envisages the structural reorganization of the existing codified act, but also the deep modernisation of its provisions in light of European legal standards, digital challenges and social changes related to post-war transformation. Within the framework of this reform, the updated code should ensure an appropriate legal balance between protecting the rights of private law entities and effectively supporting economic development, as well as the formation of a stable, investment-attractive legal architecture. Consequently, the reform of Ukraine's civil legislation should not be confined exclusively to a legal reconsideration of the doctrinal foundations of private law. This instrument is pivotal in the implementation of the state's economic strategy, ensuring the sustainability of legal forms, adaptability to economic challenges, and contributing to the construction of a modernised, open, and integrated legal system within the European economic and legal environment. 2. Methodology The research employs an interdisciplinary approach, integrating legal analysis, comparative law, legal policy analysis and empirical observations, with elements of Baltic Journal of Economic Studies 266 Vol. 11 No. 2, 2025 economic-legal evaluation. This approach facilitated a comprehensive understanding of the reform of civil legislation, not only as a purely legal reform, but also as one of the key factors for ensuring sustainable economic development in Ukraine amid post-war transformation. The objective of the legal analysis was to identify the internal logic of normative changes, assess their compliance with the principles of civil law, and determine their potential impact on the legal regime of economic activity. It is important to note that particular consideration was given to the systemic character of the reforms, the congruence of the novel provisions with fundamental civil law categories, and the capacity of the newly established normative framework to bolster the dynamism of the private sector during the economic recovery period. The legal policy analysis method was utilised to examine national strategic documents and legislative initiatives that directly or indirectly affect the reform of civil law institutions. In particular, the study analysed: draft amendments to the Civil Code of Ukraine; the official position of the legislature on the abolition of the Commercial Code of Ukraine and unification of property rights regulation under a single civil law; and the relevant provisions of the Recovery Plan of Ukraine on creating a favourable legal environment for investment, business development, productivity growth and digitalisation of the economy. The application of this method enabled the identification of priority areas for legal modernisation, including: the deregulation and simplification of civil circulation procedures; the elimination of legal conflicts and duplication of norms; the strengthening of institutional guarantees for investors; the development of digital transactions; and the creation of legal tools to protect the rights of internally displaced persons in the context of restoring economic mobility. The comparative law method was utilised to analyse the experience of European Union countries (particularly France, Germany, and Poland) in civil regulation, with the aim of adapting national civil legislation to European legal standards. A particular focus was placed on the following aspects: the legal capacity of legal entities and their economic behaviour; the stability of contracts and the means of ensuring the performance of obligations in commercial activities; models of legal protection for investors and creditors, with particular reference to bankruptcy and restructuring procedures; and legal approaches to social and environmental responsibility in business. This analysis enabled the identification of potentially effective tools that could be implemented in Ukrainian legislation to stimulate business activity, improve legal certainty, and reduce transaction costs in civil turnover. The empirical approach was realised through the collection and analysis of factual data on the implementation of civil rights in the post-war period. The primary focus of the study was to assess the level of legal certainty, access to justice, the effectiveness of judicial protection of property rights, and the legal barriers that restrict economic initiative. It has been determined that there is an absence of stability in legal regimes across several domains of civil regulation. This has a detrimental effect on investment attractiveness, the predictability of contractual obligations, and the restoration of entrepreneurial activity in regions that have been affected by the war. In general, the methodological tools employed facilitated not only the coverage of the legal transformations of civil legislation, but also their assessment through the lens of economic efficiency, legal stability, institutional capacity, and alignment with the objectives of Ukraine's socio-economic recovery in the context of the profound transformation of public and private institutions. 3. Recent Research and Findings In the course of researching the issue of civil law reform as a tool for economic recovery and sustainable development, the works of the following scholars were analysed: Dovhert, Kuznetsova, Dzera, Karnaukh, E.O. Kharitonov, O.I. Kharitonova, Vashchak, Zub, Pohrebnyi, Kot, Borysova, Hrabar, Fajardo, Fici, Henrÿ, Hiez, Meira, Münkner, Snaith, Zweigert, and Kőtz. Dovhert (2019) provides a comprehensive justification for the prerequisites for initiating recodification, identifying key factors such as the transformation of social relations, the development of the digital economy, and the need for harmonisation with EU law. The author emphasises the necessity of resolving the discord between the Civil Code and the Commercial Code, which engenders regulatory uncertainty for business enterprises. Dovhert asserts that ensuring legal predictability is a prerequisite for long-term investment and the restoration of domestic economic activity. A particularly noteworthy element of the text is the author's thesis on the necessity of harmonisation with EU law, a process which would, in the author's opinion, foster stability in international commercial relations and facilitate the inflow of foreign capital. Kuznetsova (2021) focuses on the humanitarian aspect of the reform, highlighting the need to address bioethical and medical-legal challenges. Concurrently, she advances the argument that the effective regulation of personal non-property rights, encompassing reproductive rights and the right to a dignified end of life, constitutes an integral component of legal security, thereby exerting a significant influence on the prevailing investment climate. Upholding human dignity forms the social foundation for the development of the labour market, Baltic Journal of Economic Studies 267 Vol. 11 No. 2, 2025 healthcare systems, and insurance – key sectors of the post-conflict economy. In their respective works, Dzera (2023) and Karnaukh (2024) put forward the argument that the institution of preliminary contracts should be enhanced as a means of stabilising commercial relations. The proposals set out in the study contribute to transaction predictability, reduction of transaction costs, and the formation of contractual discipline. These are economically significant factors for restoring trust between business entities. In their 2021 publication, E.O. Kharitonov and O.I. Kharitonova (co-authors of the Concept for Updating the Civil Code of Ukraine) assert that the digitalisation of regulation and the establishment of legal certainty are fundamental to economic growth. The approach of the aforementioned parties is predicated upon the integration of economic rationality into the structure of civil law, with the objective of simplifying legal transactions, the development of smart contracts, and the utilisation of electronic evidence. These measures are intended to foster the development of the digital economy and financial technologies. Vashchak (2021) proposes the recognition of the legal status of virtual property, including NFTs, cryptocurrencies, and digital platforms. The legal recognition of such assets has been demonstrated to facilitate access to novel instruments for capitalising digital assets, to expand the range of financial solutions available to businesses, and to contribute to the legalisation and taxation of digital transactions. This is of particular importance for post-war budget revenues and for the stimulation of the IT sector. Zub (2021) calls attention to the deficiencies inherent in the prevailing methodology for evaluating legal entity legal capacity. The author emphasises the necessity to establish a more adaptable system of legal subjectivity that takes into account the interests of platform economies, social enterprises, and venture projects. These are forms of business with high innovation potential. Pohrebnyi and Kot (2021) emphasise the importance of civil law in creating a balance of power between the state and businesses. They view updating the Civil Code as a means of restoring entrepreneurs' trust in the legal system, which they consider to be a prerequisite for investment, lending and risk insurance. They argue that civil law should ensure the stability of institutional expectations. Borysova (2023) emphasises that contemporary legal entities must operate in conditions of digital transformation, global mobility and institutional competition. She proposes approaches to transforming corporate governance that will promote foreign capital inflow and the formation of transparent and responsible business structures. This is particularly pertinent in the context of infrastructure reconstruction and the development of logistics, energy, and financial sectors. Hrabar (2025) has demonstrated the necessity to modernise the classification of civil law objects by incorporating genetic, biomedical, and digital assets. The recognition of such objects has been demonstrated to foster innovation, stimulate the creation of biotech start-ups, establish platforms for the exchange of intellectual property, and attract venture financing. At the international level, the research of G. Fajardo et al. (2018) on the principles of EU co-operative law emphasises the combination of social mission with economic efficiency. Integrating such approaches into national legislation promotes the development of co-operatives, social enterprises, and agricultural associations – key actors in local economic recovery and job creation. Finally, the work of Zweigert and Kötz (1996) remains fundamental to comparative law. The study provides a methodological foundation for economically-oriented comparison of legal systems and demonstrates that the choice of a model of civil regulation affects the efficiency of using legal tools in economic activity. Analysis of scholarly sources confirms that reforming the Civil Code of Ukraine has significant economic value as well as legal value. Improving civil legislation can reduce transaction costs, strengthen legal certainty, stimulate innovation, improve the investment climate and support institutional development. Consequently, civil law emerges as a pivotal instrument in Ukraine’s post-war economic transformation. 4. Presentation of the Main Research Material The post-war recovery of Ukraine necessitates not only the physical reconstruction of infrastructure and financial resources, but also a profound transformation of institutions. It is incumbent upon the legal system to ensure not only stability and justice but also to engender favourable conditions for economic development, attracting investment and reviving entrepreneurship. In this context, the reform of civil legislation plays a pivotal role as the foundation for a new economic architecture of the state. The Civil Code of Ukraine (CCU), which was adopted in 2003, serves as the fundamental normative legal act of private law, regulating property, contractual, corporate, and personal non-property relations. Nevertheless, over the course of more than two decades, there has been a considerable shift in the socio- economic environment. The advent of digital assets, novel forms of ownership, innovative business models and heightened demands for transparency in institutional interactions have engendered the necessity to modernise private law regulation. Baltic Journal of Economic Studies 268 Vol. 11 No. 2, 2025 As articulated in the Concept for the Renewal of the Civil Code of Ukraine (2020), amendments to the CCU are to be informed not solely by legal considerations, but also by contemporary economic challenges. Civil law must evolve into an effective instrument for shaping a market economy, protecting the rights of transaction participants, and ensuring trust – both from domestic and international partners. At the governmental level, the process of renewal was initiated by Cabinet of Ministers Resolution No. 650 of July 17, 2019, which established a working group on the recodification of civil legislation. In 2021, a comprehensive monograph was published under the title Recodification of Civil Legislation of Ukraine: Challenges of Time, edited by N.S. Kuznetsova, was published. The study thus substantiates the systemic necessity of reviewing the CCU's structure and clarifying fundamental concepts of civil law. According to the vision of the developers, including Oleksii Movchan, one of the primary goals of the renewal is to align Ukraine's legal framework with European standards and provide predictability for economic actors (YurLiga, 2025; Judicial Legal Newspaper, 2025). An important guiding document is the Draft Common Frame of Reference (DCFR, 2009) – an attempt to harmonise EU private law, incorporating principles of good faith, legal certainty, and protection of the weaker party. The 2024 European Commission Enlargement Report (Ukraine Report 2024) explicitly emphasised the importance of aligning national legislation with the acquis communautaire, particularly in the field of private law. This underscores the strategic significance of updating the CCU in the context of Ukraine’s European integration trajectory. In 2025, several significant legal acts came into force, indicating Ukraine's ongoing commitment to modernising its legal framework and aligning civil legislation with the challenges posed by wartime and post-war circumstances. In particular, the Law of Ukraine No. 4292-IX, passed on March 12, 2025, aims to strengthen the protection of bona fide acquirers' rights, which are an essential element of legal security in real estate, corporate rights and asset transactions. The law clearly defines the criteria for good faith, imposes limitations on property claims against such acquirers and improves the guarantees of lawful possession, thereby aligning with European approaches to protecting parties in civil turnover. This reform is of significant practical importance in creating a stable property market, which is essential for attracting investment to the country. Another significant development was the enactment of Law of Ukraine No. 4196-IX of January 9, 2025, which governs the operations of legal entities during the transitional period. It introduces mechanisms for simplified reorganization, liquidation, management, and reporting for businesses affected by the war, as well as for enterprises that were relocated, are changing their legal form, or are transitioning to an electronic management model. This legislative act adapts corporate legislation to the realities of post-war economic recovery, facilitates the restoration of economic ties, and enables the creation of new forms of business that respond to modern challenges of flexibility, digitalisation, and globalisation. These legal provisions fulfil institutional and programmatic functions by establishing the framework for the reform of the Civil Code of Ukraine (CCU), thereby serving as a conduit between contemporary private law and the forthcoming updated edition of the CCU. Consequently, a transitional model of private law regulation is formed, which considers the complexity of the wartime period and identifies priorities for recovery based on justice, equality, and transparency. The updated CCU must take into account not only traditional private law institutions but also adequately respond to the environmental, social and digital challenges facing Ukraine. In this regard, the analytical report Ukraine’s Judicial Reform Agenda: Strengthening Democracy Amid War (CMI, 2024), correctly states that effective civil legislation is essential for fostering trust in the state's legal system among citizens, international partners, and businesses. It is only within a legal environment that guarantees the enforcement of contractual obligations, protection of investments, and transparency of judicial procedures that sustainable economic development and institutional recovery can occur following the destructive impact of armed conflict. It is imperative to direct particular attention towards the digital transformation of private law. In light of the emergence of fintech, digital markets and virtual economies, contemporary civil legislation must encompass provisions pertaining to digital assets, tokens, NFTs, virtual objects and data as legal entities, in addition to regulating the status of software and the outcomes of artificial intelligence activity. The proposal by Vashchak (2021) to introduce a separate category of virtual property in the CCU is of particular pertinence. The introduction of this category would facilitate the unification of approaches to the recognition, circulation, and protection of new legal objects that currently fall outside traditional legal constructs. Consequently, the implementation of civil law reform can be regarded as a catalyst for the comprehensive transformation of Ukraine's legal, economic, and institutional landscape. In the context of the emerging geopolitical landscape, the Civil Code must evolve into the foundational legal framework for reconstruction and modernisation, facilitating: Baltic Journal of Economic Studies 269 Vol. 11 No. 2, 2025 – Attraction of direct and portfolio investments in a legal environment; – development of entrepreneurship in both traditional and digital forms; – stimulation of innovative sectors (artificial intelligence, blockchain, startups); – provision of social guarantees for citizens and vulnerable groups; – integration into the EU legal space through implementation of DCFR and acquis communautaire provisions. There is a strong consensus with the profound insight articulated by Pohrebnyi and Kot (2021) that civil law reform is pivotal to establishing the rule of law. This is due to the fact that it reflects the genuine equilibrium between personal freedom, societal security, and market requirements. Furthermore, it is vital to acknowledge the validity of Vashchak's (2021) assertion that the recognition of virtual property will serve to enhance legal certainty within the digital environment. This assertion is of paramount importance from both a technological and strategic standpoint, ensuring the continued competitiveness of Ukrainian law within the global legal system. In summary, it can be stated with a high degree of confidence that the urgent necessity to update the Civil Code of Ukraine is evident, with the potential to become one of the primary instruments for national economic recovery, the restoration of trust in the state, and a vector for integration into the European civilizational sphere. The experience of EU Member States convincingly demonstrates that effective regulation of entrepreneurial activity can be implemented through different legal models – either within a general civil code or through separate commercial or trade codes. For instance, France operates under a Commercial Code that provides a specialised legal framework for business activity, particularly in contract law, bankruptcy, and trade registry matters. Meanwhile, Italy relies on a Civil Code that integrates both general norms of private law and specialised provisions on commercial contracts, as well as competition law. Poland offers an additional illustration of a combined model, as evidenced by the existence of both the Civil Code and the Commercial Code, the latter of which is responsible for regulating the legal framework governing business associations. Simultaneously, the 2018 Entrepreneurs' Law, which superseded the preceding Act on Freedom of Economic Activity, codified the fundamental principles of business regulation in a spirit of openness and transparency. It is evident that these legal instruments exemplify a commendable degree of legislative adaptability to economic imperatives. This adaptability is achieved not solely through technical legal changes but also via strategic orientation towards the development of a sustainable business environment. It is also worth noting that, in recent years, there has been a general European trend towards reducing regulatory pressure on small and medium-sized enterprises. For instance, the European Union adopted the Small Business Act in 2008, revising it in 2011 to address the challenges of post-crisis economic recovery. Another significant reference point is the European Commission's deregulation initiative, which advocated for the reduction of administrative burdens, the simplification of registration and reporting procedures, and the harmonisation of rules across the EU (Prysyazhniuk, Kovalchuk, Shkelebei, Karlin, 2025). In this context, reforming Ukraine’s civil legislation, particularly by repealing the Commercial Code, is strategically important for post-war economic recovery and sustainable development. The adoption of Law No. 4196-IX was a pivotal moment in this process. Not only did it eliminate the systemic legal dichotomy between the CCU and the Commercial Code that had caused legal uncertainty for years, it also initiated the transition towards a unified, coherent model for the regulation of entrepreneurial activity under private law. The central idea of the reform is the unification of the legal framework for all business entities – regardless of ownership type or organisational-legal structure. Henceforth, legal entities in both the public and private sectors will be governed by the same norms of the Civil Code. This will ensure uniform judicial practice, transparency of economic processes, and simplification of the regulatory environment. One important practical aspect of this reform is the reorganisation of state and municipal enterprises. The law says that all of these must change into different types of companies, such as joint-stock or limited liability companies, within three years. The objective of this measure is to ensure transparency in the management of state assets, improve the efficiency of public resource use, and reduce corruption risks, which is especially relevant in the context of large- scale national reconstruction. Concurrently, the establishment of new state enterprises in their conventional form is prohibited, signifying a definitive departure from the obsolete Soviet legal model. These changes will also affect the private sector. Enterprises that continue to operate under outdated legal structures, such as private enterprises or entities established by civic organisations, will be required to convert into business companies or automatically acquire limited liability company (LLC) status. This will eliminate legal ambiguity, simplify registration and management procedures, and establish equal starting conditions for businesses of all sizes. However, as with any large-scale reform, the abolition of the Commercial Code and the renewal of civil Baltic Journal of Economic Studies 270 Vol. 11 No. 2, 2025 legislation are accompanied by a range of challenges. These include the necessity to adapt numerous sector- specific laws that directly or indirectly relied on the provisions of the Commercial Code, as well as the rethinking of judicial practice in the context of the new legal framework. Concurrently, legislators and the expert community are engaged in efforts to facilitate a seamless transition, address legal lacunae, and establish efficacious methodological support for entrepreneurs. It is evident that the reform of civil legislation, which includes the abolition of the Commercial Code, is an integral component of Ukraine's economic recovery. The establishment of such a legal environment is conducive to the facilitation of transparent, predictable, and modern business practices, aligning with European principles of fair competition, equality of market participants, and minimal state interference. For legal entities, entrepreneurs and investors, this necessitates adapting to new legal realities by updating founding documents, conducting legal audits and reviewing business procedures. Concurrently, this transformation engenders novel opportunities, including the attraction of investment, the cultivation of international trust, and the enhancement of business efficiency. Consequently, the reform of Ukraine's civil legislation in the post-war period will serve a dual purpose: firstly, the elimination of outdated legal remnants of the past; secondly, the laying of the legal foundation for a new economy focused on sustainable development, digitalization, and integration into the European legal system. 5. Conclusions As a result of the study on the reform of Ukraine’s civil legislation as an instrument for economic recovery and sustainable development in the post-war period, the following key findings have been established: Relevance of civil law reform. Ukraine's current civil legislation faces a number of challenges in the context of post-war reconstruction, which significantly limit its effectiveness as the foundation of the legal system. While the Civil Code of Ukraine is consistent with the fundamental principles of contemporary private law, its provisions are not yet fully aligned with the realities of a market economy, digitalisation, globalisation, and integration processes. Key issues include inconsistencies with other branches of law, particularly commercial law, regulatory duplication, the outdated doctrinal foundations of certain legal institutions and limited legal enforcement capacity to provide businesses with stability and predictability. These shortcomings are particularly critical in the context of post-war recovery, as they hinder the attraction of investment, the implementation of large-scale projects, the protection of the rights of market participants, and the development of legal certainty and trust. Abolition of the Commercial Code and integration of private law. The abolition of the Commercial Code of Ukraine, as part of the reforms introduced by Law No. 4196-IX, is a significant step in transforming Ukraine’s legal system. This move will eliminate the legal competition between the Civil and Commercial Codes that has caused inconsistent legal practice, parallel court rulings and legal uncertainty for businesses and public authorities for years. The rejection of separate commercial regulation allows for the establishment of a unified and coherent system of private law, contributing to economic stability through greater legal clarity, lower transaction costs, and improved business efficiency. Of particular significance is the transition towards the restructuring of state-owned enterprises into business companies, a measure that is expected to result in enhanced corporate responsibility and transparency in the management of public assets. European experience as a reference point for reform. European experience demonstrates a diversity of civil regulation models, but with a common trend – giving priority to a civil code or a unified body of private law. It is evident that EU countries, including France, Italy and Poland, have established comprehensive legal systems that guarantee flexibility and adaptability in the face of contemporary economic challenges. For Ukraine, it is imperative to concentrate on establishing a unified civil legislative framework that eradicates the necessity for discrete commercial regulation. Moreover, alignment with European standards in areas such as consumer protection, e-commerce, corporate governance, and digital contracts is imperative. This will facilitate the integration of Ukraine's economy into the European legal space and enhance its investment appeal. The economic impact of reformed civil legislation. It is vital for the establishment of a favourable investment climate in Ukraine that Reformed civil legislation serves as a foundation for legal stability. Clear, transparent, and effective regulation of civil-law relations – such as contracts, obligations, corporate mechanisms, inheritance, and property rights – lays the groundwork for building trust among both domestic and foreign investors. The implementation of European corporate governance standards, the simplification of business legal forms, and the elimination of overlaps between the Civil and Commercial Codes will reduce transaction costs, increase Ukraine's competitiveness in global markets, and foster an environment conducive to the development of small and medium-sized enterprises. Consequently, civil law becomes not only the foundation of a market Baltic Journal of Economic Studies 271 Vol. 11 No. 2, 2025 economy, but also a strategic instrument for the nation's sustainable development. Prospects for further research. It is recommended that future scholarly research in this field concentrate on adapting contract regulation to new and flexible forms of entrepreneurship, particularly in the context of digital technologies and innovation. In addition, it is imperative to investigate the incorporation of contemporary corporate governance instruments and legal mechanisms that have the potential to facilitate sustainable economic growth in the post-war era. References: The Civil Code of Ukraine. The Law of Ukraine of January 16, 2003 No. 435-IV. Available at: https://zakon.rada.gov.ua/laws/show/435-15#Text The Law of Ukraine "On Amendments to the Civil Code of Ukraine to Strengthen the Protection of the Rights of the Good Faith Acquirer" of March 12, 2025 No. 4292-IX. Available at: https://zakon.rada.gov.ua/laws/card/4292-20 The Law of Ukraine "On Specifics of Regulation of the Activities of Legal Entities of Certain Organisational and Legal Forms in the Transitional Period and Associations of Legal Entities" of January 9, 2025 No. 4196-IX. Available at: https://zakon.rada.gov.ua/laws/show/4196-20#Text The Resolution of the Cabinet of Ministers of Ukraine "On Establishment of a Working Group on Recodification (Update) of the Civil Legislation of Ukraine" of July 17, 2019 No. 650. 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Available at: https://esquires.ua/gospodarskij- kodeks-skasovanij-pravovi-naslidki-ta-vikliki-dlya-biznesu/ Received on: 05th of April, 2025 Accepted on: 17th of May, 2025 Published on: 10th of June, 2025