When it surfaces
A technology review lists the subsidiary's ERP as software of Russian origin. Nobody planned for the line item, and now it sits in a data room next to the things that actually matter.
This happens in four situations: a trade sale, a private equity investment, a bank facility review, and increasingly an insurance renewal. In all four, the question comes from someone who is not a technologist and who needs a short defensible answer.
The mistake companies make is treating it as an IT question. It is a governance question, and the answer that satisfies a buyer is not technical.
It is rarely a legal problem
Worth stating plainly, because the alarmist framing is common and unhelpful.
In Ukraine, restrictions apply to state bodies and critical infrastructure. Private companies are not universally prohibited from running 1C. As of mid-2026 there is no general statutory requirement forcing private companies to migrate by a fixed date — a bill that would have introduced one was rejected by parliament in June 2026.
So a buyer's counsel will usually not find a breach. What they will find is a set of practical exposures, and those are what get priced into the deal.
| Exposure | Why a buyer cares |
|---|---|
| No vendor support | Sanctions removed official support and updates. Nobody is obliged to fix a critical fault |
| Statutory drift | Tax rules change; if the configuration is not maintained, compliance degrades quietly |
| Key-person dependency | One local accountant is the only route to the numbers. That is a single point of failure on a whole entity |
| Unverifiable reporting | Group cannot independently check the figures it consolidates |
| Audit friction | Interfaces and documentation are not in English; sample testing needs translation |
None of these is a deal breaker on its own. Together they support a warranty request, an escrow, or a price adjustment — which is why the question is worth answering before it is asked.
Four questions a buyer will actually ask
From the reviews we have seen described, the questions are consistent and narrow.
- Is the software still supported, and by whom? Not "does it work" — who is contractually obliged if it stops.
- How do you know the statutory reporting is current? When was the configuration last updated for a change in tax law?
- Who can produce the numbers if that person leaves? Named backup, or none.
- What is the plan and what does it cost? A dated plan with a budget, or an intention.
Notice that none of them asks you to have already migrated. A buyer is pricing risk, not demanding a finished project.
What a good answer looks like
The difference between a costly answer and a cheap one is specificity.
Costly: "We are aware of the issue and plan to address it." This reads as no plan, and gets priced as no plan.
Cheap: "The entity runs 1C. It is not prohibited for private companies and we hold documentation of that position. Support ended in 2022; we maintain the configuration through a local contractor, most recently updated in March 2026 for the VAT change. Two people can produce statutory reporting. We have a quoted migration to Business Central at $8,000 over twelve weeks, scheduled for Q1 after the transaction."
The second answer costs nothing extra to be true — it is the same situation, documented. What it removes is the buyer's need to assume the worst.
Timing: before or after the deal
The instinct is to migrate before going to market, so the question never comes up. That is usually wrong.
Migrating before a sale costs money and management attention during the period when both are most constrained, and the buyer may have their own group platform they intend to roll out anyway. You would be paying for a system they will replace.
Not migrating and having no answer is worse. It reads as a governance gap and invites a warranty.
The middle path is what most sellers should do: obtain a scoped, quoted migration plan and put it in the data room. It converts an open-ended risk into a known number, which is exactly what a buyer needs in order to stop worrying about it.
A plan costs the price of a scoping engagement. The alternative is having the buyer estimate it themselves, conservatively, and deduct that estimate from the price.
A pre-diligence checklist
Six items, all of which can be assembled before anyone asks.
- A one-page position note: what the software is, its regulatory status for private companies, and the source for that position.
- Maintenance record: who maintains the configuration and the date of the last statutory update.
- Named backups: at least two people who can produce statutory reporting.
- Data export test: evidence that master data and balances can be extracted — run it once, keep the output.
- A quoted migration plan with scope, timeline and price.
- Group reporting note: how figures reach the parent today and what would change.
The fourth item is the one people skip and the one that reassures most. A buyer worried about a locked-in system relaxes considerably when shown that the data comes out cleanly. The mechanics are in the data preparation checklist.
For the wider picture of what a migration involves, see your Ukrainian subsidiary runs 1C; the cost side is in what migrating from 1C costs.
Frequently asked questions
Is running 1C a legal breach for a private company in Ukraine?
Generally no. Restrictions apply to state bodies and critical infrastructure, and as of mid-2026 there is no general statutory requirement forcing private companies to migrate by a fixed date — a bill that would have introduced one was rejected in June 2026. The exposures are practical rather than legal.
Should we migrate before selling the business?
Usually not. It consumes money and management attention when both are constrained, and the buyer may intend to roll out their own group platform anyway. A scoped and quoted migration plan in the data room achieves most of the benefit at a fraction of the cost.
What actually gets priced into a deal?
Not the software itself but the exposures around it: no vendor support, statutory drift, dependency on one person who can produce the numbers, and reporting the group cannot independently verify. Together these support a warranty request or a price adjustment.
What is the single most reassuring thing to show a buyer?
Evidence that the data comes out cleanly. Run a full export of master data and balances once, keep the output, and put it in the data room. A buyer worried about lock-in relaxes considerably when they can see the exit is tested.
How much does a migration plan cost to obtain?
The price of a scoping engagement, which is a fraction of the project. The alternative is letting the buyer estimate the migration themselves — conservatively — and deduct that estimate from your price.