On December 17th the Ukrainian Parliament adopted the Law of Ukraine “On State Support for Investment Projects with Significant Investments”
The law includes the best practices of EU countries. According to the bill, the state will provide assistance and additional incentives for large investment projects both with local and foreign capital. The company should invest over 20 million euros and create at least 80 new workplaces with salaries at least 15% higher than average in the region for the same position. At the same time, the total amount of state support will not exceed 30% of the amount of investment in a project.
Among key incentives provided by the government in accordance with the law are
- tax incentives (exemption from the income tax, from customs duties, and VAT when importing new equipment into Ukraine);
- simplified provision of land necessary for investment project;
- construction&reconstruction of related infrastructure at the expense of the state;
- consolidation of investor guarantees through the conclusion of a direct agreement with the Government of Ukraine for 15 years.
Areas of investments eligible for state support:
- processing industry (except for the production and circulation of tobacco products, ethyl alcohol, cognac and fruit, alcoholic beverages)
- mineral processing (except for coal and lignite, crude oil and natural gas)
- waste management
- postal and courier activities
- arts and culture
- sports, tourism, and recreation.
According to Olga Magaletska, head of the National Investment Council of Ukraine for the last 20 years the government attracted on average 3 times fewer investments than other neighboring countries. At the same time, a lot of projects were not finished exactly because of a lack of state incentives for businesses. This bill will allow Ukraine to stay more competitive on the global investment map and attract capital to the country.