The Cabinet of Ministers of Ukraine (CMU) enacted Resolution No. 292 on March 15, 2024, to streamline the process of state support for projects with substantial investments.
To introduce a novel investment mechanism, it's essential to outline the following general specifications:
1) Investment Projects relate to such industry sectors as:
|
Processing industry (except for the production and circulation of tobacco products, alcohol/alcoholic beverages) |
Biogas and biomethane production (incl. liquefied or compressed) |
Extraction for the purpose of further processing and/or enrichment of mineral resources (except for coal, raw oil and gas) |
Arts, culture, sports, tourism, and resorts, recreation |
Healthcare |
|
Transport, warehousing |
Waste management |
Education, scientific and research and technical activities |
Postal and courier activities, logistics |
Telecommunications |
2) Requirements for the Investment Project to apply for state
support:
|
The amount of investment must exceed 12 million Euros |
The fulfillment period of the Investment Project - less than five years from the date of signing of the Agreement. |
|
The total amount of the state support to implement the Investment Project – 30 or less % of the amount invested in the project. |
The Investment Project should create a minimum of fifty new jobs, with an average salary higher than the average salary paid for the same activity in the region. |
3) Parties of Special Investment Agreement:
- the CMU,
- a local self-government entity (if involved in implementing a project with substantial investments),
- an investor with significant investments,
- the applicant.
Considering the specifications mentioned above, investors now have the opportunity to implement projects valued at €12 million or more over up to 5 years in Ukraine within the relevant sectors.
Moreover, the Resolution clarifies the following provisions which are crucial to enable Investment Project:
Types of State Support which make up to 30% of the value of the Investment Project with significant investments:
- special right to use land plots of state or communal property;
- compensation for construction costs of engineering and transport infrastructure facilities and costs for connection to engineering and transport networks;
- tax benefits;
- duty-free import of essential equipment;
- release from compensation for losses of forestry production.
Requirements for investment objects: provision of the construction, modernization, technical or technological re-equipment of the relevant investment objects.
Requirements for the creation of new jobs:
|
Number of new jobs |
Percentage of salary which should be higher than the average salary in the region for the same type of activity |
|
10 |
at least 50% |
|
30 |
at least 30% |
|
50 |
at least 15% |
Application procedure of state support for the implementation of
the Investment Project with significant investments:
- the applicant (legal entity/resident or non-resident) submits an application to the Ministry of Economy together with related documents;
- after the evaluation process the Ministry of Economy provides a conclusion on the expediency/improperty of its implementation and conclusion of a special investment contract or refusal to sign it;
- signing of a special investment agreement by the parties;
- possibility for the applicant to contact UkraineInvest for information and advisory assistance to support in the preparation and implementation of the IP with significant investments.
Limitations for applicants.
Applications can not be operated by:
- Ukrainian or foreign legal bodies if they are:
- are registered by residents of the Russian Federation or countries from the FATF list
- are under special economic or other sanctions in Ukraine
- are under bankruptcy proceedings, liquidation, or reorganization
- are registered in offshore zones
- Non-profit enterprises, and organizations.
- State and municipal enterprises, in which more than 50% of shares of the share capital is owned by the state/territorial community.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
