Significant investment legislation – Ukraine’s pro-European choice

Ukraine continues to implement reforms to improve its investment climate to attract domestic and foreign investment, in particular through the development of its legal framework and business preferences. The Law of Ukraine “On State Support of Investment Projects with Significant Investments in Ukraine” is one of the most important such incentives.

This law provides for state support for investors planning to implement projects in Ukraine worth €12 million or more.  Under the Law on Significant Investments, UkraineInvest provides free assistance to investors in preparing and submitting an application to the Ministry of Economy for recognition of an investment as significant (including documents proving the applicant’s financial capacity, feasibility study of the project, documents confirming the absence of restrictions specified in Part 4 of Article 7 of the Law, etc.). 

This was stated by Oleksandr Melnychenko, Acting Executive Director of UkraineInvest, during the First Foreign Investments Congress’24. 

Oleksandr Melnychenko noted that state support for investors will amount to up to 30% of the investment in the form of in-kind support:

• exemption from income tax (optional for 5 years) – the condition does not apply to projects in the field of extraction for the purpose of further processing and/or enrichment of minerals;

• VAT exemption on imports of new equipment and components – the list and equipment will be approved by the Cabinet of Ministers of Ukraine for each project; 

• exemption from import duties on new equipment and components – the list and equipment will be approved by the Cabinet of Ministers of Ukraine for each project;

• exemption from land tax/reduced tax rate or land rent;

• exemption from compensation for loss of forest production;

• construction/compensation for construction of engineering and transport infrastructure;

• lease of state or municipally owned land without tender;

• compensation for the cost of connection and interconnection of engineering and transport networks.

“Since 2023, successful cases leading to the conclusion of special investment agreements between the Government of Ukraine and investors have shown that the mechanism for recognising investments as significant really works. UkraineInvest’s place in this system is clearly defined – it is the effective development of investment practice and the development of work on attracting and supporting a significant investor. Our task is to continue to be an effective intermediary between business and the state, to demonstrate the effectiveness of the Ukrainian investment sphere in practice,” said the Acting Executive Director of UkraineInvest.

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