FAQ

An investment project applying for state support in accordance with the Law of Ukraine “On State Support of Investment Projects with Significant Investments in Ukraine” (hereinafter referred to as the Law) must meet the following requirements:
1) spheres of implementation: processing industry, production of biogas and biomethane, extraction for the purpose of further processing and/or enrichment of minerals, waste management, transport, warehousing, postal and courier activities, logistics, education, scientific and scientific and technical activity, health care, art, culture, sports, tourism, resort and recreation sphere and electronic communications;
2) form of reproduction: construction, modernization, technical and/or technological re-equipment of investment objects, acquisition of the necessary equipment (equipment) and accessories for it, and may also involve the construction of engineering and transport infrastructure objects;
3) creation of new jobs: at least 10/30/50 new jobs with an average salary that is, respectively, 50%/30%/15% higher than the average salary in the region for the relevant type of activity;
4) the size of significant investments: at least 12 million euros excluding value added tax;
5) project implementation period: not more than 5 years.

1. Exemption from corporate income tax – for 5 consecutive years from the moment of submission of the application to the regulatory authority (except for projects in the fields of extraction with the purpose of further processing and/or enrichment of minerals).
2. Exemption from payment of value added tax and customs payments during the import of equipment and machinery (provided that the relevant goods were manufactured no earlier than 3 years before the date of their importation and were not in use).
3. Construction or compensation of costs for the construction of engineering and transport infrastructure objects (roads, communication lines, means of heat, gas, water and electricity supply, engineering communications, etc.) necessary for the implementation of an investment project with significant investments (except for projects in the field of iron ore enrichment);
4. Establishing a lower rate of land tax and rent for state and communally owned land or exemption from payment of land tax (except for projects in the fields of extraction for the purpose of further processing and/or enrichment of minerals).
5. A simplified procedure for providing a land plot of state or communal property for use (rent) and with a preferential right to acquire such a land plot for ownership after the expiration of the special investment contract.
6. Reimbursement of costs for connection and connection to engineering and transport networks.
7. Exemption from compensation for losses of forestry production.

The total volume of significant investments in investment objects (non-current assets) is calculated without taking into account value added tax and includes all capital costs that have been and/or will be invested in the construction, modernization, technical and/or technological re-equipment of investment objects (including capital costs for design), the purchase of the necessary equipment (equipment) and accessories for it and the construction of the necessary objects of engineering and transport infrastructure in the process of implementing the investment project. Costs unrelated to the implementation of the investment project cannot be included in the total volume of significant investments.

The applicant can choose any forms of state support provided by law, but the total amount of state support for all selected types should not exceed 30% of the planned amount of significant investments.

According to Part 5 of Article 1 of the Law, an investor with significant investments is a legal entity registered in Ukraine, which was specially formed for the implementation of an investment project with significant investments and whose economic activity is directed exclusively to the implementation of an investment project with significant investments and the execution of a special investment contract. Other economic activities, except those related to project implementation, cannot be carried out by an investor with significant investments.

The applicant must take steps to create a legal entity — an investor with significant investments. If the applicant is a legal entity registered in Ukraine, specially formed for the implementation of an investment project with significant investments, and meets all the requirements and restrictions established by law, it can become a party to a special investment agreement as an investor with significant investments.

The applicant must prepare an application and submit it to the Ministry of Economy of Ukraine. If the application meets all the requirements of the legislation, the Ministry of Economy of Ukraine issues a conclusion on the feasibility of implementing the investment project and signing a special investment agreement.

After signing a special investment agreement, the project receives the status of an investment project with significant investments and can receive state support.

No earlier than 18 months before the date of submission of the application to the Ministry of Economy of Ukraine, the applicant may make significant investments in investment objects in an amount not exceeding 30% of the total amount of significant investments required for the implementation of the investment project with significant investments.

n investor with significant investments can apply for state support only if he is another subject of an industrial park that does not have the right to receive state incentives in accordance with clause 9 of part 1 of article 1 of the Law of Ukraine “On Industrial Parks”.

If, during the implementation of a special investment agreement, the actual volume of significant investments is greater than that stipulated in such an agreement, the total amount of state support remains unchanged.

Significant investments in investment facilities for the implementation of an investment project with significant investments should exceed the amount equivalent to EUR 12 million excluding value added tax. The planned (total) amount of significant investments should include all capital expenditures that have been and/or will be invested in the construction, modernization, technical and/or technological re-equipment of investment facilities (including capital expenditures for design); purchase of the necessary equipment (machinery) and components to it; construction of the necessary engineering and transport infrastructure in the process of implementing the investment project.

In order for an investment project to be eligible for state support under the Law No. 1116-IX, the total capital investment should be at least EUR 12 million, excluding value added tax, and not in the total of all planned investments, which may include investments in working capital, payroll, etc.) 

No, the clause 1 of the part 1 of the Article 5 of the Law No. 1116-IX provides an exhaustive list of areas of investment project implementation, namely processing industry (except for manufacturing of tobacco products, ethyl alcohol (except for the production of bioethanol intended for use as a fuel component), cognac and fruit spirits, alcoholic beverages), biogas and biomethane production (including liquefied or compressed), extraction for the purpose of further processing and/or enrichment of minerals (except for coal and lignite, crude oil and natural gas), waste management, transportation, warehousing, postal and courier activities, logistics, education, scientific and scientific-technical activities, healthcare, art, culture, sports, tourism, resort and recreation and electronic communications.

The energy sector is not included in this list. 

No, the availability of non-current assets on the balance sheet of a legal entity (potential investor with significant investments) implementing the project is a non-compliance with the requirements of the Law No. 1116-IX, namely the clause 4 of the part 1 of the Article 1 of the Law No. 1116-IX.

The only exception is when such a legal entity is both an applicant and a potential investor with significant investments and has already made significant investments not earlier than in the last 18 months prior to the submission of the application in the amount of up to 30% of the total significant investment and intends to acquire the status of an investor with significant investments. 

No, an investor with significant investments is a legal entity registered in Ukraine, which is specially established to implement an investment project with significant investments, that is a party to a special investment agreement and whose business activity is aimed exclusively to the implementation of an investment project with significant investments and the execution of a special investment agreement. All capital expenditures should be attributed to significant investments and be directly related to the investment project and its activities. 

The presence of investments made in non-current assets on the balance sheet of a legal entity – a potential investor with significant investments earlier than 18 months before the date of application is a non-compliance with the provisions of the law, namely the clause 4 of the part 1 of the Article 5 of the Law No. 1116-IX. 

No, if the applicant is a legal entity registered in Ukraine that is specially established to implement an investment project with significant investments and meets all the requirements and restrictions established by the Law No. 1116-IX, it becomes a party to the special investment agreement as an investor with significant investments.

The balance sheet of such a legal entity may contain only non-current assets related to the implementation of the investment project, which were invested not earlier than in the last 18 months prior to the submission of the application in the amount of up to 30% of the total significant investment.