The Law of Ukraine “On Industrial Parks” and the supportive legislation provides a variety of tools for development of industrial parks in Ukraine. The legislation also stipulates the requirements for initiation, management and operation of industrial parks.
The following incentives are eligible to managing companies, companies-initiators and/or participants of industrial parks:
- full or partial compensation of interest rates on loans for the purpose of arranging an industrial park, as well as for the purpose of carrying out economic activity within an industrial;
- non-refundable financing for the purpose of arranging an industrial park and/or construction of related infrastructure facilities (highways, communication lines, heat, gas, water and electricity, utilities, etc.);
- compensation for connecting to engineering grids (incl. compensation for connecting to the electric grid, national railway system, gas-, heat- and water supply networks);
- 10-year corporate income tax exemption earned from their business activity within the industrial park. However, the respective CIT exemption would be applied only if the respective amount of money will be reinvested by the participant into the investment project development;
- VAT exemption on operations of importing of new equipment (components) by the participants of industrial parks intended only for the own use of the participants of industrial parks;
- favorable land tax rates might be granted for participants of industrial parks by decision of a local government;
- exemption from taxation of customs duties on new equipment (components) imported by such participants for their own use only.
An initiators of industrial parks can be:
- On land of state or communal property – state authorities, local self-government bodies, which are empowered to dispose of land plots, as well as tenants (legal or natural persons);
- On private property lands – owners or tenants (legal or natural persons).
If the land designated for creation of an industrial park is privately owned, the managing company shall be determined by the company-initiator. The agreement for the creation and operation of the industrial park (typical agreement) shall be concluded between the company-initiator and the managing company for the term within the period for which the industrial park intended to be created.
The land should meet the following requirements:
- belong to industry lands;
- have an area of 10 to 1000 ha;
- be suitable for industrial use, taking into account the conditions and restrictions established by the relevant urban-planning documentation.
State incentives in the above forms are provided to managing companies, companies-initiators and/or participants of industrial parks from the moment of inclusion into the register of industrial parks, provided that the economic activities are conducted within industrial park only in the following spheres of economy:
- processing industry;
- recycling of industrial and/or household waste (except for waste disposal);
- activities in the IT sector and telecommunications.
At the same time, in the territory of industrial parks it is forbidden to conduct the following economic activities:
- production of excise goods, except for the production of cars and its cabs, trailers and semi -trailers, motorcycles, vehicles intended for transportation of 10 persons or more, vehicles for transportation of goods);
- issue and organization of lotteries;
- activities in the gambling market;
- mediation in employment abroad;
- industrial catch of aquatic bioresources outside the jurisdiction of Ukraine;
- production and sale of narcotic drugs, psychotropic substances and precursors;
- household waste disposal.