Investment projects with significant investments
The Law of Ukraine “On State Support for Investment Projects with Significant Investments in Ukraine” and accompanying legislation provides investment projects that meet the criteria established by the Law, state guarantees on stable legislation for 15 years, on compensation for losses caused by state bodies, as well as provides such investment projects with state support of up to 30% of amount of significant investments in one of the following forms:
- exemption from corporate income tax – for 5 years from the moment of filing the application (except for projects in the sphere of extraction for further processing and/or enrichment of minerals);
- exemption from VAT payment for operations on import of new equipment and components to it (provided that the relevant goods were made not earlier than three years before the date of their import and were not used), according to the list and volume that are approved by the Cabinet of Ministers of Ukraine;
- exemption from customs duties for importing of new equipment and components to it (provided that the relevant goods were made not earlier than three years before the date of their import and were not used), according to the list and volume that are approved by the Cabinet of Ministers of Ukraine;
- construction at the expense of state, local budgets of engineering and transport infrastructure (highways, communication lines, utilities etc.) necessary for the realization of investment project with significant investments (except projects in the sphere of iron ore enrichment);
- establishment by the local self-government bodies of land tax rates and rent payments for land of state and communal property in the less amount than a land tax, as well as exemption from land tax (except for projects in the sphere of extraction for further processing and/or enrichment of minerals);
- simplified procedure for granting right for use (lease) of land plots of state or communal property with the pre-emptive right for acquisition of such a land plot to the property after the expiration of a special investment agreement;
- compensation for costs of connection to engineering and transport infrastructure (highways, communication lines, utilities, etc.);
- exemption from compensation for losses of forestry production.
No earlier than 18 months before the date of submission of the application to the authorized body, the applicant may contribute investments in investment objects in an amount not exceeding 30% of the total volume of significant investments required for the implementation of an investment project with significant investments.
Additionally, if the implementation of an investment project with significant investments requires connection to the networks of heat, gas, water and electricity supply, utilities, etc., including networks and/or communications owned by natural monopolies, the state may assist the investor with significant investments in the process of such connection within the framework of a special investment agreement (in particular, by negotiation).
The incentives stipulated by law are provided for investment projects, for which a special investment agreement is concluded with the state and which meet the investment project requirements established by the law, namely:
- 12+ mln euro of investments into the project since the conclusion of the special investment agreement;
- 10+ new jobs created since the conclusion of the special investment contract with the average wage, which at least 15 percent bigger than the average wage for the respective duties in the respective region;
- project envisages construction, modernization, technical and/or technological re-equipment of investment objects;
- project implementation period shall not exceed 5 years;
- project is implemented in one of the areas provided by law:
– processing industry (except manufacturing and trade of tobacco products, ethyl alcohol, cognac and fruit alcohol, alcohol beverages);
– extraction for the purpose of further processing and/or enrichment of natural resources (except hard coal, lignite, crude petroleum, natural gas);
– waste management;
– transportation;
– warehousing;
– postal and courier activities;
– logistics;
– education;
– R&D;
– healthcare;
– arts and culture;
– sports;
– tourism;
– hospitality;
– electronic communication;
– production of biogas and biomethane (including liquefied or compressed).