Special Economic Zones (SEZs) and Industrial Parks: Incentivizing Factory Development in Ukraine

by Roman Cheplyk
Monday, May 1, 2023
Special Economic Zones (SEZs) and Industrial Parks: Incentivizing Factory Development in Ukraine

Ukraine has been seeking ways to boost its economy and attract foreign investors

One of the strategies that have been employed is the creation of Special Economic Zones (SEZs) and Industrial Parks. These are designated areas that offer favorable business conditions, incentives, and support services to encourage companies to invest and develop their operations.

SEZs and Industrial Parks in Ukraine are geared towards industrial production and manufacturing. They are often located near ports, airports, and highways, making them easily accessible for logistics and distribution. These zones provide a range of incentives such as tax breaks, reduced customs duties, and simplified regulatory procedures, among others.

Investors who establish their factories in SEZs and Industrial Parks benefit from lower operational costs due to the lower taxes and reduced fees. The streamlined regulatory process makes it easier and quicker to set up a business, obtain permits, and start operations. The zones also offer access to various support services, such as legal and accounting services, which are essential for businesses operating in a foreign country.

The Ukrainian government has taken steps to ensure that SEZs and Industrial Parks are attractive to foreign investors. They have implemented measures such as the creation of a one-stop-shop for investors to facilitate investment procedures and to ensure that all the necessary services are provided in one place.

One example of a successful SEZ in Ukraine is the Lviv Tech City, which is located in the city of Lviv. The zone specializes in IT and technology, and it has attracted a range of international companies, including SoftServe, Intellias, and EPAM. The zone provides a range of benefits, including a five-year tax holiday, zero customs duties, and streamlined administrative procedures.

Another example is the Industrial Park "Bila Tserkva" located in the Kyiv region. It offers investors access to modern infrastructure and support services, as well as tax breaks and customs exemptions. The park specializes in manufacturing, logistics, and distribution, and it has attracted international companies such as Nestle and Myronivsky Hliboproduct.

In conclusion, SEZs and Industrial Parks are an excellent opportunity for investors looking to establish their businesses in Ukraine. These zones offer a range of benefits that make it easier and more affordable to operate in the country. The Ukrainian government has shown its commitment to creating a favorable business environment for foreign investors, and the success of Lviv Tech City and Industrial Park "Bila Tserkva" is a testament to their efforts. As Ukraine continues to develop its economy and infrastructure, SEZs and Industrial Parks will play an increasingly important role in attracting investment and spurring economic growth.

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