The Government Approves the First of Three Bills on Industrial Parks

Monday, July 12, 2021
The Government Approves the First of Three Bills on Industrial Parks

On Monday, July 12 the corresponding decision was supported by eleven participants in the Economic development committee meeting

The Economic development committee recommended to the parliament to adopt in the second reading the bill, taking into account the amendments that provide industrial parks and their residents with incentives to create new industries and accelerate the economic growth of Ukraine

The document provides for the possibility of budget financing for bringing infrastructure and engineering networks to industrial parks, the possibility of compensating the cost of connecting to networks within the park. It also provides for the possibility of compensation for interest rates on loans for the purchase of new equipment.

The bill contains an order for the government to develop and approve a strategy for the development of industrial parks, to create a state institution for the development of industrial parks. In the future, it is planned to create a state body to implement the policy in the field of industrial parks.

In addition, the Government is instructed to allocate funding in the amount of $74 billion for the implementation of these tasks during the development of the draft state budget for 2022 and the next 4 years.

The bill provides that only enterprises of the processing industry, processing industrial and household waste (except for waste disposal), as well as scientific and technical activities, information, and telecommunications sectors can apply for incentives.

The document contains a direct ban on the placement of gambling establishments in individual entrepreneurs and the production of excisable goods - except for cars and accessories for them.

In addition, the procedure for including industrial parks in the register and maintaining this register has been improved. The grounds for refusal of registration and the requirements for inclusion in the register have been determined. It is envisaged that it is possible to organize an industrial park not only on undeveloped territory but also on a territory with industrial buildings (so-called brownfields), where no economic activity has been carried out for at least 5 years and where real estate objects have been commissioned into operation no earlier than 10 years ago.

“All our neighbors use industrial parks as a tool for industrial development,” said Dmitry Kisilevsky, deputy chairman of the Economic development committee, who is a co-author of a number of amendments on incentives.

He cited Hungary as an example, where 30% of GDP is generated in industrial parks. “And Ukraine still does not use this tool. Of the 49 parks that are in the register, only a few actually work. Their impact on the economy is close to zero. The reason is the lack of incentives that make industrial parks attractive for the opening of new production facilities,” stressed D. Kisilevsky.

The bill supported by the Economic Committee is part of a package of three bills designed to launch the mechanism of industrial parks in Ukraine.

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