Ukraine Launches State Support Mechanism for Major Investment Projects

by Cheplyk Roman
Monday, March 18, 2024
Ukraine Launches State Support Mechanism for Major Investment Projects

The Cabinet of Ministers of Ukraine has officially approved the procedure for providing compensation for the construction of engineering and transport infrastructure facilities by investors undertaking significant investment projects

This step also includes compensating costs related to the connection to necessary engineering and transport networks for project implementation.

This regulatory act marks the final piece needed to initiate investor support mechanisms, as explained by the Ministry of Economy. The decision was taken during a government meeting on March 15.

Investors looking to embark on projects within Ukraine, valued at 12 million euros and projected to last up to 5 years, are now eligible for state support. These projects can span various sectors, including the processing industry, mineral extraction (with subsequent processing or beneficiation), transport, logistics, education, scientific research, healthcare, waste management, and activities related to art, culture, tourism, sports, and electronic communications.

The process for obtaining state support for significant investment projects involves:

  • Submission of an application and relevant documents by the investor (either a resident or non-resident legal entity) to the Ministry of Economy for project evaluation.
  • Assessment of the investment project by the Ministry of Economy, followed by a decision on the project's feasibility and the potential conclusion of a special investment contract, or a refusal.
  • Conclusion of a special investment agreement between the investor, the Cabinet of Ministers, a local self-government body (if applicable), and the applicant.

Investors are encouraged to seek advisory assistance from UkraineInvest for guidance on preparing and implementing significant investment projects.

State support can cover up to 30% of an investment project's costs, offering various benefits such as:

  • Preferential rights to use state or communal land plots.
  • Compensation for the costs of constructing engineering and transport infrastructure, as well as connection costs.
  • Tax incentives.
  • Duty-free import of necessary equipment.
  • Exemption from compensation for the loss of forestry production.

Investment projects must aim for the construction, modernization, or technical re-equipment of facilities while creating new employment opportunities. The required job creation metrics include at least 10 new positions with salaries 50% above the regional average for similar activities, or 30 new positions with salaries 30% above the average, or 50 new positions with salaries 15% above the average, further contributing to the region's economic development.

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