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Current Investment Trends
Business in Ukraine

Foreign direct investment continues to flow into Ukraine’s economy. The total volume of FDI in Ukraine as of 31 Dec. 2016 was USD 36 billion. It is less the normal, compared to the amount of foreign direct investment inflows detected in neighboring Central European countries.

This is USD 4 billion less than last year.

 Investors from over 125 nations are present in Ukraine. Among the Top-10 places of investment's origin are: Cyprus - USD 10,239 bln, Netherands - USD 6,1 bln, Germany - USD 1,6 bln, Russian Federation - USD 3,04 bln, Austria - USD 1,559 bln, Great Britain - USD 1,790 bln, British Virgin Islands - USD 1,8 bln, France - USD 1,305 bln, Switzerland - USD 1,390 bln.

The largest portion of investments from Ukraine went to Cyprus. Both inflows and outflows of investment between Ukraine and Cyprus represent the capital transactions and movements done by the major Ukrainian industrialists aiming at optimizing taxation as well as allocating money for developing the international structures of their own businesses. 

Investment Policy

Ukraine regulates foreign investment activity through two main laws: Law of Ukrain “On investment activity” from 18 September 1991, Law of Ukraine “On Protecting Foreign Investments in Ukraine” dated September 10, 1999, and the Law “On the Foreign Investment Regime” dated March 19, 1996. The National Bank of Ukraine has also adopted a number of resolutions that regulate currency issues involving foreign investment. At present, the mandatory registration of foreign direct investments is no longer required.

Ministry of Economic Development and Trade jointly with the Office of effective regulation developed a package ща bills that will help simplify the business environment and improve the investment climate in Ukraine. The adoption of this package will allow Ukraine in 2018 to rank in the top-40 of ease of doing business (Doing Business 2018).

The package provides a set of solutions, including the protection of shareholders' rights in the area of ​​contract enforcement in the field of alternative dispute resolution in construction, business registration etc.

In particular, the bill will simplify the registration of a new legal entity subject to VAT, will give businesses the opportunity to work without seals and reduce the number of commercial disputes on this issue.

The bill also provides for simplification of construction permits issuance, including the abolition of the rules on equity participation in the infrastructure of the settlement and the requirements to obtain the output data of the State Service for Emergency Situations. Instead, there is a mandatory requirement for higher education of an architect.

In the field of real estate, the possibility of unjustified reclamation  of finacila expert land valuation during the notarization of contracts on alienation of rights.

Ministry also proposes to simplify the procedure of  lending to businesses - particularly to establish the institute trusts as a means of insurance for liabilities before banks and increase the availability of information on the integrity of borrowers.

Some of the proposed legislation already approved by the Verkhovna Rada of Ukraine.

What is a foreign investor?

As defined by the Foreign Investment Law, a foreign investor may be any legal entity established in accordance with the laws of any country, any individual whose permanent place of residence is outside Ukraine, any foreign state or international organization, or any other foreign subject of investment activity.

The current law offers a number of guarantees to foreign investors:

· Unencumbered repatriation of profits from investments in Ukraine;

· Protection against nationalization and expropriation, except in the case of natural disasters, emergencies, epidemics, epizootics, where appropriate and effective compensation would be offered, and investors retain the right to reinvest their profits in Ukraine;

· Compensation of losses incurred as a result of unlawful action or inaction on the part of state agencies or government officials;

· Protection against future changes in legislation affecting these guarantees for a period of 10 years; and

· Exemption from customs duties on fixed assets imported to Ukraine as contribution to the charter fund of a company.

Foreign investors also enjoy the standard domestic regime for investing and doing business in Ukraine. The law states that foreign investors who implement projects in accordance with state programs for the development of priority branches of the economy and the social sphere may be granted preferential treatment.


Business in Ukraine