The Procedure for Using Funds from the State Budget to provide State Support for the Implementation of Investment Projects involving Significant Investments was adopted at the session of the Cabinet of Ministers of Ukraine on 26 April 2024.
Conditions for receiving State Support
The total amount of state support can be up to 30% of the investment. Such support is available to investors planning to implement a project in Ukraine with an investment volume of at least EUR 12 million and a duration of up to 5 years in the following sectors: processing industry, extraction for further processing and/or enrichment of minerals, transport and logistics, education, scientific activities, healthcare, waste management, arts, culture, tourism, sports, and electronic communications.
Investors may receive several types of state support, subject to the above requirements, including:
- Preemptive rights to use state-owned or municipally owned land plots;
- Compensation for the costs of constructing engineering and transport infrastructure facilities, as well as costs associated with connecting to engineering and transport networks;
- Tax benefits;
- Duty-free importation of necessary equipment;
- Exemptions from compensation for forestry production losses.
Projects must involve the development, renovation, technical or technological upgrading of the relevant investment objects, as well as the creation of new jobs. The investor must ensure the creation of at least:
- 10 new jobs with salaries at least 50% higher than the average salary in the region for the same type of activity;
- Or 30 new jobs with salaries at least 30% higher than the average salary in the region for the same type of activity;
- Or 50 new jobs with salaries at least 15% higher than the average salary in the region for the same type of activity.
The state budget has earmarked UAH 3 billion this year to support such investment projects.
Control over Investors' Activities
The government will monitor investors' compliance with the terms of the agreement. If the Ministry of Economy finds that the amount of funds invested is less than EUR 12 million, the investor must return the entire amount of state support received to a special account of the Ministry within one month.
If state financial control authorities establish that an investor has illegally received compensation or partial compensation, the investor must also return the entire amount of compensation received within one month.
Request advice from our seasoned Corporate and M&A Practice - https://www.integrites.com/practices/corporate-and-m-a/