State support of investment projects plays a significant role for both investor and the local community. Governments try to attract investments by different incentives: tax deductions, reimbursements, exemptions and state guarantees. On February 13, 2021, the newly introduced Law “On State Support for Investment Projects with Significant Investments in Ukraine” entered into force. Authorities believe the Law will secure foreign investors and stimulate investments in Ukraine.
The Law introduces two new definitions: “an investor with significant investment” and “investment project with significant investments”. The authorities plan to support both investors and projects by different legal and tax benefits. In a rough estimate, the government support can be as high as 30% of the value of an investment project. The support will cover:
- VAT, customs and import duty exemptions.
- 5-year exemption from CIT.
- right to use state land for the investment project.
- local infrastructure support.
Despite the tax and legal advantages, the new Law will create a special government institution. It will support and help investors to resolve issues during the whole life cycle of a project. In order to benefit from the new amendments projects must meet the following criteria:
- The investment amount should be more than €20 million;
- Project duration shall not exceed 5 years;
- An investment project must create at least 80 new jobs.
For further information on how you or your business can prepare for the new standards or to discuss your potential actions, please contact our Kyiv Tax and Legal Department at email@example.com.
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