Current Investment Trends
Foreign direct investment continue to flow into Ukraine’s economy in 2011. The total volume of FDI in Ukraine as of Jan. 1, 2011 was US $44.7 billion, 11.6% more than on Jan. 1, 2010.
While small compared to the amount of foreign direct investment inflows detected in neighboring Central European countries, Ukraine has observed a steady surge of investment inflows since the Orange Revolution of 2004 slapped the country onto the radar screens of Western investors. The cash inflows continue to stream in from so-called tax-heaven countries, such as Cyprus and the Netherlands. The largest FDI inflows to Ukraine as of January 1, 2011 were from Cyprus, with 22.2% of cumulative FDI, Germany with 15.8%, the Netherlands with 10.5%, Russia with 7.6%, Austria with 5.9%, France with 5,3 % and the United Kingdom with 5.1%. Direct investment from Ukraine was US $6.8 billion as of 01.01.2011. 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. Over more than a decade, Cyprus offshore economy has been playing an important role as a shelter for the evading Ukrainian money. The lion’s share of FDI to Ukraine was invested in the financial services and industry sector: US $15 billion or 33.7% of total FDI and US $ 14 billion or 31.4% of total FDI respectively. The real estate business and wholesale and retail trade absorbed 10.7% and 10.6% of total investment.
At US $2.1bn, the city of Kyiv got most of the FDI. Other top performers included Kharkiv and Dnipropetrovsk Oblast.
|