Ukraine introduces system of targeted incentives for foreign investors

A Cabinet of Ministers Resolution published today introduces a new approach to Ukraine’s investment attraction strategy, Advisor to the Premier Vladyslav Kaskiv announced at a presentation of the “Foreign Direct Investment in Ukraine: Action Plan for 2010” project.

Mr. Kaskiv noted that attracting investment was a key element of the Government’s anti-crisis strategy. The system that was presented involves targeted support for specific investors and investment projects. The Government plans to give the go-ahead to 10 strategic projects next year, worth an expected minimum of US $7 billion in investment and to give initial approval to 40 key sector and regional projects worth no less than US $5 billion in investment.

These projects will be developed on the basis of a single investment project standard using UNIDO criteria. With this purpose in mind, a Fund to Finance Project Documents is being set up that will be supported, among others, at the cost of international organizations. Plans are to hold a National Investment Forum in June 2010 and take a road-show to 42 financial centers around the world.

The National Agency for Foreign Investment and Development (Ukrzovnishinvest) was set up to take on such assignments. Its main purpose will be to foster the carrying out of projects with foreign investment.

Ukrzovnishinvest Director Serhiy Taran noted that a “Project Exchange” will also be set up, consisting of a tri-fold database with investment projects (strategic major projects, investment real estate and minor projects) based on UNIDO standards; a “one-stop shop for foreign investors to enable them to get the necessary package of documents promptly; and an internet portal for investment opportunities in Ukraine. Mr. Taran pointed out that this kind of approach was used by those countries that have seen an investment breakthrough.

The implementation of this project will be assisted by USAID and EU specialists. The expectation is that this process will be highly dynamic, with the minimum of pressure on the State Budget.

Ukrzovnishinvest includes Invest Ukraina, a state enterprise run by Serhiy Yevtushenko, which will be responsible for the hands-on servicing of projects, the Ukrainian Center to Foster Foreign Investment, and the Center for Investment and Innovation Programs under the National Agency for Foreign Investment and Development in Ukraine (Ukrzovnishinvest).

According to international organizations, every additional 1% of FDI translates into 0.4% growth of overall GDP.

Tags: investment