Financial sector news

The Government of Ukraine has approved a new procedure for stimulating the creation and operation of industrial parks, allocating UAH 1 billion from the state budget for 2024. The programme provides funds for the construction of engineering and transport infrastructure and compensation for grid connection, making it attractive to investors, the Government Portal  reports.

"This is an important step for economic development. Industrial parks should become a catalyst for attracting investment in the real sector and increasing production,’ said Yulia Svyrydenko, First Vice Prime Minister of Ukraine and Minister of Economy of Ukraine.

"This is an important step for economic development. Industrial parks should become a catalyst for attracting investment in the real sector and increasing production, and the new incentive procedure will contribute to their effective functioning. The Government has also created a number of safeguards to ensure responsible and efficient use of public funds. This year, the state budget provides UAH 1 billion for state incentives for industrial parks,’ said Yulia Svyrydenko, First Vice Prime Minister of Ukraine and Minister of Economy of Ukraine.

The procedure for providing state incentives provides for the allocation of funds to initiators or management companies of industrial parks for the arrangement or construction of engineering and transport infrastructure, as well as partial reimbursement of the cost of connection to the electricity grid.

The maximum amount of incentives is UAH 150 million, with co-financing of the work to be provided in a 50-50 ratio. Initiators or management companies of industrial parks from the de-occupied territories will be able to implement projects in an 80-20 co-financing ratio, meaning that the state will pay up to 80% of the estimated cost of the work, but not more than UAH 150 million.

The new Procedure also provides for the introduction of certain safeguards. Each applicant undertakes to build at least 5,000 square metres of space on the territory of the industrial park within 3 years and to attract at least 2 participants. If the conditions are not met, the applicant must return all the budget funds spent to the state.

In order to benefit from the programme, you must:

• Submit an application to an authorised bank by 15 August;
• The bank will check the application;
• The Ministry of Economy of Ukraine will check the documents and make a decision on the provision of assistance;
• In case of a positive decision, an agreement is concluded;
• Funds will be transferred to a special account, and payment will be made after the work is completed and the applicant pays its share.

For investors, industrial parks solve several pressing problems at once: land issues, connection to networks, availability of an industrial building, and lower equipment costs.

This is an opportunity for park residents to:

• not to pay import duties and VAT on equipment;
• not to pay income tax for 10 years, subject to reinvestment;
• receive a preferential rate of real estate tax and a preferential land payment (subject to local government approval).