How does Ukraine foster investments? In the new issue of What's On Kyiv magazine, Marina Ryashchenko, Senior Associate at EVERLEGAL, shared her views on the matter.
Read the article below or on What's On Kyiv website, issue 29, page 21
Information about the author:
Marina Ryashchenko - Senior Associate at EVERLEGAL, focuses on International Arbitration and Cross-border litigation. To find out more about Marina follow by the link.
Ukraine Fosters Investments
During his speech at World Economic Forum in Davos the President of Ukraine, Mr Volodymyr Zelenskyy announced that Ukrainian Government developed a novelty plan aimed to attract more investments to Ukraine.
The first advantage is the so called "Investment Nanny" for investors who are ready to put their hard-earned USD 100 million into the Ukrainian economy. This option envisages a special contract with the government for the appointment of a "guardian" who will take care of your business routine in Ukraine, help you with all formalities you may face, speaks 4 languages and will be available 24/7 for your comfort. Sounds intriguing, isn't it?
However, the mechanism of implementation of this idea is misty. First of all, the Ukrainian legislation does not provide for such servants who may help you to pass all bureaucratic procedures set forth by the state "in a speed line". In other words, the state promises to solve problems you may face while passing through its own procedures.
Moreover, the concern rises: why such preferences shall be given to the investments with a threshold of USD 100 million only? In the light of "fair and equitable treatment" standard the investors with a more modest inputs may be not very happy and, who knows, may claim for certain compensations.
Another point of concern is the settlement of potential disputes arising out of the actions of the Investment Nanny. If the contract for "Investment Nanny" service is entered on behalf of the Ukrainian government, who shall be responsible for losses caused by misconduct of such consultant if any? This question has not been addressed by the Ukrainian officials yet and gives forum for discourse.
The second benefit offered by Ukraine to the potential investors is the tax holidays for the first 5 years. This option is promised to those willing to engage in large-scale privatization worth USD 10 million or more. In numbers the investors shall save 18% of their income being at least USD 1,8 million annually. In 2020 the government plans to sell about 500 state-owned companies and thus needs to provide certain guaranties to the investors in the circumstances of instable Ukrainian economy and undergoing reforms.