C) Describe a subject matter of foreign investments

The government registration of foreign investments is executed by the Government of Autonomous Republic of Crimea, regional, municipal public administrations of Kiev and Sevastopol within three business days after their registration in order specified by Cabinet Council of Ukraine.
Unregistered foreign investments don’t give the right to gain incentives and warranties prescribed by the Law.

The government registration procedure is prescribed by the Statute on Government Registration Procedure of foreign investments confirmed by the Regulation of Cabinet Council of Ukraine № 928 dated August 07, 1996.
For the government registration of investments the foreign investor or authorized hereby in established order, the body (“the Applicant”) files the following documents to the government registration authorities:

- Informational notification on placement of foreign investment into 3 samples filled in according to the form and in order accordant to addendums №1 and №2 to the present statute marked by the State Tax Incorporate by locus of the investment performance on its factual placement;

- Documents confirming the form of foreign investment performance (constitutive documents, agreements (contracts) on production cooperation, joint production and other types of joint investment activity, concession agreements and so on);

- Documents confirming the cost of foreign investment (in accordance with demands specified by Article 2 of the Law of Ukraine “On Foreign Investing Treatment”);
- Document certifying the placement of payment for the registration by the Applicant.

Words you may need:

addendum – додаток

accordance – згода, відповідність

сoncession – концесія, послаблення

constitutive documents – документи до заснування

incentive – спонукання

notification – повідомлення

specified – визначено

to gain incentives – набути стимулів

warranties – гарантії

samples – зразки

by locus – локусом

3. Read the text and say what you know about the foreign investment in Ukraine:

ІNVESTMENTS IN UKRAINE

Foreign investments can be executed in the following forms:
- Fractional participation in the enterprises that are founded jointly with the Ukrainian legal entities and individuals, or purchase of operating enterprise’s part;
- Enterprises foundation that are fully owned by foreign investors, branches and other separate subdivisions of foreign legal entities or acquisition of operating enterprises;
- Acquisition, that is not prohibited by the Laws of Ukraine, of movable and real estate, including houses, cars, possessions, premises, vehicles and other objects of property by means of direct property acquisition and property complex or in form of shares, bonds and other securities;

- Own acquisition or with help of the Ukrainian legal entities and individuals of the rights to exploit land or natural resources in the territory of Ukraine;
-Acquisition of other property rights;

- In other forms, those are not prohibited by the Laws of Ukraine, including cases which are without foundation of the legal entity on the basis of the agreements with subjects of economical activity of Ukraine.

Foreign investments can be invested in any objects, investment in which is not prohibited by the Laws of Ukraine.

The guarantees for the foreign investors are established by the Law of Ukraine. Specifically foreign investments in Ukraine don’t come under nationalization. The government authorities don’t have a right to embargo foreign investments except cases of salvage operations performance in the event of acts of providence, accidents, outbreak and epizootics. In this case the foreign investor is offered adequate and efficient compensation. The foreign investors have the loss indemnity right, including loss of benefit and moral damage caused to them in view of actions, non-activity or not duly performance of obligations by the government authorities of Ukraine or chairpersons prescribed by the Law as to the foreign investor. In the event of discontinuation of investment activity the foreign investor is guaranteed to receive return of his investing in natural form or in currency of investing without customs duty payment and of income from these investments in form of money or goods. The government also guarantees unimpeded and immediate transfer abroad of income and other funds in foreign currency gained on lawful business due to the foreign investments performance. If going forward the guarantees of foreign investments protection specified by the Law here of are changed by the special legislation concerning foreign investments the guarantees of foreign investments protection, then the guarantees of foreign investments protection specified by the Law will be implemented upon demand by the foreign investor during ten years since the date when such Law comes into effect.

Words you may need:

еmbargo – ембарго

to exploit – розробляти

to implement – виконувати, здійснювати

legal entities – юридичні особи

salvage – рятування судна

to specify – визначати, вказувати

obligation – зобов’язання

outbreak – вибух

acquisition – прийом

unimpeded – без перешкоди

lawful – правовий

chairpersons – головуючі

securities – гарантії

I. Choose the correct answer:

1. Foreign investments are:

а)values which are invested in objects of investment activity according to the legislation of Ukraine with the view of income receiving or social effect achieving;

b) the right to gain incentives and warranties prescribed by the Law;

c) going forward the guarantees of foreign investments protection specified by the Law.

2. The guarantees for the foreign investors are:

а)fully owned by foreign investors;

b)established by the Law of Ukraine;

с) offered adequate and efficient compensation.

3. Foreign investments can be invested in:

а) any objects, investment in which is not prohibited by the Laws of Ukraine;

b) the case the foreign investor is offered adequate and efficient compensation;

с) in the territory of Ukraine.

4. The enterprise gains status:

а) of the enterprise with foreign investment from the day of the foreign investment placing to its balance;

b) without permanent residents in the territory of Ukraine;

с) without customs duty payment.

II. Match what statements are true and what are false:

1. Foreign investment regulations in the territory of Ukraine with consideration for its peculiarities is regulated by the Law of Ukraine.

2. Foreign investments are values which are not invested in objects of investment activity according to the legislation of Ukraine.

3. The enterprise gains status of the enterprise with foreign investment from the day of the foreign investment placing to its balance.

4. Unregistered foreign investments don’t give the right to gain incentives and warranties prescribed by the Law.

5. The government registration procedure is not prescribed by the Statute on Government Registration Procedure of foreign investments.

6. The government authorities don’t have a right to embargo foreign investments.

7. Foreign investments can be invested in any objects, investment in which is not prohibited by the Laws of Ukraine.

8. Specifically foreign investments in Ukraine don’t come under nationalization.

UNIT 2

FOREIGN INVESTMENT

I. READING

a) stress the first syllable:

agency, climate, currency, deserts, exporter, favourable, reason;

b) stress the second syllable:

consumer, discount, disasters, exciting, expansion, exchange, location, proximity;

c) stress the third syllable:

destination, infrastructure, innovation opportunities, regulation, transportation.

1. Read and translate the text:

Foreign investment in Ukraine

At present, Eastern Europe countries are one of the most attractive direct and portfolio investment destinations with exciting opportunities for business development and expansion. Among these countries Ukraine for sure is one of the leaders due to a number of reasons:

- Ukrainian soil is the richest in the world (great opportunities for agricultural business);
- Ukraine has very tender and agro-friendly climate (no tornado, tsunami, deserts, dangerous insects, natural disasters);

- Ukrainian workers are skilled and lower-paid comparing to highly developed countries;
- Ukrainian market is huge – around 50 million consumers;

- Ukraine has extensive well-developed infrastructure (transportation, communication, hotels, etc);

- Ukraine is a net exporter of electricity (entrepreneur may save a lot on electricity though);
- Ukraine enjoys great discount on gas from Russia (gas price in Ukraine is much lower than in the EU);

- Ukraine enjoys very favourable location (between Europe and Asia, North and South Europe) and geographical proximity to the EU market;

- Ukrainian income and corporate taxes are the lowest in Europe (you can also switch to flat tax);

- Ukrainian environmental protection laws are very liberal comparing to highly developed countries;

- Ukrainian economy is steadily growing up to 6% from year-to-year;
Ukraine joined the WTO at the beginning of 2008.
When President Yushchenko took office in January 2005, he made improving the investment climate one of his top economic policy goals. This led to a number of new government initiatives, such as creation a State agency for investment and innovation and a number of investor councils chaired by the President. Over the past few years, Ukraine has liberalized its markets, reduced regulation, eliminated most licensing requirements, eliminated most restrictions on foreign exchange and begun the transformation of the agricultural sector from state-run farms to private agriculture. After years of hyperinflation and plummeting currency values, the national currency, the hryvnia, has been stable against the U.S. dollar for over four years.

Notes

¹ portfolio investment destinations – призначення портфельних інвестицій

² leaders due to a number of reasons – лідери із-за декількох причин

³ investor councils – ради інвесторів

4 eliminated most restrictions – виключено більшість обмежень