Investment legislation

Ukrainian legislation provides that (with some few exceptions), foreign investors are authorized to carry out their investment activity in Ukraine on the same basis as Ukrainian domestic investors (national treatment).

Ukraine has modern and up-to-date investment legislation in line with international standards (Ukraine ratified and transposed the WTO Agreement on Trade-Related Investment Measures (Trims), Convention on the Settlement of Investment Disputes between States and Nationals of other States (Washington, 1965) and International Centre for the Settlement of Investment Disputes agreement (Seoul, 1966).

All foreign investors are entitled to the following guarantees provided that their investments have been duly registered with the appropriate local state authorities (national treatment to all investors, 10-year protection against legislation change, ban to nationalize, confiscate or seize investment by governmental authorities, reimbursement of all damages caused to investor, a right to wind up your business and repatriate profits, etc).

As of 1 July 1997, all enterprises with foreign investment are taxed on their profits at a par with other Ukrainian domestic enterprises. However, certain residual benefits remain, including state guarantees for foreign investments. In addition, current Ukrainian legislation provides for the establishment of free economic zones. The legal status of foreign investments into such zones is regulated by separate legislation on free economic zones, under which foreign investors may be granted additional privileges and benefits.

Pursuant to the applicable Ukrainian legislation, certain types of business activity may be pursued only by state-owned enterprises (e.g. production of ammunition, banknotes, blank forms of securities in certificated form etc).

The second category relates to certain restrictions applicable only to foreign investors. Principally, such restrictions represent legally established thresholds of the maximum permissible percentage of foreign investments in the charter funds of Ukrainian enterprises doing business in certain industries. Currently restrictions apply to broadcasting (radio and TV), and publishing. Certain indirect limitations apply to banking and auditing activities. In addition, foreign citizens and legal entities are prohibited from owning agricultural land in Ukraine, and are authorized to own only land designated for non-agricultural use.

Words you may need:

are entitled – охоплені

аppropriate – відповідні

ban to nationalize – заборона націоналізувати

to confiscate – конфісковувати

reimbursement – компенсація, відшкодування

residual – остаточний

restrictions applicable to – обмеження прийнятні до …

thresholds – перешкоди

maximum permissible percentage – максимально допустимий відсоток

up-to-date – сучасний

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