Ukraine Parliament Passes New Special Investment Law

The Law “On state support of investment projects with significant investments” (Bill No 3760) was on December 17, 2020 adopted by the Verkhovna Rada of Ukraine (Parliament / Supreme Council of Ukraine)

The law defines the organizational, legal and financial principles of state support for significant investment projects within certain sectors, where among other areas waste management is included. These investment projects can be qualified for government support in order to attract these to Ukraine, create new jobs, stimulate economic development of regions and increase the competitiveness of Ukraine’s economy.

The law distinguishes a new type of investor – an investor with significant investments and an investment project with significant investments, provides a number of benefits for such investors, in particular the support in the development processes and exemption of from paying certain taxes. It also defines the forms (tools) of state support for investment projects with significant investments.

The law enshrines the status of a state institution, which includes investment managers and is authorized by the Cabinet of Ministers to accompany investors in the process of preparation and implementation of investment projects with significant investments.

There will be implemented a special investment agreement – this is an agreement concluded between the Cabinet of Ministers, an investor making significant investments, an applicant and a local government body (if they are provided with government support).

An investment project, for the implementation of which state support may be provided in accordance with the Law, must meet the following requirements:

  • the project is implemented on the territory of Ukraine
    • in the fields of certain sectors, whereof Waste Management is one.
  • creation of 80 new jobs with an average salary of employees, the amount of which is not less than 15% higher than the average salary in the relevant area in the region where the project is implemented, for the previous calendar year.
  • the amount of investment in investment objects during the implementation of the investment project with significant investments exceeds the amount equivalent to 20 million euros.
  • the term of realization of the investment project with significant investments does not exceed 5 (five) years.

The law stipulates that state support for qualified and approved investment projects may be provided to an investor with significant investments in the following forms:

  • The state guarantees the fulfillment of its obligations to provide an investor with significant investments of state support in the forms and amounts specified in this bill and a special investment agreement.
  • Ensuring the preemptive right to use (lease) a land plot of state or communal property for the implementation of such project – with payment for land on terms determined by obligations under a special investment agreement, and with the preemptive right to acquire ownership by an investor of such land after the expiration of the special investment agreement (except in cases of early termination).
  • Provision at the expense of state, local budgets and other sources not prohibited by law, construction, reconstruction, restoration, overhaul of related infrastructure (roads, communication lines, heat, gas, water and electricity, utilities, etc.) required for the implementation of an investment project with significant investment.
  • The total amount of state support for such investment project should not exceed 30 percent of the planned amount of investment under the project and is set in a special investment agreement.
  • Exemption from income tax for 5 years, from VAT and duties on the import of new equipment.
  • The law provides for the introduction of the institution of a special investment agreement to be concluded between the investor and the Government of Ukraine; the procedure for preparing applications and deciding on the expediency or inexpediency of concluding such special investment agreement is regulated.
  • Guarantees of the rights of investors who implement investment projects with significant investments are determined.
  • The state guarantees the stability of business conditions during the implementation of investment projects with significant investments carried out on the basis of special investment agreements, observance of the rights and legitimate interests of applicants and investors with such investments.

Cindrigo Chairman Jörgen Andersson comments, “This new law is very good news, we see Cindrigo projects for Waste to Energy plants qualifying, and expect by this being able to speed up the development both by the access to land, simplified processes and of course financially”

For more information in English, link to Interfax;
https://en.interfax.com.ua/news/investments/710533.html
For more information in Ukrainian, website Verkhovna Rada (Ukraine Parliament);
https://iportal.rada.gov.ua/news/Novyny/201090.html