On June 4, 2024, the Government of Ukraine has approved a new procedure for state stimulation of the creation and operation of industrial parks.
The new procedure introduces several key provisions which concern the provision of funds for the construction of engineering and transport infrastructure facilities necessary for the creation and operation of industrial parks as well as compensation for connecting to engineering and transport networks.
Highlights of the New Procedure for 2024
- A state budget of 1 billion hryvnias (UAH) has been allocated for these incentives this year.
- The maximum amount of incentives is 150 million hryvnias, with a co-financing ratio of 50:50. For industrial parks in de-occupied territories, the state covers up to 80% of the project cost, capped at 150 million hryvnias.
- Applicants are required to build at least 5,000 m² within the industrial park and attract at least two participants within three years. Failure to meet these conditions will result in the return of all spent budget funds to the state.
Application Process:
- the application must be submitted to an authorized bankby August 15;
- the bank will review the application;
- the Ministry of Economy will verify documents and make a decision;
- if approved, a contract will be concluded;
- the transsfer of funds to a special account with payment made after work completion and the applicant's contribution.
Benefits for Investors and Residents:
For Investors:
- addresses urgent issues such as land acquisition, network connections, availability of industrial buildings, and reducing equipment costs.
For Industrial Park Residents:
- Exemption from import duty and VAT on equipment.
- Income tax exemption for 10 years, subject to reinvestment.
- Preferential rates for real estate tax and land fees (subject to local government discretion).
In conclusion, development of industrial parks is stimulating long-term investment, attracting foreign investors and offers environmental benefits like water conservation, reduced air emissions, and recycling. This initiative promises to enhance industrial growth and profitability in Ukraine.
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