New investment regulation in Ukraine

13 February 2021

Ukraine further develops laws on investments promotion offering state support to domestic and foreign investments constituting more than EUR 20 million, which may include tax and customs duties exemptions, granting lease title to land plots, commitment to construct infrastructure. A new type of investment agreement introduced by the recently adopted law shall define the investment obligations and the state support. The new law envisages stabilization provisions and option to refer disputes to international commercial or investment arbitration, where applicable.
The above is introduced on 13 February 2021 by the Law of Ukraine “On State Support for Investment Projects with Significant Investments in Ukraine” (the ‘Investment Law’).
The CMU is to approve regulations to implement certain provisions of the Investment Law; the laws introducing tax benefits are pending.

The below provides only general overview of certain aspects of the Investment Law and doesn’t constitute an advice.


To qualify for the state support any significant investment project have to comply with the following five requirements:

1. the amount of investment is in excess of EUR 20 million;

2. investment project is in one of the below industries or sectors:

3. investment project envisages construction, modernization, technical and/or technological re-equipment in the above industries and sectors, purchase of equipment and components, and may provide for construction of the adjacent infrastructure at the investor’s expense;

4. investment project generates at least 80 new jobs with the average salary being 15 percent higher than the previous year average salary for such job in the relevant region;

5. the term of making the investment does not exceed five years.

State support under the Investment Law is not granted to:


The following companies are eligible for applying for state support:

All applying legal entities should be financially able to implement the investment project (specific requirements to be approved by the Cabinet of Ministers of Ukraine (the ‘CMU’)).
However, some legal entities may not receive state support, namely:

After the applicant has been elected as the investor under the Investment Law, a special company shall be registered in Ukraine. The activity of such company should be related solely to the implementation of the investment project.


The state support may not exceed 30% of the investment amount and may be provided in the following forms:

Please note that tax and customs duty benefits shall be introduced in the Tax Code and Customs Code of Ukraine. Currently, no tax benefits under the Investment Law are effective. The respective bills are being examined by the Parliament of Ukraine (bills No. 3761 and 3762) and pending adoption
The forms and the total amount of state support should be specified in the relevant investment agreement.


A special investment agreement shall be signed between:

This agreement is the main document which imposes the procedure and conditions for the investment project, as well as total amount, types and terms of provision of the state support. Special investment agreement may be executed for the term of up to 15 years. Meanwhile, the term of implementation of the significant investment project may not exceed 5 years.

Procedure of the investment agreement signing

The law provides in total approximately 240 days for state bodies and the applicant to negotiate and approve draft investment agreement, to decide on its signing and to sign it.
The exact procedure and methodology of significant investment projects evaluation to be approved by the CMU.
Under the Investment Law, a special state body (the ‘special body’) should be authorized by the CMU to furnish support to applicants and investors while they prepare, launch and implement investment projects. Having received the draft investment agreement, the special body has 60 calendar days to review it and evaluate, ask for additional information, if necessary. Other Ukrainian state bodies (such as the Antimonopoly Committee of Ukraine, the Ministry of Finance of Ukraine, local government bodies etc.) may be involved in evaluation of the investment project.

Based on the evaluation results, the special body decides whether the investment project is worth implementation or not. The respective decision shall be sent to the applicant(s) within 5 business days, and may be challenged in court.
The special body may send its comments and proposals to the investment agreement draft. The draft amended by the applicant should be returned to the special body within 2 months from its receipt. The special body has another 30 business days to review the amended draft.
If the special body accepts the amended investment agreement draft, or if no amendments were made to the initial version, the draft shall be sent to the CMU and relevant local government body. The latter shall within 5 business days decide on signing the investment agreement and notify on such the CMU. The CMU has 30 calendar days to decide on signing.


State guarantees to significant investors the stability of business activity conditions, to the extent and in the form set forth in the Investment Law and investment agreement as of the date of the investment agreement signing.
Amongst others, the state guarantees stability of law, which means that rights and obligations of the significant investor shall be governed by Ukrainian law in force as of the date of the investment agreement signing. However, this rule shall not affect legislation benefiting the investor, i.e. in case of reduction or abolition of taxes, relief of state control of business, mitigation of investors liability, etc. In such case such benefiting legislation shall apply to significant investors.

Governing Law and Disputes Resolution

Generally, parties to the investment agreement are entitled to choose the law governing the agreement.
Parties to the investment agreement may also choose the mechanism of disputes resolution, namely: Ukrainian court, mediation, non-binding expert opinion or national or international commercial or investment arbitration (including those located abroad), which is only available to enterprises with foreign investments as defined in Law of Ukraine “On the Regime of Foreign Investments”, and the rules for disputes resolutions, unless otherwise stipulated by Ukrainian law.