ULA - Ukrainian Logistics Alliance

Why Ukraine?

Ukraine is a dynamic European country that is improving its business climate to compete globally, creating new business opportunities. Ukraine is a new technological center of the world, the breadbasket of Europe with the most fertile lands and huge tourist and investment potential. The main activity of the country's leadership is sustainable economic growth through the development and implementation of a package of fundamental reforms.

Ukraine has a large number of investment sectors: land, energy, mining, engineering, shipbuilding, infrastructure, tourism and, of course, logistics. And all this is in the geographical center of Europe. Ukraine aims to create equal conditions for all, implement changes that are vital for Ukraine and digitalize all public services, thus making them transparent, easy to use and effective. The first results are already tangible, in particular the creation of the Dia portal, which allows you to quickly register a business, obtain a permit, etc. The first virtual extraterritorial free economic zone Dia City is also starting.

Ukraine continues to actively develop economic and trade relations with foreign partners, establishes contacts with business communities of different countries for cooperation and implementation of joint infrastructure projects. Ukraine has already been recognized by international investors as a stable and predictable market for emerging investment, with talented human capital and high-quality undervalued assets. In 2020, Ukraine rose seven more places in the World Bank's Ease of Doing Business ranking to 64th out of 190 countries. Ukraine will continue to do everything possible to encourage those who are already successful in Ukraine to invest more and make every effort to become even more attractive and hospitable to future investors!
Area of the territory of Ukraine
The largest country in terms of area, whose territory lies in Europe. The area of Ukraine is 603,500 sq. Km.
It borders on
The Republic of Belarus in the north, Poland, Slovakia and Hungary in the west, Romania and the Republic of Moldova in the southwest, and the Russian Federation in the east and northeast. In the south and southeast it is washed by the Black and Azov Seas.
The population of Ukraine
The population of Ukraine is 41 million 703 thousand 300 people (as of 1.10.2020, according to the State Statistics Service).
Logistics
Ukraine's geographical location, combined with 17 free trade agreements with 47 countries (including the DCFTA with the EU), allows Ukraine to be an important transit corridor for trade and travel between Europe, Asia and the Middle East.
The length of state roads in Ukraine is 170 thousand km. The network of main routes is spread throughout the country and connects all major cities of Ukraine, as well as provides cross-border routes with neighboring countries.

Ukraine has a developed railway transport infrastructure. Rail transport in Ukraine plays an important role, connecting all major cities, port facilities and industrial centers with neighboring countries. The total length of railways in Ukraine is over 22 thousand km.

Ukraine has favorable conditions for the development of maritime transport in the south, its territory is washed by the waters of the Black and Azov Seas, which are virtually freezing and connected to the Mediterranean Sea through the Bosphorus, the Sea of ​​Marmara and the Dardanelles. The total length of the sea coastline of Ukraine is over 2000 km. Today, the port system of Ukraine has 18 seaports, 13 of which are located on the continental territory of Ukraine. The total capacity of the mainland ports and terminals is 313.3 million tons. International sea voyages are carried out mainly through the port of Odessa, from where ferries regularly sail to Istanbul, Varna and Haifa.

The market of passenger air transportation in Ukraine from year to year shows positive dynamics. Domestic and foreign airlines serve 19 Ukrainian airports and airfields. About 98 percent of passenger traffic is concentrated in 7 major airports (Boryspil, Kyiv (Zhulyany), Odessa, Lviv, Kharkiv, Zaporizhia and Dnipro). According to the results of work in 2019, the passenger flow of air passengers amounted to 24.3 million people. Four domestic airlines, including Ukraine International Airlines, Motor Sich, Wind Rose and Skype, operate regular domestic passenger services between 11 cities of Ukraine.
State investment support
Ukrainian legislation provides not only state guarantees for investment protection, but also various instruments to stimulate investment activity. At the national level, these are exemptions from value added tax and income tax (the list is defined in the Tax Code of Ukraine) and exemptions from import duties (the list is defined in the Customs Code of Ukraine). At the local level, investors can establish benefits for the payment of real estate tax, land tax, land rent.
Law of Ukraine "On Stimulation of Investment Activity
in priority sectors of the economy in order to create new jobs. "

The law comes into force on January 1, 2013 and defines the basics of state policy in the investment sphere during 2013-2032. The law is aimed at creating conditions for the intensification of investment activities by concentrating state resources on priority areas of economic development in order to introduce new and energy-saving technologies, create new jobs, regional development.

To implement the incentive mechanism defined by this Law, the Cabinet of Ministers of Ukraine adopted a resolution dated 14.08.2013 № 715 "On approval of the Procedure for selection, approval and registration of investment projects in priority sectors of the economy and requirements for such projects" and orders dated 14.08.2013 № 843 -r "On approval of the list of priority sectors of the economy".

In accordance with the Procedure for selection, approval and registration of investment projects in priority sectors of the economy, approved by the Cabinet of Ministers of Ukraine dated 14.08.2013 №715, the Ministry of Economic Development approved orders:

- dated 12.12.2013 № 1475 “On approval of the application form for participation in the selection of investment projects in priority sectors of the economy and instructions for its completion” (registered with the Ministry of Justice on 27.12.2013 under № 2221/24753);
- dated 12.12.2013 № 1474 “On approval of the registration card form of an investment project in a priority sector of the economy” (registered with the Ministry of Justice on 27.12.2013 under № 2220/24752).

The development of the economy of modern Ukraine necessitates increasing its efficiency, in particular by attracting private domestic and foreign investment.

In accordance with paragraph 44 of subsection 4 of section XX of the Tax Code of Ukraine for the period up to December 31, 2021 introduced a zero rate of corporate income tax for taxpayers whose annual income does not exceed 3 million hryvnias, the amount accrued for each month of wages ) employees are not less than two minimum wages and provided that they meet the following criteria:
a) formed in the manner prescribed by law after January 1, 2017;

b) current ones, in which during three consecutive previous years (or during all previous periods, if less than three years have passed since their formation) the annual amount of income is declared in the amount not exceeding three million hryvnias, and in which the average number of employees during this period ranged from five to 20 people;

c) which were registered by single tax payers in the manner prescribed by law in the period up to January 1, 2017 and in which for the last calendar year the amount of revenue from sales of products (goods, works, services) amounted to three million hryvnias and the average number of employees up to 50 people.
In order to improve the investment climate of Ukraine in certain areas selected as a result of a comprehensive assessment of compliance with Ukrainian legislation and best world practices described by the World Bank Group in the methodology of Doing Business rating, September 20, 2019 adopted Law of Ukraine № 132 - IX " on stimulating investment activity in Ukraine ". The main provisions of the Law provide:
1. In the field of protection of shareholders' rights:
- liability of persons with interest and officials of the joint-stock company for damages caused by the transaction with interest, concluded on non-market terms, the consent to which was given by the majority shareholder or persons appointed by him;
- inclusion of the issue of election of an independent auditor of a public joint-stock company in the exclusive competence of the general meeting of shareholders;
- extension of the rule on mandatory redemption offer to shareholders who purchase 50% of the company's shares;
- expanding the list of transactions that are considered transactions with interest;
2. In the field of justice:
- ensuring the possibility of requiring a group of the same type of evidence by the commercial court (without specifying the individual characteristics of each required document);
- introduction of the standard of proving "greater probability" in business cases;
In the field of ensuring the fulfillment of contractual obligations:
- the obligation can be secured by transferring to the creditor in trust the property - the object of security;
- the creditor is the owner of the property (as opposed to the pledge) and can sell the collateral on its own behalf in case of default by the debtor of its obligations;
- the object of security is not included in the liquidation estate of the debtor or creditor, and therefore the initiation of bankruptcy proceedings will not prevent the recovery of property (unlike collateral, where bankruptcy proceedings may block recovery of property for several years);
- debtors are provided with certain guarantees that reduce the risks of abuse by creditors (trustees) of their rights;
- the status of the creditor as a trustee limits the debtor's ability to remove the collateral from the encumbrance and avoid fulfillment of the obligation;
3. In the field of construction:
- the obligation to pay a share contribution to the development of the infrastructure of the settlement is abolished;
In the field of land pledge agreements:
- the obligation to conduct an expert monetary valuation of privately owned land plots, which are transferred as collateral, is abolished;
In the field of activity of limited liability companies:
- features of creation and activity of limited liability companies operating on the basis of the model charter are defined.
In order to attract significant investments to Ukraine, create new jobs, stimulate economic development of regions and increase the competitiveness of the economy, the Law of Ukraine "On State Support of Investment Projects with Significant Investments" was adopted on December 17, 2020. The law identifies a new type of investor - an investor with significant investment and an investment project with significant investment, provides a number of benefits for such investors and defines the forms (tools) of state support for investment projects with significant investment. The law establishes the status of a state institution, which includes investment managers and is authorized by the Cabinet of Ministers to accompany investors in the preparation and implementation of investment projects with significant investments.

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

a) the project is implemented on the territory of Ukraine in the fields of processing industry (except for the production and circulation of tobacco products, ethyl alcohol, cognac and fruit, alcoholic beverages); extraction for further processing and / or enrichment of minerals (except coal and lignite, crude petroleum and natural gas); waste management; transport, warehousing, postal and courier activities, logistics; education, science and scientific and technical activities; health care, art, culture, sports, tourism and resort and recreational sphere;

b) 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;

c) the amount of investment in investment objects during the implementation of the investment project with significant investment exceeds the amount equivalent to 20 million euros (this amount is calculated at the official exchange rate set by the National Bank of Ukraine on the date of actual investment);

d) the term of implementation of the investment project with significant investments does not exceed 5 (five) years.

The law stipulates that state support for investment projects with significant investments may be provided to investors with significant investments in the following forms:

a) exemption from income tax for 5 years, from VAT and duties on imports of new equipment;

b) ensuring the preemptive right of land use of state or communal property for the implementation of an investment project with significant investment - providing land or state or communal property for use (lease) for the implementation of an investment project with significant investment with payment for land on terms determined obligations under a special investment agreement, and with the preemptive right to acquire ownership by an investor with significant investments of such land after the expiration of the special investment agreement (except in cases of early termination), if such a right under a special investment agreement;

c) provision at the expense of state, local budgets and other sources not prohibited by law, construction, reconstruction, restoration, overhaul of related infrastructure (highways, communication lines, heat, gas, water and water) electricity supply, utilities, etc.) required for the implementation of an investment project with significant investment.

The total amount of state support for an investment project with significant investments should not exceed 30 percent of the planned amount of investment under the project and is set in a special investment agreement.

The law provides for the introduction of a special investment agreement to be concluded between the investor and the Government of Ukraine in the framework of an investment project with significant investments; the procedure for preparing applications and deciding on the expediency or inexpediency of concluding a special investment agreement is regulated; guarantees of the rights of investors who implement investment projects with significant investments are determined.

Ukraine in the world rankings

64th place in the World Bank's Doing Business Ranking 2020 (out of 190 countries) on the Ease of Doing Business Index.


Ukraine showed growth on 5 indicators:

Investor protection
+ 27 positions (from 72 to 45). Strengthened the protection of minority investors by introducing a requirement for more detailed disclosure of information about transactions with stakeholders;
Obtaining building permits
+ 10 (from 30 to 20). The process of obtaining building permits has been simplified by eliminating the requirement to hire an external observer and introducing an online notification system. It is also cheaper to get a building permit by reducing the contribution to the Kyiv City Council;
Connection to power grids
+ 7 (from 135 to 128). The process of obtaining electricity has been simplified by optimizing the production of technical conditions and the introduction of a system of geographical information. The reliability of energy supply has also been increased by introducing a disconnection compensation mechanism;
International trade
+ 4 (from 78 to 74). Reduced import time by simplifying conformity certification requirements for auto parts;
Property registration
+ 2 (from 63 to 61). Registration of property has been simplified by increasing the transparency of the land management system.
76 overall place in the ranking of "The Good Country Index" in 2020 (from 153 countries), including:
Mate
And a place in the category of "contribution to the development of science and technology."

78th place according to the Travel & Tourism Competitiveness Index (TTCI), ranked by the World Economic Forum (out of 140 countries), due to economic stabilization in terms of:

- "price competitiveness" (19th place);
- "openness to the world" (55th place);
- "improvement of general infrastructure" (73rd place);
- "Improving the business environment" (103rd place);

- "increasing the level of security" (107th place).

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2019 Ukrainian Logistics Alliance