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Ukraine SEZS Offer Investment Advantages
by Yuriy Prykhodko
(Yuriy Prykhodko is a commercial specialist with the US. Commercial Service of the American Embassy in Kyiv)
In the last year, Ukraine has been actively setting up special (free) economic zones (SEZS) in areas of the country with the greatest industrial or other potential, as well as the greatest economic need. The zones provide investors with favorable tax, customs, and economic treatment and each has its own set of specific privileges and conditions for investors, depending on the features of the region. Currently, eight zones have been created: Syvash in northern Crimea, Azov in Donetsk Oblast, Donetsk in eastern Ukraine, Zakarpattya in western Ukraine, Slavutych in Cheenihiv Oblast, Truskavets in Lviv Oblast, and Yavoriv rayon in Lviv Oblast. The decree for the latest zone, the Interport Kovel Free Economic Zone, to start operation on January 1, 2000, was signed on June 23, 1999.
The law on the Yavoriv special economic area (YSEA) was signed in mid-January 1999 and established the zone for 20 years. The rayon (district) administration acts as the managing and regulatory authority for the YSEA, approving and registering all investment projects worth at least $500,000.
The YSEA legislation stipulates the following privileges for investors and project implementers:
- A 5-year corporate profit tax exemption for investment projects.
- Imported equipment, spare parts, and other non-excise items required for implementation of investment projects are exempt from import duties for up to 5 years and from value-added tax (VAT);
- The import of goods for use within the territory of the YSEA, as well as the export of goods completely or partially manufactured/processed within the territory of the YSEA, are not subject to licensing and quotas;
- Owners and users of land within the territory of the YSEA are exempt from land tax during the first 3 years of implementation of a project.
In addition, the government of Ukraine guarantees full compensation of losses in case of the liquidation of the YSEA. These stipulations and privileges are similar to those for the other zones.
A concise description of 14 priority investment projects for the area as determined by the Yavoriv district administration can be found on BISNIS Online at www.bisnis.doc.gov/bisnis/country/9906yav.htm. The listed projects offer opportunities in the areas of electric power generation, production of agricultural chemicals, construction and operation of an oil enterprise, construction of a petroleum extraction and processing enterprise, production of concrete and building lime, poultry processing, construction and operation of a milk processing plant, construction and operation of a donor plasma processing plant, reconstruction and operation of a textile factory, production of PET plastic bottles at an existing plastics factory, construction and operation of a customs post and service plaza, and the construction of a toll road.
Locations of free economic zones in Ukraine.
For more detailed information on the YSEA, interested parties are encouraged to contact:
Mr. Stepan Lukashyk
Head, Yavoria Regional Administration
8 Ivana Franko St. Yavoria
Lvivska Oblast, Ukraine 292160
Tel: +380 (322) 798-246
Tel/Fax: +380 (3259) 213-69, 210-90
Ms. Zoryslava Romoska
Member of Parliament (represents Tavoriv)
Verkhovna Rada of Ukraine
2 Shovkovychna St., Office 417
Tel: +380 (44) 291-7372, 291-7097
Fax: +380 (44) 293-0427
Dr. Ihor Yukhnovskiy
Member of Parliament
Verkhovna Rada of Ukraine
3 Sadova St., Office 319
Tel: +380 (44) 293-3361, 226-2900
Fax: +380 (44) 293-0414, 226-2420
Ms. Kristina Marlow
U.S. Embassy Kyiv, Economic Officer
Tel: +380 (44) 246-9750
Fax: +380 (44) 244-7350
Mr. Yuriy Prykhodko
U.S. Commercial Service, Kyiv
Tel: +380 (44) 417-2669
Fax: +380 (44) 417-1419
Email:
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