“Bila Tserkva” Industrial Park (Ukraine)
Ukraine is one of the most cost-effective and promising manufacturing platforms in Europe, combining a strategic geographical location, competitive labour costs and substantial government incentives for industrial development. The country serves as a reliable manufacturing hub and offers favourable conditions for launching industrial projects and relocating businesses.
The country’s overall economic potential is underpinned by strong human capital: Ukraine ranks among the European leaders in terms of the number of engineering graduates, producing over 130,000 technical specialists annually. At the same time, the average monthly wage in the manufacturing sector remains lower than in many global manufacturing centres, such as China, Thailand, India, Vietnam and Indonesia. Efficient logistics and access to international markets are ensured by 16 free trade agreements signed with 45 countries worldwide, including the European Union.
Ukraine is also a recognised global leader in agricultural production (particularly sunflower seeds, sunflower oil, maize, wheat, milk and cheese) and ranks among the world’s top producers of industrial goods, notably iron ore and steel.
A package of government incentives is in place for investors and residents of industrial parks in Ukraine, aimed at reducing capital expenditure: the allocation of funds from the State Fund for Regional Development; exemption from import duties on equipment and components not manufactured in Ukraine; importation at preferential import duty rates of goods originating from WTO member states or from countries with which most-favoured-nation agreements have been concluded; exemption from VAT on the import of energy-saving equipment and materials; exemption from the requirement to contribute to the development of local infrastructure; and exemption from the obligation to make contributions to the authorised capital.
In addition, investment projects aimed at creating new jobs may be eligible for state support. Depending on the type of project and the scale of funding, such support is provided in the form of co-financing from the state budget; the provision of state guarantees to support debt financing; the provision of loan financing for the investment project; and full or partial compensation for interest payments on debt financing for the investment project.
The priority sectors for investment are the agro-industrial complex (with state support in the form of partial compensation for the cost of agricultural machinery or equipment and preferential land tax rates) and the development and manufacture of equipment (with the possibility of obtaining funding through the Ministry of Economic Development’s Invention Support Fund and competitions for investment and innovation projects). All these advantages, combined with the standard tax conditions for employees (personal income tax – 18 per cent, unified social tax – 22 per cent, military levy – 1.5 per cent), make Ukraine an ideal platform for scaling up production and long-term investment.
