State Support for Significant Investments in Ukraine
Foreign companies can use Ukraine’s state support programme if the project meets the statutory criteria and the significant investment volume exceeds the equivalent of EUR 12 million, excluding VAT. For a foreign applicant, the project is implemented through a specially established Ukrainian legal entity acting as the investor with significant investments. Support may include tax and customs relief, land support and infrastructure support, subject to an overall cap of 30 per cent of the planned significant investment volume.
Law of Ukraine “On State Support for Investment Projects with Significant Investments in Ukraine” No. 1116-IX sets the requirements for the project, applicant and investor, the forms of state support and the procedure for concluding a Special Investment Agreement (SIA).
This article is intended for foreign companies, investment groups, CFOs and legal teams planning a capital-intensive project in Ukraine and assessing whether the special state support regime may apply.
1. Legal framework and current status of the programme
2. Project requirements and eligible sectors
3. Applicant and investor with significant investments
4. Investment amount and pre-investment
5. Employment requirements
6. Forms of state support and the overall cap
7. Corporate income tax, VAT and customs duty exemptions
8. Land and infrastructure support
9. Special Investment Agreement and stability guarantee
10. Application and project evaluation procedure
11. Checklist for foreign investors
Frequently asked questions
How DLF can help
1. Legal framework and current status of the programme
Law of Ukraine “On State Support for Investment Projects with Significant Investments in Ukraine” No. 1116-IX is the basis of the programme. Cabinet of Ministers regulations govern the project-evaluation procedure and timing, while tax and customs relief is governed by the transitional provisions of the Tax Code and Customs Code of Ukraine.
According to the Ministry of Economy’s 2026 follow-up monitoring report, the Ministry received eight applications for evaluation; five positive and two negative project conclusions were issued, five SIAs were concluded, and one investment project was implemented.
2. Project requirements and eligible sectors
A project qualifies as a significant-investment project if the declared significant investment volume exceeds the equivalent of EUR 12 million, excluding VAT. The equivalent is calculated at the official NBU exchange rate on the first working day of the calendar quarter in which the application is submitted. The project implementation period may not exceed five years from SIA signing.
The Law provides for eleven eligible activities:
1. Manufacturing
2. Mineral extraction for subsequent processing and/or enrichment
3. Biogas and/or biomethane production
4. Waste management
5. Transport, warehousing, logistics, postal and courier activities
6. Education
7. Scientific and scientific-technical activities
8. Healthcare
9. Tourism, resort and recreational activities
10. Arts, culture and sports
11. Electronic communications
Note on mineral extraction. Only projects involving subsequent processing and/or enrichment of the extracted minerals are eligible; raw extraction without such processing or enrichment is not sufficient. The corporate income tax exemption is also unavailable for this sector (see Section 7).
Exclusions. Within manufacturing, the programme does not cover activities involving the production and circulation of tobacco products, ethyl alcohol (except the production of bioethanol intended for use as a fuel component), cognac and fruit spirits, or alcoholic beverages. In mineral extraction, hard coal, brown coal (lignite), crude oil and natural gas are excluded.
3. Applicant and investor with significant investments
An applicant may be one legal entity registered in Ukraine or abroad, or several such legal entities filing jointly. The investor with significant investments is a Ukrainian-registered legal entity specially established to implement the project; it is a party to the SIA and conducts business exclusively for the purpose of implementing the project and performing the SIA.
For a foreign applicant, this means establishing a Ukrainian project company as the investor. Where the applicant and the investor are separate legal entities, the applicant or applicants together must own 100 per cent of the shares/interests in the investor’s share capital.
Two separate legal entities are not mandatory in every case. A Ukrainian applicant specially established to implement the specific project and meeting the statutory requirements may itself become the investor with significant investments.
The requirements and restrictions established by the Law for the applicant also apply to the investor. Before filing, the parties should check, in particular, restrictions relating to state or municipal participation, sanctions, bankruptcy or liquidation, ownership structure and ultimate beneficial owners.
Related article: Foreign Investment Screening in Ukraine
4. Investment amount and pre-investment
Threshold amount. Significant investments are the investor’s and/or applicant’s own or borrowed funds invested in investment objects. The threshold is not the same as total project cost: operating expenditure, working capital and other expenditure that does not qualify as significant investment under the Law is not counted. For actual significant investments made in foreign currency, the official NBU exchange rate on the date the relevant investment is actually made is used.
Pre-investment. Investments made by the applicant and/or investor before filing may be counted as significant investments if they were made no earlier than 18 months before the filing date and do not exceed 30 per cent of the total planned significant investment volume. Investments made earlier than this 18-month window are not included in the significant-investment calculation.
The 30 per cent limit on countable pre-investment and the 30 per cent overall cap on state support are separate rules: the first determines how much prior investment may be counted as significant investment; the second limits support under the SIA.
5. Employment requirements
The investor must create new jobs and meet the statutory wage requirements. It is sufficient to satisfy any one of the following three options:
| Option | Minimum new jobs | Required wage level |
|---|---|---|
| A | 10 | At least 50% above the actual average wage for the relevant activity in the region |
| B | 30 | At least 30% above the actual average wage for the relevant activity in the region |
| C | 50 | At least 15% above the actual average wage for the relevant activity in the region |
The calculation is based on the actual average wage for the relevant type of economic activity in the region (Oblast) where the project is implemented, for the previous calendar year. The general average wage for the Oblast and nationwide indicators are not used for this purpose.
6. Forms of state support and the overall cap
The programme provides several forms of support that may be combined within a particular SIA:
| Form of support | Main condition / period | Counts toward 30% cap |
|---|---|---|
| Corporate income tax exemption | Up to five consecutive years, subject to the Tax Code conditions | Yes |
| Import VAT exemption | For qualifying new equipment; until 1 January 2035 | Yes |
| Customs duty exemption | For qualifying new equipment; until 1 January 2035 | Yes |
| Land support | Provision of state/municipal land identified in the SIA for use (lease) without a land auction, with a preferential right for the investor to acquire ownership of such land plot after expiry of the SIA term | Yes |
| Engineering and transport infrastructure | Construction financed from the state and local budgets and from other sources not prohibited by law, or reimbursement of the cost of facilities built by the applicant/investor | Yes |
| Network connection/interconnection | Reimbursement of eligible connection costs | Yes |
| Forestry-production losses | Exemption from reimbursement where provided by law | Yes |
| Land payments | Local council may reduce land-tax/rent rates or grant a land-tax exemption; until 1 January 2035 | Yes |
Total state support under an SIA may not exceed 30 per cent of the planned significant investment volume.
Actual investment volume. If the actual significant investment volume is lower than the amount stated in the SIA, the amount of state support may be adjusted by amending the SIA. If actual significant investments fall below the statutory threshold, the investor must return all state support received. If the actual significant investment volume exceeds the amount stated in the SIA, the overall amount of state support remains unchanged.
7. Corporate income tax, VAT and customs duty exemptions
Corporate income tax. The Tax Code of Ukraine provides an exemption from corporate income tax for five consecutive years on profit earned by the investor as a result of performing the SIA. The exemption does not cover all profit of the company and does not apply to projects involving mineral extraction for subsequent processing and/or enrichment.
Start of the exemption. The investor selects the calendar quarter in which the exemption is to begin in an application filed with the tax authority. The exemption cannot start before that application is filed or before the project register records that the investor has fulfilled its obligations regarding the required significant investment volume and commenced operation of the investment objects; the investor must also continue to perform its SIA obligations. The exemption period may not exceed the SIA term, and no new exemption period may begin after 1 January 2035.
Early termination of the SIA. If the SIA is terminated early, the investor loses the right to the special corporate-income-tax regime and determines its corporate income tax liability under the general rules for the tax period in which the SIA is terminated.
Import VAT. Until 1 January 2035, imports of new equipment and components falling within the legally defined qualifying category may be exempt from VAT where imported by the investor exclusively for the SIA project. Eligibility includes, among other things, the relevant UKT ZED codes, manufacture no earlier than three years before import, no prior use, and compliance with the list and quantities approved for the SIA. Goods originating in an occupying/aggressor state or imported from such a state or from occupied Ukrainian territory are excluded.
Customs import duty. The Customs Code of Ukraine provides, until 1 January 2035, an import-duty exemption for the same category of new equipment and components imported by the investor exclusively for its own use in implementing the SIA project. Breach of designated-use rules, disposal of the equipment before five years have elapsed, or other circumstances specified by law may trigger additional payment liabilities.
Related article: Customs Clearance for Goods Imported into Ukraine
8. Land and infrastructure support
Land. State or municipal land identified in the SIA as necessary for the project may be leased to the investor for the SIA term without a land auction. The SIA may also provide a preferential right to purchase the plot after the SIA term ends, except where the agreement is terminated early.
Where a plot has already been formed and duly registered, the Law provides special deadlines for granting it: state land is to be provided within ten working days after receipt of the investor’s application; municipal land, within five working days after the relevant local-council decision. In general, the land identified in the SIA is to be transferred for use within three months after SIA signing. If the investor cannot register the land-use right within six months for reasons beyond its control, it may terminate the SIA unilaterally.
Infrastructure. Support may include construction of necessary engineering and transport infrastructure using state or local budgets and other sources permitted by law, as well as reimbursement of the cost of such facilities where they were built by the applicant or investor. Costs of connection and interconnection to engineering and transport networks may be reimbursed separately. The relevant amounts count toward the overall state-support cap.
9. Special Investment Agreement and stability guarantee
Parties and term. Ukraine, represented by the Cabinet of Ministers, is a party to the SIA. The other parties are the investor with significant investments, the applicant (except in cases provided by the Law) and a local authority where it provides support for the project. The SIA may remain in force for up to 15 years, while the project implementation period may not exceed five years from SIA signing.
Stability guarantee. The Law provides guarantees protecting the stability of the investor’s business conditions within the SIA. The precise scope of the guarantee and its exceptions are set out in Article 17 of the Law.
Change of control. Any change of control over the investor during the SIA term requires prior approval by the Cabinet of Ministers. The investor must also notify the authorised body of each such change, including disclosure of ultimate beneficial owners, within 15 calendar days after the change occurs.
Dispute resolution. The Law permits disputes to be resolved by Ukrainian courts, mediation, non-binding expert determination and national or international commercial or investment arbitration. For an enterprise with foreign investment, the SIA may provide for the seat of arbitration outside Ukraine. The specific dispute-resolution mechanism must be set out in the SIA.
10. Application and project evaluation procedure
The evaluation procedure is governed by Cabinet of Ministers Resolution No. 312. The procedure has two evaluation stages; for practical planning it can be summarised as follows:
1. Document preparation. The applicant submits to the authorised body an application that includes documents confirming the applicant’s compliance with the requirements of the Law, the draft SIA, a feasibility study (with mandatory indication of the social effect of project implementation), financial-capacity documents, ownership-structure information and other documents required by the procedure.
2. First-stage review — 10 working days. The Ministry of Economy checks the applicant, project and submitted documents for compliance with statutory requirements. For projects subject to the special 45-day evaluation period, this review takes five working days.
3. Interagency review — 20 calendar days. After a successful first-stage review, the bodies specified by the procedure and, where applicable, the relevant local authority review the materials. For projects subject to the special 45-day period, this stage takes 15 calendar days.
4. Final conclusion. Based on the evaluation, the Ministry of Economy prepares a conclusion on whether implementation of the project and conclusion of the SIA are advisable.
5. Further approvals and SIA conclusion. A positive conclusion does not automatically result in an SIA: the draft agreement must undergo the approvals required by the Law before the parties to the specific project sign it.
The overall evaluation period is no more than 60 calendar days from receipt of the application. A period of up to 45 calendar days applies to projects financed with borrowed funds from IFC, the EBRD, the EIB, other international financial institutions of which Ukraine is a member, or foreign governmental financial organisations, provided the confirmation letter required by the procedure regarding the signed loan agreement is available. These periods relate to evaluation and do not guarantee SIA signing within the same period.
11. Checklist for foreign investors
Before filing, a foreign investor should check the following points:
- Structure. Who will be the applicant; whether a Ukrainian project company has been established as the investor; and, where applicant and investor are separate, whether the applicant or applicants together own 100 per cent of its share capital.
- Threshold. Whether the planned significant investment volume excluding VAT will exceed the equivalent of EUR 12 million and the NBU exchange rates required by the Law are applied correctly.
- Sector and exclusions. Whether the project falls within an eligible activity and is not caught by an applicable exclusion.
- Participant restrictions. Whether the applicant, investor, ownership structure and ultimate beneficial owners comply with statutory requirements, including sanctions-related restrictions.
- Employment. Which of the three job-and-wage options will be met, using the actual average wage for the relevant economic activity in the region for the previous calendar year.
- Equipment. Whether imported equipment satisfies the statutory conditions for the VAT and customs-duty exemptions, including the relevant UKT ZED codes, manufacture-date and no-prior-use requirements.
- Pre-investment. Which investments made before filing may be counted within the 18-month window and 30 per cent limit.
- Land and infrastructure. What land and infrastructure support the project requires and how it should be reflected in the SIA.
- Change of control. Whether any change of control over the investor is expected during the SIA term; if so, plan for prior Cabinet approval and the 15-day notification to the authorised body.
Frequently asked questions
What is the minimum investment required to access the programme?
The significant investment volume must exceed the equivalent of EUR 12 million, excluding VAT. A project with a planned significant investment volume of exactly EUR 12 million does not qualify.
What forms of state support may be provided under an SIA?
Support may include tax and customs relief, land support, publicly financed construction of necessary engineering and transport infrastructure or reimbursement of infrastructure built by the applicant or investor, reimbursement of network connection/interconnection costs, exemption from reimbursement of forestry-production losses and land-payment relief available under the Tax Code. Total support may not exceed 30 per cent of the planned significant investment volume.
Can a foreign company directly be the investor with significant investments?
No. A foreign company may be an applicant, but the investor with significant investments is a specially established Ukrainian legal entity. Where the applicant and investor are separate, the applicant or applicants together must own 100 per cent of the investor’s share capital.
How long does the evaluation of an application take?
The overall evaluation period is no more than 60 calendar days from receipt of the application. A period of up to 45 calendar days applies to projects financed with borrowed funds from IFC, the EBRD, the EIB, other international financial institutions of which Ukraine is a member, or foreign governmental financial organisations, provided the confirmation letter required by the procedure regarding the signed loan agreement is available. These are evaluation periods and do not guarantee SIA signing within the same period.
What happens if actual investments are lower than planned?
If the actual significant investment volume is lower than the amount stated in the SIA, the amount of state support may be adjusted by amending the SIA. If the actual significant investment volume falls below the statutory threshold, the investor must return all state support received.
Can disputes under an SIA be referred to international arbitration?
An SIA may provide for international commercial or investment arbitration. For an enterprise with foreign investment, the Law allows the seat of arbitration to be outside Ukraine; the specific mechanism and arbitration clause must be set out in the SIA.
How DLF can help
DLF attorneys-at-law supports foreign companies and investors throughout the preparation and implementation of significant investment projects in Ukraine, from choosing the corporate structure and establishing the Ukrainian project company to checking programme eligibility, ownership and ultimate beneficial owner disclosures, preparing the application and feasibility study, negotiating the SIA, tax structuring, customs matters, land and infrastructure issues, and dispute resolution.
Igor Dronov, Counsel — DLF attorneys-at-law
Contact: +380 44 384 24 54, info@dlf.ua.
This material is for general information only. Application of the approaches described depends on the circumstances of the specific case and requires a separate legal assessment.