The Government has approved a new Procedure for providing state incentives for the creation and operation of industrial parks. It provides for the provision of funds for the construction of engineering and transport infrastructure facilities necessary for the creation and operation of industrial parks, as well as compensation for joining engineering and transport networks. The relevant decision was adopted at the meeting of the Cabinet of Ministers of Ukraine on June 4, 2024.
“This is an important step for the development of the economy. Industrial parks should become a catalyst for attracting investment in the real sector and increasing production, and the new incentive procedure will contribute to their effective functioning. The Government has also created a number of safeguards that will ensure responsible and efficient use of public funds. This year, the state budget provides for 1 billion hryvnias for state stimulation of industrial parks,” First Deputy Prime Minister of Ukraine - Minister of Economy of Ukraine Yuliia Svyrydenko emphasized.
The procedure for providing state incentives provides for the provision of funds to initiators of the creation or management companies of industrial parks for the arrangement or construction of engineering and transport infrastructure, as well as partial reimbursement of the cost of connecting to electrical networks.
The maximum amount of incentives is UAH 150 million, while the co-financing of the works will take place in a ratio of 50 to 50. Initiators of the creation or management companies of industrial parks from the de-occupied territories will be able to implement projects with co-financing of 80 to 20, that is, the state will pay up to 80% of the estimated cost of the works, but no more than UAH 150 million.
The new Procedure also provides for the introduction of certain safeguards. Each applicant undertakes to build at least 5,000 square meters on the territory of the industrial park within 3 years and to attract at least 2 participants. If the conditions are not met, the applicant must return all spent budget funds to the state.
In order to use the programme, you must:
- Submit an application to the authorized bank by August 15;
- The bank will check the application;
- The Ministry of Economy of Ukraine will check the documents and make a decision on providing assistance;
- In the case of a positive decision, a contract shall be concluded;
- Funds will be transferred to a special account and payment will be made after the work has been completed and the applicant has paid his share.
For investors, industrial parks solve several urgent problems at once: the issue of land, connection to networks, the availability of an industrial building, and reducing the cost of equipment.
After all, this is an opportunity for park residents:
- not to pay import duty and VAT on equipment;
- not to pay income tax for 10 years, subject to reinvestment;
- to receive a preferential rate of real estate tax and a preferential fee for land (at the discretion of the local self-government).
“The development of industrial parks is an important component of the Made in Ukraine policy for attracting investments in the real sector. After all, 1 dollar of public investment in industrial parks helps attract 6 dollars of private investment. We will be able to reach the level of standards of the Organization for Economic Cooperation and Development for Developed Countries, where the share of the processing industry is about 20% of GDP, only by developing the processing industry. The adoption of this decision is the result of many months of work by the Ministry of Economy together with the expert environment, the relevant committee of the Verkhovna Rada of Ukraine and, of course, colleagues from other central executive authorities,” Yuliia Svyrydenko concluded.