. /.RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/UKR/69/Add.2
19 April 2000
(00-1594)
Working Party on the
Accession of UkraineOriginal:  English
ACCESSION OF UKRAINE
Foreign Investment Legislation in Ukraine
Addendum
The following  information concerning the fore ign investment legislation in Ukraine has been
received from the Governmental Commission on Ukraine's Accession to the WTO.
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The President of Ukraine and the Supreme Rada recently adopted several legislative measures
concerning economic issues. These measures are intended to improve the conditions of foreign
investment in Ukraine.
The Law of Ukraine “On Agreements Conc erning the Organization of Production”,  adopted
by the Supreme Rada of Ukraine on 14 September 1999, No. 1039-XIV, creates favorable conditions
for the exploration, and exploitation of mineral resources on the territory of Ukraine. The law
guarantees to the investors a stable regime for their mining activities.
The Law of Ukraine “On Amending Some Laws of Ukraine with a View to the Promotion of
Investment Activity”  No. 977 of 15 July 1999, exempts from value added tax capital contributions in
kind (excluding goods subject to excise tax) to the statutory funds of the legal entities for theirproperty developments and operations. Such exempti ons apply to the import of such items to Ukraine
as well as their eventual removal from Ukrain e. The law removes conflicting interpretation of
paragraph 3.2.8 of Article 3 of the Law of Ukraine “On Value Added Tax”.
The Presidential Decree “On the Special Character of Privatization of Unfinished
Construction Objects”  No. 591 of 28 May 1999, unifies provisions in existing normative and
legislative acts on privatization of unfinished construction objects, and provides incentives for
investment in construction. The decree envisages the creation of a data base for unfinished
construction objects which are suitable for privatization, and reduces the tax liability of buyers
participating in the purchase of unfinished construction objects and who make investments in theconstruction of privatized objects, including exemption of buyers from tax applicable to land occupied
by a privatized object prior to the completion of construction.
Decree of the President of Ukraine “On the Ma in Directions of Investment Policy for 1999-
2000”  determines strategic objectives of investment policy which include incentives for foreign
investors in long-term investment projects.
Special Presidential decrees came into effect to establish special (free) economic zones and on
special investment regimes on the territories of priority development in the separate Ukrainian
regions.WT/ACC/UKR/69/Add.2
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The following special economic zones are created:
- “Interport-Kovel” (Decree No. 702/99 of 22 June 1999);
- “Mykolaiv” (Decree No. 758/99 of 28 June 1999);- “Porto-Franko” on the territory of Odessa  Trading Sea Port (Decree No. 760/99 of
28 June 1999);
- “Port Krym” in the Autonomous Republic of the Crimea (Decree No. 740/99 of
27 June 1999).
Subjects of entrepreneurial activity, registered as subjects in a certain zone, receive tax
incentives, privileges on duty payments, exemptions from currency regulations, etc., depending on thespecial provisions applicable to each zone.
Special investment regimes  for the implementation of investment projects in priority
economic areas has been introduced on the territories of priority development in several regions:
- Chernigiv Oblast (Decree No. 729/99 of 27 June 1999);
- Volyn’ Oblast (Decree No. 730/99 of 27 June 1999);
- Zhytomyr Oblast (Decree No. 732/99 of 27 June 1999);
- Autonomous Republic of the Crimea (Decree No. 740/99 of 27 June 1999);
- Kharkiv (Decree No. 731/99 of 27 June 1999).
The incentives include tax, customs and other privileges for the subjects of entrepreneurial
activity who conclude agreements with the local government agencies concerning implementation of
the investment projects in the respective priority sectors.
The Law of Ukraine No. 991 16 July 1999 “On Special Investment and Innovation Activity
Regime for “Semiconductor Technologies and Materials, Optical Electronics and Touch-Control
Technologies”, “The Institute of Electric Welding Named after Paton” and “The Institute of
Monocrystal” Technology Parks”  defines legal and economic bases for the establishment and creation
of special investment regimes and innovation activities in the technological parks of the cities of Kiev
and Kharkiv.
Data bases for investment objects in the sectors of economy and regions were developed by
many ministries and agencies of Ukraine in order to facilitate searches for suitable objects of
investment.
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