ABOUT FOREIGN INVESTMENTS

What kinds of investments can be invested in Ukraine?

All kinds of values invested by the foreign investors into objects of enterprise activity and other kinds of activities for obtaining profit (income) or achieving social effect are considered to be foreign investments in Ukraine.

Values which can be used for making foreign investments include currency, in particular the currency used on the territory of Ukraine, movable and real property, securities, rights of intellectual property, rights to carry out economic activity, paid services, and other values.

Into what objects can values be invested?

Above-mentioned values can be invested into joint ventures with membership of Ukrainian businessmen, private enterprises, movable or real property, securities, rights for lend-tenure and concessions for exploitation of natural resources, and other property right.

If the foreign investments are no less 20 percent of the authorized fund of the enterprise and reach the specified amount the size of which is differentiated according to kinds of investment, the enterprise gets the status of the enterprise with foreign investments.

In what currency can an investment be made?

Assessment of foreign investments including payments to the authorized fund of enterprises with foreign investments is made, according to a desire of a foreign investor, in the foreign hard currency or in the national currency of Ukraine.

What is the legal basis for activities of foreign investors?

Relations associated with foreign investments in Ukraine are regulated by a number of Ukrainian laws, Decrees of the Cabinet of Ministers, and other legal Acts of the State.

Adoption of these Decrees by the Supreme Rada forms the legal basis for activities of foreign investors on the territory of Ukraine and proves protection of their interests, gives the amount of authority no less than that of state enterprises. It must contribute to the primary investment in the priority industries and territories.

If other rules are established in the international treaties with participation of Ukraine, which are different from the rules stipulated in existing laws of Ukraine, then the rules of the international treaties will be applied.

By whom are the directions of the national policy in the field of foreign investments worked out?

Directions of the national policy in the field of foreign investments and the state programs for attracting foreign investments are worked out by the Cabinet of Ministers of Ukraine together with the National Bank of Ukraine and are adopted by the Supreme Rada of Ukraine.

How are foreign investments protected by state?

Laws of Ukraine include a number of measures of protecting of foreign investments. First of all, the investors are guaranteed stability of laws on protection of the foreign investments. If the future

modify protection rules, on request of a foreign investor, there must be applied the laws which were used at the time of registration of the investment.

Foreign investments are not subject to nationalization and requisition losses, including lost profit and moral injury as the result of actions or inactions of the state organs of Ukraine and its officials, and also as the result of inadequate fulfillment of their duties, must be compensated. The compensation is to be quick, adequate, effective and must be determined at the moment of actual realization of a decision as to compensation of losses in the currency in which investments had been made or in any other currency acceptable for the investor. Compensation of losses is made at expense of the state budget of other sources in accordance with the order established by the Ukrainian Government.

In case of cessation of the investment activities the investor is guaranteed the return of his investment no later than in 6 months, as well as the return of revenues obtained from these investments.

An investor has the right to transfer abroad the revenues, incomes, and other earnings in foreign \currency received as the result of his business activity or to invest these earnings in Ukraine.

The Government and the National Bank of Ukraine guarantee the credits given by foreign banks, financial and other international organizations to the subject of the foreign economic activities according to the interstate and inter government agreements. The guarantee payments are provided at the expense of State Currency Fund of Ukraine and other state property.

How are foreign investments registered by state?

Foreign investments are subject to registration in the Ministry of Finance according to its regulations of the registration of foreign investments in Ukraine. For registration an investor submits an application and information (in two copies) as to the general size, form, term of realization, object of investments, juridical name (company) and procedure for sharing of revenues and losses, information on citizenship of founders and other data.

The charter and other documents are registered in the local bodies at the place of location of the enterprise. The state registration is carried out no later than 15 days after the day of submission of the application and other documents. After registration, the enterprise with foreign investments is granted the right of a legal person.

Refusal in registration of the enterprise with foreign investments is possible only in case of violating the legal procedure of establishing the enterprise and in case if inadequacy of the registered documents with regard to the laws. Other reasons for refusal in the state registration are illegal.

If the refusal in registration is groundless or if was not done in due time, the investor may apply to court and obtain compensation for losses caused by these factors.

In case of modifications of the main points of the statutory documents or kind of enterprise it is subject to re-registration.

Cessation of activity of the enterprise with foreign investments is carried out in accordance with a procedure based on existing laws and only after the decision of owners, after expiration of the term of an agreement on establishing the enterprise, and after the court decision.

The enterprise with foreign investments can create subsidiary enterprises enjoying the rights of a legal person, as well as branches and offices on the territory of Ukraine and abroad, under the conditions of complying with the requirements specified by the laws of Ukraine and the legislature of the corresponding foreign countries.

What type of activities may an enterprise with foreign investments carry out?

The enterprise with foreign investments may carry out an activity specified in the statutory documents with exception of those forbidden by the laws of Ukraine. In accordance with the law of

Ukraine “on enterprise activity”, production and sale drugs, arms, explosives, fabrication of securities and banknotes are prohibited.

The following kinds of activities can be performed on the basis of special permission (license):

- search (prospecting) and exploitation of mineral resources;

- repair of sports, hunting or other kinds of arms;

- to quotas and licensing, as well as regulations for allocating quotas and granting licenses for export products. Granting quotas for export is approved by the Cabinet of Ministers of Ukraine, while their realization and licensing by the ministry of Foreign Economic Relations Ukraine. Products (works, services) within the quota limits are exempted from duties. Export of products exceeding the granted quotas is carried out on condition of payment of duty. This order is not valid for export of products having special export regime through the authorized agents.

How are the rates of export duties determined?

Rates of export duties are determined for separate groups of products depending on the kind of product.

Customs taxing of products imported into Ukraine is made according to the Unified Customs Tariff of Ukraine.

All objects subjected to customs control are classified in the Unified Customs Tariff of Ukraine, which contains 21 sections and 97 chapters, 1241 commodity items and 5019 commodity subitems, names and number codes of which are unified in accordance with the Harmonized System.

The United Customs Tariff of Ukraine has three kinds of rates according to the size of import duty:

Preference rates are used for goods and other articles imported from the countries which together with Ukraine form special zones: rates are also applied for goods and other articles imported form developing countries (145 countries).

How are rates of import duties determined?

Import customs duties are not charged at transporting of goods across the border for operations in accordance with sate contracts and state order; in case of importing children’s goods the rates of duty are reduced by 50 percent.

There are some peculiarities for regulation import and export operations of the enterprises with foreign investments. They have the right to export production, works and services of their own make without any license and quotas. Confirmation of goods, works and services belonging to the enterprise’s own production is made on the basis of the Confirmation Certificate of enterprise’s own productions, issued by the Ukrainian Chamber of Commerce and Industry. Property imported into Ukraine as a contribution of a foreign investor whose contribution to the authorized fund is from 10000 to 50000 US dollars during one year after the date of payment of the specified amount, the privileged conditions of taxation are used which are similar to the conditions of taxation of the enterprises with foreign investments.

The income tax is paid through non-cash transactions in the national currency of Ukraine in evaluation of profit subjected to taxation, the earnings received in foreign currency are converted into the national currency of Ukraine according to the official exchange rate on the date of receiving the income.

The object of value-added taxation is the turnovers from sale of goods (works, services) excluding their sale for hard currency.

The object of taxation of imported goods (works, services) purchased for hard currency is the difference between prices of their sale for the national currency of Ukraine and their purchase value,

converted according to the exchange rate determined by the rate on the day of submitting a declaration (purchasing of goods, completing work, rendering of services).

Export of goods (works, services) except barter (goods exchange) operations, coal, coal bricks and electric power, as well as some other goods, works and services is free from value-added tax.

Peculiarities of taxing barter operations in the field of foreign economic activity are determined by the corresponding Decree of the Cabinet of Ministers of Ukraine given in Appendix 8.

The VAT is included in the price (tariff) of goods (works, services) at the arte of 28 percent of a turnover subjected to taxation, that does not include value-added tax. The sum of tax is determined as the difference between the sum of tax obtained from the buyer for sold goods (works, services) and the sum of tax paid out by supplier for carried out works, services and purchased material resources.

Date: 2015-01-29; view: 864