Ukraine Adopts Methodology for Evaluation of Significant Investment Projects

Ukraine Adopts Methodology for Evaluation of Significant Investment Projects
3 August 2021, 15:40

Ukraine further shapes laws on promotion of significant investment projects. To implement provisions of the Law of Ukraine "On State Support for Investment Projects with Significant Investments in Ukraine" (so-called "investment nanny" law, please see below for more details), the Cabinet of Ministers of Ukraine has adopted the methodology for evaluation of investment projects. The methodology serves as a tool to assess whether the investment project may be implemented and benefit from the incentives stipulated by the "investment nanny" law.

The official text of the methodology is pending publication. According to the available draft, a potential investor submits to the Ministry of Economy of Ukraine an application along with other documents listed in the methodology (draft investment agreement, technical and economic substantiation of the investment project, documents confirming financial aspects of the project etc.). Further, the applications undergo two-stage evaluation that should not exceed 60 days, as follows:

  • at the first stage, the Ministry of Economy of Ukraine reviews submitted set of documents for completeness and compliance with legal requirements. The review lasts 10 business days, after that the Ministry forwards the documents to the relevant Ukrainian authorities for evaluation,
  • at the second stage, the relevant Ukrainian authorities (the Ministry of Finance of Ukraine, the Ministry of Ecology of Ukraine, the Antimonopoly Committee of Ukraine, local government bodies etc.) evaluate economic, financial, social, ecological, state aid aspects of the project. The evaluation stage lasts 20 calendar days, starting from the receipt of the documents from the Ministry of Economy.

At the evaluation stage the Ministry of Economy may also send additional requests to other state authorities, municipal bodies, private legal entities, and individuals, asking them to provide additional intimation that the Ministry deems required for the project evaluation. The deadline for response cannot exceed 10 business days.

Based on the evaluation results, the Ministry of Economy of Ukraine prepares the report with the conclusion whether the investment project is worth implementation or not. A potential investor may challenge this decision in a court.

Investment project approved by the Ministry of Economy of Ukraine is forwarded to the Cabinet of Ministers of Ukraine and the relevant municipal body for signing the investment agreement.

Background: the "investment nanny" law voted on 17 December 2020 provides for state support to significant (constituting more than EUR 20 million) investments, which may include tax and customs duties exemptions, granting pre-emptive right to lease and buy-out state or municipal land plots, commitment to construct infrastructure. The "investment nanny" law requires approval of supportive regulations and legislation (e.g. earlier this year Ukraine adopted laws on certain tax and customs incentives amendments). Approval of the methodology is one of the steps to implement the provisions of the "investment nanny" law.

For more information, please contact Associate Olena Yarko and Managing Partner Dmytro Vidsota.

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