Publication date: 08.07.2024
Legal regulation of investment activity in Ukraine
Introduction
Investment activity is one of the key components of economic development in any country. It helps to attract capital, create new jobs, introduce modern technologies and increase the competitiveness of the national economy. In Ukraine, the legal regulation of investment activity is aimed at creating favorable conditions for attracting foreign and domestic investment, protecting investors' rights and ensuring stable economic development.
Key regulations
The legal regulation of investment activity in Ukraine is based on a number of regulations, including the following key ones:
TheLaw of Ukraine "On Investment Activity". This law defines the legal, economic and social conditions of investment activity in Ukraine, establishes the basic principles of state policy in the field of investment and investor rights.
TheLaw of Ukraine "On the Regime of Foreign Investment". The Law regulates the attraction of foreign investments into the Ukrainian economy, establishes legal guarantees and protection of the rights of foreign investors, as well as the procedure for investment transactions.
TheLaw of Ukraine "On Public-Private Partnership". This law defines the legal framework for cooperation between the state and the private sector in the implementation of joint projects, and establishes mechanisms for attracting private investment in state and municipal projects.
TheLaw of Ukraine "On Joint Investment Institutions". The Law regulates the activities of collective investment institutions, including mutual and corporate investment funds, and sets requirements for their establishment and operation.
TheLaw of Ukraine "On Protection of Investors' Rights". This law establishes legal guarantees and mechanisms for the protection of investors' rights, including protection against nationalization, confiscation and other unlawful actions by state authorities.
State regulatory authorities
The main governmental authorities responsible for regulating and supervising investment activities in Ukraine are:
TheMinistry of Economy of Ukraine. The Ministry is responsible for formulating and implementing the state policy in the field of investment activities, including the development of regulations, support for investment projects and coordination of activities of other state authorities.
TheNational Securities and Stock Market Commission (NSSMC). The Commission regulates and supervises the activities of collective investment institutions, stock exchanges and other professional securities market participants.
TheState Agency for Investment Attraction and Support (UkraineInvest). The Agency is engaged in attracting foreign investment into the Ukrainian economy, provides information and consulting support to investors, and facilitates the implementation of investment projects.
Forms of investment activity
Investment activity in Ukraine can be carried out in various forms, including:
Direct investment. This is an investment of capital in the creation, development or acquisition of enterprises in Ukraine. Direct investments can be made by contributing cash, property, intangible assets, technology, etc.
Portfolio investments. This is the purchase of securities, shares, bonds and other financial instruments in the stock market. Portfolio investments are made with the aim of making a profit from the growth in the value of securities or receiving dividends and interest.
Reinvestment. This is the investment of profits from investment activities in the further development of enterprises or the acquisition of new assets. Reinvestment contributes to capital growth and investment efficiency.
Collectiveinvestment institutions. These are investment funds that accumulate funds from many investors for further investment in various assets. Collective investment institutions can be mutual or corporate and aim to reduce risks and increase investment returns.
Public-private partnerships
Public-private partnerships (PPPs) are an important mechanism for attracting private investment in state and municipal projects. The Law of Ukraine "On Public-Private Partnership" defines the legal framework for cooperation between the state and the private sector in the implementation of joint projects. The main provisions of this law include:
Forms of public-private partnership. The law provides for various forms of PPPs, including concessions, joint venture agreements, property management agreements, and others.
PPPsupport mechanisms. The state provides various forms of support for PPPs, including financial incentives, tax benefits, state guarantees, etc.
Procedure for concluding PPPagreements. The Law establishes the procedure for concluding PPP agreements, including the procedures for competitive selection, conclusion and execution of agreements.
Protection of investors' rights
Protection of investors' rights is one of the main objectives of the legal regulation of investment activity in Ukraine. The legislation provides for a number of mechanisms to protect investors' rights:
Legal guarantees. Investors are entitled to protection of their rights and interests, including protection from nationalization, confiscation and other unlawful actions by state authorities.
Judicialprotection. Investors have the right to apply to the court to protect their rights and interests in case of their violation. Judicial protection includes dispute resolution, damages and other measures.
International arbitration. The legislation provides for the possibility for foreign investors to apply to international arbitration institutions to resolve disputes with state authorities.
Mediation mechanisms. Mediation and other alternative dispute resolution mechanisms may be used to resolve disputes between investors and government agencies.
Investment incentives
Ukrainian legislation provides for various forms of investment incentives, including:
Tax incentives. Investors may enjoy tax benefits, including reduced corporate income tax rates, tax exemptions for a certain period, and others.
Financial support. The state provides financial support for investment projects, including grants, subsidies, government loans and guarantees.
Investment preferences. Investors may receive investment preferences in the form of reduced utility tariffs, lease of state property, access to infrastructure, etc.
Special economic zones. Ukraine has created special economic zones that provide investors with additional incentives in the form of tax and customs benefits, simplified administrative procedures, etc.
Regulation of investment risks
Investment activities always involve certain risks, including political, economic, legal and other risks. Ukrainian legislation provides for mechanisms to regulate investment risks, including:
Investment insurance. Investors may insure their investments against various risks, including political risks, nationalization risks, changes in legislation, etc.
State guarantees. The state may provide investors with state guarantees for the return of investments in the event of certain risks.
International agreements on investment protection. Ukraine has entered into a number of international investment protection agreements that provide for mechanisms to protect investors' rights and resolve investment disputes.
Monitoring and control mechanisms. State authorities monitor and control the implementation of investment projects, compliance with legislation and contractual terms.
Conclusion.
The legal regulation of investment activity in Ukraine is an important tool for ensuring stable economic development, attracting foreign and domestic investment, protecting investors' rights and stimulating investment activity. It includes the regulatory framework, the activities of state regulatory authorities, mechanisms for protecting investors' rights, promoting investment and regulating investment risks. Effective legal regulation contributes to the creation of a favorable investment climate, enhancing the competitiveness of the national economy and ensuring sustainable economic development of Ukraine.
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