Publication date: 09.07.2024
Legal regulation of foreign investment in Ukraine
Introduction
Foreign investment is an important component of the economic development of any country. They help to attract capital, create new jobs, introduce modern technologies and increase the competitiveness of the national economy. In Ukraine, the legal regulation of foreign investment is aimed at creating favorable conditions for attracting foreign investors, protecting their rights and ensuring stable economic development. In this article, we will analyze the main principles, regulations and authorities that regulate foreign investment in Ukraine.
Basic principles of legal regulation of foreign investment
The legal regulation of foreign investment in Ukraine is based on several basic principles that define the rules and norms of behavior of investment participants:
Theprinciple of non-discrimination. Foreign investors have equal rights with domestic investors and are guaranteed non-discriminatory treatment by state and local authorities.
Theprinciple of legal certainty and stability. Foreign investors should be confident in the stability of the legal regime governing investment activities and in the predictability of changes in legislation.
Theprinciple of investment protection. The state guarantees the protection of the rights and legitimate interests of foreign investors, including protection against illegal expropriation and nationalization.
Theprinciple of freedom of investment. Foreign investors have the right to freely choose the forms and amounts of investment, with the exception of restrictions established by law.
Theprinciple of investment promotion. The state provides favorable conditions for attracting foreign investment, including tax and customs benefits, creation of special economic zones, etc.
Key regulations
The legal regulation of foreign investment in Ukraine is based on a number of regulations, including the following key ones:
TheLaw of Ukraine "On Investment Activity". This law establishes the legal, economic and organizational framework for investment activity, defines the procedure for making investments and guarantees the protection of investors' 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.
TheLaw of Ukraine "On State Support of Investment Projects with Significant Investments". This law provides for the provision of state support to investment projects that are of strategic importance for the development of the Ukrainian economy.
State regulatory authorities
The main governmental authorities responsible for regulating and supervising foreign investment in Ukraine are:
TheMinistry of Economy of Ukraine. The Ministry is responsible for formulating and implementing the state policy in the field of investment activity, including attracting foreign investment, developing regulations, supporting investment projects and coordinating the activities of other state bodies.
National 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 responsible for attracting foreign investment into the Ukrainian economy, providing information and consulting support to investors, and facilitating the implementation of investment projects.
Forms of foreign investment
Foreign investment in Ukraine can be made in various forms, including:
Direct investment. This is an investment of capital in the creation, development or acquisition of enterprises in Ukraine. Direct investments may be made by way of 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.
Protection of the rights of foreign investors
Protection of the rights of foreign investors is one of the main objectives of the legal regulation of foreign investment in Ukraine. The legislation provides for a number of mechanisms to protect the rights of foreign investors:
Legal guarantees. Foreign investors are provided with legal guarantees, including protection from nationalization and confiscation, the right to repatriate profits, freedom of investment, etc.
Judicialprotection. Foreign investors have the right to go to court to protect their rights and interests in case of violation. Judicial protection includes dispute resolution, compensation for 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. Foreign investors may enjoy tax incentives, 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. Foreign 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. Foreign investors may insure their investments against various risks, including political risks, nationalization risks, changes in legislation, etc.
State guarantees. The state may provide foreign 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 foreign investment in Ukraine is an important tool for ensuring stable economic development, attracting foreign investors, protecting their 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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