Trade and Economy
Ukraine-Georgia Bilateral Trade
According to the State Statistics Service of Ukraine, in 2021 the volume of trade in goods and services between Ukraine and Georgia increased by 31.4% and amounted to $750.6 million. The volume of exports of Ukrainian goods and services to Georgia increased by 23.2% and amounted to $494.9 million, and the volume of Georgian imports of goods and services to Ukraine increased by 51.0% and amounted to $255.8 million. The balance in trade in goods and services was positive for Ukraine and amounts to $239.1 million.
The volume of trade in goods between Ukraine and Georgia increased by 27.7% and amounted to $641.0 million. The volume of export of Ukrainian goods to Georgia increased by 19.0% and amounted to $436.1 million, and the volume of Georgian import of goods to Ukraine increased by 51. 3% and amounted to $204.9 million. The balance in trade in goods was positive for Ukraine and amounts to $231.2 million.
The volume of trade in services between Ukraine and Georgia increased by 58.2% and amounted to $109.6 million. The volume of export of Ukrainian services to Georgia increased by 66.2% and amounted to $58.7 million, and the volume of Georgian import of services to Ukraine increased by 49,8% and amounted to $50.9 million. The balance in trade in services for this period was positive for Ukraine and amounted to $7.9 million.
According to the National Statistics Office of Georgia, in January-June 2022 the volume of trade in goods between Ukraine and Georgia decreased by 35.6% and amounted to $212.6 million. The volume of export of Georgian goods to Ukraine decreased by 37.0% and amounted to $86.9 million, and the volume of import of Ukrainian goods to Georgia decreased by 34.7% and amounted to $125.7 million. The balance in trade in goods during this period was positive for Ukraine and amounted to $38.8 million
The keystone of Ukrainian export to Georgia were: iron and steel - 11.8%; tobacco and industrial tobacco substitutes - 10.0%; nuclear reactors, boilers, machines and mechanical devices, parts thereof - 5.8%; residues and waste from the food industries - 5.8%; pharmaceutical products - 5.2%; paper and paperboard - 4.5%; Preparations of cereals, flour, starch or milk - 4.0%; electrical machines and equipment and parts thereof - 3.5%; meat and meat products - 3.0%; beverages, spirits and vinegar - 2.8%; cocoa and cocoa preparations - 2.8%, Articles of iron or steel - 2.7%.
The keystone of Georgia import to Ukraine were: vehicles - 38.4%; beverages, spirits and vinegar - 22.0%; fertilizers - 15.0%; iron and steel - 9.0%; plastics and articles thereof - 3.7%; nuclear reactors, boilers, machines and mechanical devices, parts thereof - 2.2%; personal items – 2.2%; copper and articles thereof - 1.7%.
Investment cooperation between Ukraine and Georgia at the current stage does not meet the needs of both countries. At the same time, the potential for expanding bilateral cooperation is quite large and primarily covers such areas as energy, transport, construction, tourism, agriculture, food industry.
According to the National Bank of Ukraine, as of December 31, 2021, the total amount of direct investments that came from Georgia to the economy of Ukraine amounted to $6.8 million and increased by $4.7 million compared to the beginning of the year. According to the National Statistics Office of Georgia, in 2021 FDI from Ukraine to Georgia amounted to $10.7 million, in the 1st quarter 2022 - $0.2 million.
Exporters and Investors Council under the Ministry of Foreign Affairs of Ukraine
Exporters and Investors Council (EIC) under the Ministry of Foreign Affairs of Ukraine was established in 2013 in order to safeguard national interests in Ukrainian export promotion and attraction of foreign investments to Ukraine.
EIC is a platform, which unites Ukrainian producers, exporters and leading business associations providing necessary support in promoting their goods and services abroad and entering new markets, as well as attracting foreign investors and companies to Ukraine effectively using diplomatic tools, resources and networks.
The Head of the Council is the Minister for Foreign Affairs of Ukraine.
More information - https://rei.mfa.gov.ua/en
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Invest in Ukraine
UkraineInvest - https://ukraineinvest.gov.ua/
UkraineInvest Guide - the main source of information about Ukraine for potential investors - https://ukraineinvest.gov.ua/guide/
Office of the National Investment Council of Ukraine - http://www.nicouncil.org.ua/en/
Export Promotion Office of Ukraine - https://epo.org.ua/en/
Ministry of Economy of Ukraine - https://me.gov.ua/old/?lang=en-GB
Ministry of Agrarian Policy and Food of Ukraine - https://minagro.gov.ua/en
Ministry of Infrastructure of Ukraine - https://mtu.gov.ua/en/
State Service of Ukraine on Food Safety and Consumer Protection - https://dpss.gov.ua/en
ProZorro Public Procurement system - https://prozorro.gov.ua/en
State Property Fund of Ukraine - http://www.spfu.gov.ua/en/
State Service for Geology and Subsoil of Ukraine - https://www.geo.gov.ua/en
Fairs and exhibitions in Ukraine
Business and investment opportunities in Ukraine by regions
Buy from Cherkasy region
Investment passport of Kryvyi Rih
Investment Opportunities by Industries
Commercial offers by Ukrainian exporters
Catalogue of the Ukrainian Organic Exporters https://bit.ly/3EEv7cB
Attraction of investments into an industrial sector of economy by introducing
additional incentives in industrial parks
As of 07.09.2021 Ukraine’s Parliament adopted the amendments to the law of Ukraine "On Industrial Parks" aimed at attracting investments into an industrial sector of the economy of Ukraine.
These newly-adopted amendments provide for a variety of economic incentives that meet the modern world trends and are intended to increase the volume of direct investments in the industrial parks of Ukraine, as well as their competitiveness. Among those incentives are the following:
● An opportunity to carry out an economic activity for processing industrial and/or household waste (except for disposal) within industrial parks.
● Eased minimum (from 15 hectares to 10 hectares) and maximum requirements for total area of industrial parks (from 700 hectares to 1000 hectares).
● Introduced opportunity to startup "brownfield" investment projects within industrial parks.
● Exemption from reimbursement of agricultural losses, when using land plots for the placement of industrial (industrial) parks.
● Full or partial compensation of interest rates on loans, non-refundable financing. Respective incentives could be provided to managing companies, companies-initiators and/or participants of industrial parks for the purpose of arranging an industrial park, as well as for the purpose of carrying out economic activity within an industrial park in accordance with the procedure established by the Cabinet of Ministers of Ukraine. The respective order, which will introduce the procedure for applying for the above incentives shall be adopted by the Cabinet of Ministers of Ukraine within 6 months from the date of coming into force of this amendments (until March 2022)
● Compensation for connecting to engineering grids (incl. compensation for connecting to the electric grid). The respective incentive could be provided to managing companies and/or companies-initiators of industrial parks at the expense of state, local budgets and other sources not prohibited by law, in accordance with the procedure established by the Cabinet of Ministers of Ukraine. The respective order, which will introduce the procedure for applying for the above incentives shall be adopted by the Cabinet of Ministers of Ukraine within 6 months from the date of coming into force of this amendments (until March 2022)
In order to guarantee the implementation of above-mentioned forms of state incentives, a mandatory provision regarding assigning at least UAH 2 bln on arranging of industrial parks in state budgets’ expenditures has been introduced for the period of 2022-2026. Apart from the amendments to the law of Ukraine "On Industrial Parks" dated 07.09.2021, additional tax and customs incentives have been announced by the registration at the
Verkhovna Rada of Ukraine of draft laws No. 5688 and 5689. The accompanying draft law No. 5688 dated 26.06.2021, which provides for amendments to the Tax Code of Ukraine, will in future allow participants of industrial parks to use the following tax incentives:
● CIT Exemption. Participants of industrial parks would be able to apply for a 10-year CIT exemption on income earned from their business activity within the industrial park. However, the respective CIT exemption would be applied only if the respective amount of money will be reinvested by the participant into the development of the
investment project. Such an exemption will be applied by a controlling authority for 10 consecutive years from the moment of submission of the relevant application by the participant of the industrial park.
● VAT exemption on operations of importing of new equipment (components) by the participants of industrial parks. In order for such an exemption to be applied, the respective equipment (components) shall be intended only for the own use of the participant of industrial parks.
● Favourable land tax rates. The draft law No. 5688 stipulates that by decision of the local self-government body participants of industrial parks might be granted more favorable land tax rates. The accompanying draft law No. 5689 dated 26.06.2021 provides for amendments to the Customs Code of Ukraine, which will allow participants of industrial parks to use exemption from taxation of customs duties on new equipment (components) imported by such participants for their own use only.
Law of Ukraine on State Support for Investment Projects with Significant Investments
Law of Ukraine on State Support for Investment Projects with Significant Investments entered into force on 13 February 2021.
According to this law Ukraine will provide a number of incentives for large investment projects, in particular:
tax incentives (exemption from the income tax, from customs duties and VAT when importing new equipment into Ukraine);
simplified provision of land necessary for investment project;
construction&reconstruction of related infrastructure at the expense of the state;
consolidation of investor guarantees through the conclusion of a direct agreement with the Government of Ukraine for 15 years.
The total amount of state support shall not exceed 30% of the amount of investment in the project.
State support will be provided for investors who are going to invest more than 20 million euros as well as to create at least 80 new workplaces.
The project implementation period should not exceed 5 years in such sectors of economy:
processing industry (except for the production and circulation of tobacco products, alcohol, and alcoholic beverages);
extraction for further processing and / or enrichment of minerals (except coal, crude oil and natural gas);
transport, warehousing, postal and courier activities, logistics;
education and science;
health care, art, culture, sports, tourism, resort and recreational industry.
This bill was developed on the basis of best practices existing in the EU and our neighboring countries.