Iryna Pavliuk
Senior Lawyer in BDO in Ukraine
The programs facilitates easier access for businesses to bank loans by offering the possibility to obtain loans at a discounted interest rate through state-funded interest rate compensation. The compensation is provided at rates ranging from 0% to 9% pera year for loans in the national currency.
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The State Program “Affordable Loans 5-7-9%” provides for:
- setting the compensation rate for loans for investment purposes for medium and large enterprises at 9% per annum with the possibility of reducing it to 7% per annum if new jobs are created;
- setting the compensation rate for loans for investment purposes for micro and small enterprises at 7% per annum with the possibility of reducing it to 5% for investment loans;
- setting a compensation rate of 9% per annum for working capital loans for all enterprises;
- Within the framework of the State Program "Affordable Financial Leasing 5-7-9%":
- setting the compensation rate for medium and large enterprises at 11% per annum with the possibility of reducing it to 9% per annum if new jobs are created;
- setting the compensation fee for micro and small enterprises at 9% per annum with the possibility of reducing it to 7% per annum if new jobs are created.
These programs are mainly regulated by the Rules for Providing Financial State Support to Business Entities and the Rules for Providing Financial State Support to Business Entities under Financial Leasing Agreements, approved by the Resolution of the Cabinet of Ministers of Ukraine No. 28 dated 24.01.2020.
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Investment Nanny Program
This program provides for:
- CIT exemption (for 5 years by choice);
- Exemption from VAT for importing new equipment and components to it and Exemption from import duties for new equipment and components to it (the list and volumes of equipment are approved by the Cabinet of Ministers for each project);
- Lease of state or communal land plots without land auctions;
- Land tax exemption or reduced land tax rates;
- etc.
This program is mainly regulated by the Law of Ukraine “On State Support of Investment Projects with Significant Investments in Ukraine” No. 1116-IX dated 17.12.2020 and the Law of Ukraine “On Amendments to the Tax Code of Ukraine Concerning Peculiarities of Taxation of Business Entities Implementing Investment Projects with Significant Investments in Ukraine” No. 1293-IX dated 0.03.2021.
Expected changes to the public-private partnership rules
On October 6, 2022 Verkhovna Rada of Ukraine approved as a basis the draft law "On Amendments to Certain Legislative Acts of Ukraine on Improving the Mechanism for Attracting Private Investment through the Mechanism of Public-Private Partnership to Accelerate the Restoration of War-Damaged Facilities and the Construction of New Facilities Related to the Post-War Economic Restructuring of Ukraine".
The goal of the draft law is to simplify the procedure for preparing and implementing public-private partnership (PPP) projects for the reconstruction of infrastructure facilities destroyed by the war and (construction of new facilities related to post-war economic restructuring (hereinafter referred to as the Projects), in particular providing for:
- Implementation of an electronic procurement system for PPP projects in line with EU standards;
- Full implementation of the type of PPP projects based on payments from the budget, where the state does not transfer demand risk to the investor, but essentially pays for "infrastructure in installments" for the post-war reconstruction of Ukraine;
- Simplification of the procedure for preparing PPP projects, especially those related to the restoration of infrastructure in the post-war period, new construction projects related to the post-war economic restructuring, as well as "small" projects up to EUR 5.3 million;
- Simplification of the general procedure for preparing PPP projects at the state and local levels.
We remind you that the above-mentioned document is only a draft law and it may be adopted as a law in an amended form or not adopted as a whole.
Despite the fact that this publication has been carefully prepared by the company's specialists, it can only be used to get a general idea of the subject discussed in it. It is not recommended to use the information presented in the publication as professional advice on a specific issue. Prior to making any decision or taking any action that may affect your finances or business, a qualified professional advisor should be consulted. Please, contact BDO in Ukraine for advice.