The Law of Ukraine "On Industrial Parks"

The Law of Ukraine "On Industrial Parks"

The Law of Ukraine "On Industrial Parks" (Law) defines the legal and organizational grounds for establishing and operating the industrial parks within the territory of Ukraine to ensure economic development and increase the competitiveness of regions, activate investment activities, create new jobs, develop modern industrial and market infrastructure. 

Legislation on Industrial Parks: 

The Constitution of Ukraine, the Civil Code of Ukraine, The Economic Code of Ukraine, The Land Code of Ukraine, the Tax Code of Ukraine, the Customs Code of Ukraine, this Law, the Law of Ukraine "On Regulation of City Planning Activity," other legislative acts of Ukraine, as well as international treaties of Ukraine ratified by the Verkhovna Rada of Ukraine. 

State support for industrial parks 

The Law of Ukraine's "On Industrial Parks" and respective changes to the Tax Code and the Customs Code provide state incentives for investment parks. The following incentives are available for initiators of the creation of industrial parks, their management companies, and participants: 

• exemption from income tax for ten years, subject to reinvestment in the development of the investment project; 
• exemption from VAT on the import of new equipment for own use; 
• the possibility of granting benefits for real estate taxation on the territory of industrial parks by decision of the local authority; 
• exemption from import duty taxation of new equipment imported by participants of industrial parks for their use; 
• non-refundable financing to arrange an industrial park and/or construction of related infrastructure facilities (highways, communication lines, heat, gas, water and electricity, utilities, etc.); 
• compensation for connecting to engineering grids (incl. compensation for connecting to the electric grid, national railway system, gas-, heat- and water supply networks).

Terms of use 

The land plot to be used for the creation and operation of the industrial park may be located within or outside settlements and must meet the following requirements:  

• belong to industry lands; 
• be suitable for industrial use, taking into account the conditions and restrictions established by the relevant urban-planning documentation 
• have an area of 10 to 1000 ha. 

The use of land plots on lands of state or municipal property is carried out in compliance with the following conditions: 

• the period of use of a land plot within the scope of an industrial park must be liable at least 30 years from the date of deciding to create an industrial park; 
• the use of land plots must respond to sanitary, epidemiological, and environmental requirements. 

Facilities that may be located in the industrial park include: 

• offices of the management company, participants and other entities of the industrial park, financial institutions, objects of marketing and advertising;
• preschool education institutions, general secondary education institutions, institutions of higher, professional higher, and professional (vocational and technical) education; 
• science parks, accelerators, and laboratories for the development of innovative technologies; 
• multi-purpose halls for scientific conferences and other events; 
• fire brigades; 
• green areas; 
• industrial, warehouse buildings and structures, logistics infrastructure facilities; 
• engineering buildings and structures; 
• waste management facilities (except waste disposal); 
• other objects not prohibited by Law. 

Sources of provision of finance for the development of an industrial park 

The sources of provision of finance for the development of an industrial park may be funds from the state and local budgets allocated following the procedure and amounts provided for by Law, funds from private investors, including funds attracted under the model of state-private partnership, attracted funds, including loans from banks and other financial and credit institutions, funds from other sources not prohibited by Law. 

Creation of the IP 

The initiator makes the decision to create an industrial park of the creation based on the concept of an industrial park approved following the requirements of this Law. 

The initiator of the creation, within five working days from the date of the decision to create an industrial park, is obliged to submit to the competent government authority a copy of the decision to develop an industrial park and the concept of the industrial park. 

The decision to create an industrial park is the reason for the agreement concluding on the creation and operation of an industrial park between the initiator and the management company of an industrial park. 

List of documents for inclusion of an IP in the Register of Industrial Parks 

To decide on the inclusion of the industrial park in the Register of Industrial Parks, the initiator of the creation shall submit the following documents to the authorized state body: 

1. The application for inclusion of the industrial park into the Register of Industrial Parks; 
2. The decision of the initiator on the creation of the industrial park; 
3. The concept of the industrial park; 
4. An extract from the State Land Cadastre regarding the land plot and title documents for the real estate objects located thereon; 
5. Name of the management company and participants (if any).   

The industrial park is included in the Register of Industrial Parks within 45 business days from the date of receipt of the application from the initiator of the industrial park by the authorized state body. 

The authorized state body, following the procedure approved by the Cabinet of Ministers of Ukraine, shall review the documents within 21 business days from the date of receipt of the papers from the initiator of the establishment.