Features of registration of foreign investments in Ukraine

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Features of registration of foreign investments in Ukraine 22.08.2016 09:42

Foreign investments are invested by foreign investors’ values in objects of investment activities in order to make a profit or to achieve social effect.

Article 2 of the Law of Ukraine «On Foreign Investments Regime» defines a list of values that can be made to the authorized capital, as foreign investments, namely:

foreign currency;
currency of Ukraine;
any movable and immovable property;
stocks, bonds, and other securities;
monetary claims and rights to require performance of contractual obligations;
intellectual property rights;
the right to conduct economic activities and other.

Foreign investors are: non-resident companies, non-resident individuals, governments, international organizations.

Investments can be direct and portfolio. If the portfolio investment is a monetary investment in marketable securities for the subsequent income extraction, so direct investment is different in that the money investing in the statutory fund and the assets of the company itself. In most cases, direct investment implies the acquisition of the majority of the company’s shares (controlling interest) that enables the investor to participate directly in the management of the company.

Direct investments are mainly implemented in the long term, at the same time a contributor has a direct interest in the further development and prosperity of the company. The special funds are created in order to accumulate all investment funds on the ground. Moreover, direct investments are practiced by large enterprises for opening their branches abroad.

Features of registration of investments

The state registration of investments implies the provision of state guarantees to the investor.

The state registration of foreign investments is carried out according to the Law of Ukraine «On Foreign Investments Regime» and also Regulations on the procedure of state registration (re-registration) of foreign investments and their cancellation approved by the Cabinet of Ministers of Ukraine.

The state registration of investments is:

protection in the event of changes in legislation;
protection against forced acquisition;
Protection from unlawful actions of state bodies;
guarantee of compensation and damages;
guarantee of investment returning;
guarantee of transfer of profit, interest and dividends.

The procedure of registration of foreign investments, both monetary and property is identified by the Regulations on the procedure of state registration (re-registration) of foreign investments and their cancellation.

The registration of foreign investments enforcement after actual making investment as confirmed by relevant documents - a certificate from the bank, customs declaration and so on.

For the state registration of foreign investment must be paid a fee in the amount of twenty non-taxable minimum incomes of citizens on the day of registration of the foreign investment.

After submission of all documents (information notification, the documents confirming the form of the investment and monetary amount of the investment), the registry office fixes the date of obtaining documents and within three working days from that date, considers the presented documents and makes a decision on registration of foreign investment or on the refusal.

The state registration of foreign investments is carried out by assigning to information report about the depositing of foreign investment registration number which marks on the report.

Advantages of registration of investments

In addition to these guarantees and protection, the investor has an opportunity to file a permanent residence permit in Ukraine. On the condition that the amount of the investments are must be at least one hundred thousand (100, 000) dollars.

Also, the procedure of registration of foreign investments can minimize tax liabilities. For example, registered foreign investments are exempt from the import duties.

Refusal of registration of foreign investments

According to Article 14 of the Law of Ukraine «On Foreign Investments Regime» state registration of foreign investments may be denied only in cases where there is a violation of the established registration procedure. Refusals for reasons of its inexpediency are not permitted. Refusals of state registration of foreign investments should be in a written form with the reason for the refusal indicated, and can be appealed in court. In case of refusal to register investments, registration fee is non-refundable.

World experience

Let’s consider the procedure of registration of investments in the USA, which is a leader in the global economy for comparison.

The position of the US government in the regulation of foreign direct investments inflows lies in free admission of foreign entrepreneurs in the country as a whole. Under the USA legislation, a foreign company can open its representative office and to conduct commercial activity in any state of the country.

Completed application form with a fixed set of information about representative office of a foreign company is required in order to register this company. American law firm is preparing the relevant documents on the basis of this questionnaire and sends a request to the State Chamber of Registration of Administration to obtain the registration number of representative office, certificate on establishment of the company, seal, register of shareholders meetings and the identification number for the tax payment. The presence of violations of the legislation on the taxation can become the basis for a formal refusal to allow the opening of the representative office.

Obviously, procedure of registration of investments is maximally simplified in the USA. Among the European countries, for example, there is an electronic registration of investments in Denmark.

Ukraine's economy is attracting foreign investors in the various spheres of economic activity. State Statistics Service of Ukraine reported that investments were received from 134 countries around the world in 2015. The major investors in Ukraine, which account for 83% of total investments, are Cyprus, the Netherlands, Germany, Russia, Austria, the United Kingdom, the British Virgin Islands, Switzerland and Italy.

It is worth to address to specialists of the company «AРС» for successful and fast registration of investments. The lawyers will consult you and comprehensively accompany the process of registration in the state bodies.

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