How to open an industrial park in Ukraine?
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International experience of the mechanism of economic development, attraction of investments to support small and medium-sized businesses, increasing employment by creating an Industrial Park is now available in Ukraine.
Entrepreneurs receive a territory for their activities with appropriate engineering, transport, energy and other infrastructure, simplified regulatory procedures, as well as investment incentives to carry out their business activities.
In our article, the lawyers will tell you about the main stages to be passed in order to create an industrial park, and most importantly, where to start.
What is an Industrial Park and what are its advantages?
An industrial park is an area for activities with appropriate engineering, transport, energy and other infrastructure, simplified regulatory procedures, as well as investment incentives for entrepreneurs and industrial development.
The industrial park provides the following advantages:
- For members, it is a reduction in the cost of organizing activities, because they get a ready-made space, the necessary infrastructure, so they can invest more in their activities.
- For local communities and the state, it is the creation of new jobs, an increase in budget revenues, due to the development of the economy, social and economic development of territories, increased economic activity, the growth of industry, etc.
What benefits does an industrial park receive?
An industrial park provides its participants with an opportunity to receive related services from the management company, which means that there is no need to hire additional personnel or look for professional outsourcing. The Tax Code provides for a 10-year exemption from taxation of a park participant’s profits, but for certain types of activities (e.g., processing industry, waste collection, treatment, and disposal). Additional tax benefits and exemptions can also be established by local authorities.
Another important point is that the initiators of the industrial park may fully or partially compensate for certain costs associated with the establishment of the park, using funds from the state, local budgets and other sources not prohibited by law.
In addition, participants of the Industrial Park are provided with tax and customs incentives.
You may also like: Industrial Park Concept
What is needed to establish an industrial park?
First of all, it is necessary to have an appropriate land plot of at least 10 hectares. The land may be in state, communal or private ownership, be leased, belong to one or more owners.
Please note! It should be land suitable for industrial use and executed in accordance with the requirements of Ukrainian legislation, that is, it must have an appropriate cadastral number.
An important factor is also the integrity of the land plot, with the exception of the division of the road network of electricity, heat, water, gas or other transport infrastructure.
It is impossible to register a sole proprietorship without preliminary development and approval of the concept of Industrial Park, which will establish:
- its purpose;
- the development plan;
- requirements for participants;
- the functional purpose of the park;
- other organizational aspects.
This is the most voluminous and quite complicated document in terms of its development. It must specify all the individual features of your park, prove that it will be economically profitable and will contribute to the development of the region.
It is important to pay attention to the availability and accessibility of labor, financial and logistical resources. For example, if you plan to attract participants who will engage in wood processing, you need to consider the cost of electricity and transport infrastructure for such activities.
The Industrial Park may be rejected for registration in the State Register of Industrial Parks in case of lack of support from the local government and local executive authorities.
Stages and terms of registration of an Industrial Park in Ukraine
At the first stage, the initiator of the industrial park decides to create an industrial park in accordance with the developed concept.
Please note! An industrial park shall be established for a term of at least 30 years.
Within the next 5 business days the decision is submitted to the Ministry of Economy together with:
- its concept;
- an extract from the State Land Cadastre;
- documents confirming ownership rights to the buildings located on the land plot;
- information about the management company and the participants (if any);
- an application for inclusion in the Register.
The documents must be reviewed within 21 business days and transferred to the Cabinet of Ministers of Ukraine, which decides on the inclusion of the park in the Register, or refusal of inclusion.
The total period of consideration of documents for the registration of an Industrial Park is 45 business days, i.e. not more than two months.
As a rule, this procedure takes two months or more to prepare the documents. The situation depends on individual factors (bringing all the documents for land, buildings, technical and planning documentation, contracts, etc., development and approval of the concept, etc. in compliance with the requirements of the law).
If a foreign person wants to become a participant of an Industrial Park
Participants of an Industrial Park can be entities of different forms of ownership that are registered within the Industrial Park and have acquired ownership of land or immovable property. It is obligatory to conclude an agreement with a management company.
If foreign investors intend to become a participant of an industrial park in Ukraine, they he also need to:
- conclude an agreement with a management company;
- but or rent a plot of land or real estate in the industrial park.
The specialists of our company have repeatedly helped the initiators of the industrial park at different stages. the most common requests we receive are as follows:
- Studying and appropriate execution of documents for the land plot (detailed site plan, strategic and environmental assessment, determination of the status of construction sites);
- Development of the Industrial Park concept;
- Assistance in establishing the management company (including bidding);
- Preparation of a package of documents for inclusion in the Register of Industrial Parks.
In addition, our lawyers have experience in assisting Clients with analyzing and preparing documents for participation in the tender in order to become participants of the Industrial Park.
We will help to optimize and speed up the process of creation and registration in the Register of Industrial Parks.
Please see the cost of Industrial Park registration here.