Industrial Parks in Ukraine: Driving Economic Development
In recent decades, Ukraine has actively developed its economy, and one of the key elements of this development has been the establishment of industrial parks. These territories, offering unique opportunities for the placement of manufacturing facilities and innovative companies, play a crucial role in attracting investments and creating jobs.
As of the writing of this article, Ukraine has 61 registered industrial parks. The creation of new industrial parks is planned for 2024, particularly in Poltava, Mykolaiv, Lviv, the Kyiv region, and Zakarpattia.
What are industrial parks?
Industrial parks are specialized areas that provide infrastructure and support for various types of businesses, primarily in industrial production. They typically offer companies access to modern engineering, transportation, and communal infrastructure, as well as providing tax incentives and state support.
In Ukraine, within the territory of industrial parks, economic activities can include:
- Manufacturing industries
- Processing of industrial and/or household waste (excluding waste disposal)
- Scientific and technical activities
- Activities in the field of information and electronic communications
Advantages of industrial parks in Ukraine:
- 10-Year Corporate Income Tax Exemption: Companies in industrial parks can enjoy exemptions from corporate income tax for 10 years, stimulating investment attraction and job creation. The condition for income tax exemption is reinvesting the exempted amount back into the development of the investment project.
- Compensation of Interest Rates on Loans: A company participating in an industrial park can receive compensation for interest rates on loans obtained for conducting economic activities within the industrial park or for the development of the industrial park.
- Granting Funds Non-Repayable Basis: For the development of industrial parks and/or the construction of related infrastructure (roads, communication lines, heating, gas, water, and power supply facilities). This is more relevant for park initiators and managing companies.
- Compensation for Connection Costs: Initiators or participating companies can receive compensation for costs related to connecting to engineering and transportation networks.
- VAT Exemption on Equipment Import: Exemption from VAT is granted for the import of only new equipment intended for the personal use of the importing company.
- Exemption from Import Duties: Exemption is granted for import duties only on new equipment imported by industrial park participants for personal use.
- Property Tax Benefits: Local authorities may apply property tax benefits within the territories of industrial parks.
- High-Level Infrastructure: Many industrial parks in Ukraine provide modern manufacturing facilities, offices, warehouse spaces, as well as technical and engineering support.
- Efficient Transportation System: Most parks are strategically located with convenient access to highways and railway lines, ensuring logistical convenience.
- Innovation Support: Some industrial parks actively promote the development of innovative companies by providing access to scientific and educational resources.
Examples of successful industrial parks in Ukraine:
- Kyivshchyna Industrial Park: One of the fastest-growing industrial parks in Ukraine, located in Novi Petrivtsi village in the Kyiv region, covering an area of 170 hectares. The park specializes in light industry, food industry, and other sectors.
- Bila Tserkva Industrial Park: A success story in industrialization, this park actively attracts manufacturing in the automotive and electrical industries.
- E40 Industrial Park: A new industrial park located in the Kyiv region, in Kolonshchyna village, at the 27th kilometer of the E40 Kyiv highway. The park covers a total area of 49 hectares. E40 Industrial Park has the potential to become one of the leading industrial parks in Ukraine, offering attractive conditions for business and contributing significantly to the development of the Ukrainian economy.
The Future of Industrial Parks in Ukraine:
Considering the rapid advancement of technologies and the growing interest in the Ukrainian market, industrial parks are becoming a key factor in attracting foreign investments and technological development. The government continues to refine legislation and provide support for the creation of new parks, creating favorable conditions for business and ensuring stable economic growth.
Conclusion:
Industrial parks in Ukraine have become a powerful catalyst for economic development, providing companies with modern conditions for production and innovation. With active state support and strategic locations, they will continue to play a crucial role in shaping a sustainable and diverse economy for the country.
