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Registration of foreign investments. What is the investor’s benefit?

27.12.2013, 15:12

Foreign businessmen, who have business in Ukraine, often face the choice: to register or not the foreign investments? On the one hand Ukrainian legislation does not allow for compulsive registration of foreign investments but on the other hand this procedure can simplify his entrepreneurial business a lot. How?

The investor himself is interested in foreign investments registration

As we have already mentioned Ukrainian legislation does not bind non-residents, who carry on business in Ukraine, to register the gained investments. But the number of legislative acts and rulings set guarantees and benefits, which the non-resident gets in order of registration of his investments. For example part 3 article 395 of Code of Commercial Procedure of Ukraine states that if the investments are not registered the non-resident does not get the guarantees and benefits. It is also mentioned in the Foreign Investment Environment Act of Ukraine. Therefore the investor himself is interested in foreign investments registration.

In general the investing of commercial activity of non-residents is regulated by the following legislative acts:

  • Foreign Investment Environment Act of Ukraine.
  • “Concerning confirmation of procedure of foreign investment state registration/reregistration and its annulment” Act of Ukraine.
  • The Resolution of Cabinet of Ministers from 06.03.2013. №139 “Procedure of foreign investment state registration/reregistration and its annulment”.
  • Etc.

What guarantees the foreign investment registration gives?

There are some guarantees for protection of foreign investments in Ukraine:

  • The guarantees in case of changing the legislation about foreign investments;
  • The guarantees in case of forcible withdrawal and illegal measures of regulatory bodies;
  • Compensations and remedy of losses for foreign investors;
  • The guarantees of profit repatriation and use of income from foreign investments;
  • The guarantees in case of termination of investment activity;
  • Other guarantees on carrying out of investment activity.

Besides there are some government programs for attracting foreign investments to strategic branch of economy and social sphere, which can fix additional benefits for the enterprise, which operates in these spheres.
Foreign Investment Environment Act of Ukraine understands profit as a relief from duties for taking property of a foreign investor as a contribution to the authorized capital with foreign investments.

What is the procedure for the registration?

Before the procedure of registration we recommend you to check with the regulatory body what documents you should prepare. If you turn to law firm to perform this procedure the specialists will deal with this subject.

The procedure of foreign investments registration begins with introduction of amendments to foundation documents, which concern contribution to the authorized fund of foreign investments. These amendments must be also registered at the Registration office.
When these amendments are registered, the facilities can be transferred to the cheque account of the investor. It is necessary to get a tick from tax authority on real introducing investments. When the tick from Ministry of revenues and duties is received, the investment must be registered at the State administration.

Note that if you have several investments then there must be registration procedure for each investment and the package of documents must be also prepared for each investment.

The process of foreign investment registration can take a lot of time, especially if non-resident, who doesn’t know Ukrainian legislation well, will perform the procedure himself. But the guarantees and benefits, which you get after the registration, are worth the cost. And to avoid spending of the time you can direct this matter to the lawyers.