How to invest effectively in Ukraine?

Ukraine is an attractive investment destination due to a number of factors that create prospects for foreign investors.

The main reasons to invest in Ukraine:

1. Geographical location

Ukraine is located at the crossroads of important transport routes between Europe, Asia and the Middle East. This provides convenient access to the markets of the EU, CIS and other regions. Of particular importance is the Black Sea coast, which provides access to global sea trade routes.

2. Resource potential

Ukraine has one of the richest resource bases in the world:

- Fertile soils. More than 30% of the world's black soil is located in Ukraine, making the country attractive for agricultural business.

- Mineral resources. Significant deposits of iron ore, coal, titanium and other minerals.

- Energy potential. Ukraine has opportunities for the development of renewable energy: wind, solar and bioenergy.

3. High level of human capital

Ukraine has a highly skilled and educated workforce, especially in the IT sector, engineering, medicine and science. The IT industry is one of the most dynamic and export-oriented, with numerous start-ups and successful projects attracting foreign investment.

4. Reforms and cooperation with the EU

Ukraine is actively implementing reforms in the following areas: deregulation; fighting corruption; reforming the judicial system; and creating tools to protect investors' rights.

Following the signing of the Association Agreement with the EU in 2014, Ukraine is integrating European standards into its economy, which facilitates exports to the EU.

5. Infrastructure development

Ukraine is actively modernising its transport, energy and logistics infrastructure. Investors have the opportunity to participate in railway modernisation projects, road construction, and the development of logistics hubs.

6. Competitive costs

Compared to other European countries, Ukraine has low labour costs; affordable prices for land and production facilities; and favourable tax policies in some industries.

7. Support for foreign investors

To attract foreign capital, special institutions have been established to help investors find opportunities, provide legal support and resolve administrative issues.

Foreign investors planning to invest in Ukraine should be aware that corporate investment funds are the most effective instrument for making investments in Ukraine. 

A corporate investment fund is a legal entity that carries out exclusively investment activities and has a number of specific features defined by the current legislation of Ukraine.

In order to establish a corporate fund in Ukraine, you should use the services of specialists working in the field of asset management and having extensive experience in supporting the process of establishing investment funds.

Investing in Ukraine through a corporate investment fund (CIF) is an effective and convenient mechanism that allows investors to implement their investment strategies while reducing tax costs and risks.

* https://itandem.com.ua/en/kif/ 

Advantages of investing through a corporate fund in Ukraine

1.    Tax advantages

- Tax deferral: A corporate fund provides an opportunity to reduce the tax burden, as profits earned from investments are not taxed immediately, but only when income is paid to investors. This allows investors to reinvest profits and earn additional income.

2.    Diversification of investments

- Risk distribution: A corporate fund can invest in different sectors of the economy and asset classes, which reduces risks for investors.

- Flexibility: Investment funds can adapt their investment strategies depending on changes in the market, which makes investing more flexible and manageable.

3.    Ease of entry into the market

- Simplified investment procedure: The investor invests in the fund by purchasing securities of the investment fund. The investment fund purchases various investment-attractive assets with the funds raised. For an investor, the process of investing in a CIF is simpler than investing directly in a company. The investor only needs to set up the fund, and the asset management company chosen by the investor provides further legal support and accounting for the investment fund. This can be particularly useful for foreign investors who are not yet familiar with the Ukrainian market.

* https://itandem.com.ua/en/cif-and-its-interaction-with-amc/ 

- Professional asset management: The fund is managed by a company that has a licence to manage assets and professional specialists on staff.  This allows investors not to spend time on day-to-day asset management, provides better risk control and the ability to engage experts to manage investments.

4.    Transparency and legal protection

- Investor protection: Ukrainian legislation provides clear rules for the operation of investment funds, which allows for the protection of investors' rights and transparency of the fund's activities.

- Audit and regulation: Corporate investment funds in Ukraine are regulated by the Securities and Stock Market Commission, which ensures control over their activities and compliance with the law.

5.    Investments in various sectors of the economy

- Real estate: Through the corporate fund, you can invest in commercial and residential real estate, which is a stable asset with the potential for capital growth and passive income.

- Technology and start-ups: Investors can invest in promising start-ups and technology projects, which allows them to support innovative development and earn high returns if successful.

- Agricultural sector and green energy: Ukraine is actively developing its agricultural sector and alternative energy, which are promising sectors for investment.

How to set up a CIF to invest in Ukraine

1.    Choosing a legal structure and registration: To establish a corporate investment fund, it is necessary to choose the type and type of corporate fund and register it in Ukraine. 

2.    Choosing an asset management company. It is necessary to choose a licensed company that will support the activities of the corporate investment fund. 

3.    Development of an investment strategy: The fund's strategy should determine which assets will be invested in, what the portfolio structure will be and what risks are acceptable to investors. A corporate investment fund provides its owners with the opportunity to control investment activities to the fullest extent possible and to make key decisions on the fund's investment strategy.

4.    Attracting investors: Once the fund is established, its founders can start attracting investors who wish to invest in the designated assets.

Consequently, Ukraine is a country of great opportunities, especially in such sectors as agribusiness, IT, energy, infrastructure and industry. Investing through a corporate fund is an effective way to invest in the Ukrainian economy, which provides flexibility, protection of investors' interests and the ability to diversify risks. This makes this mechanism attractive to foreign investors.

Provided by itandem.com.ua