Clause 18 of the Law of Ukraine "On the Regime of Foreign Investments" provides that the property imported to Ukraine as contribution of the foreign investor to the authorized capital of a corporate entity with foreign investment (except for the goods for sale or personal consumption) shall be exempt from the customs duty.

Customs bodies shall permit entry of such property onto the territory of Ukraine on the grounds of a promissory note issued by such corporate entity for the amount of duty with a postponement of payment for a period of no more than 30 calendar days from the date of issue of the import customs declaration.

The note is redeemed and import duty is not imposed if within the postponed period of payment aforementioned property is included to the balance sheet of the corporate entity and tax inspection at the place of the registration of the corporate entity have made appropriate mark about this at the note.

Procedure of issuing, discounting and redeeming the promissory notes is determined by the Cabinet of Ministers of Ukraine.

If during three-year period from the moment of inclusion of the foreign investment into the balance sheet of the corporate entity with foreign the investments are alienated in any manner (except for the cases of redemption of the foreign investment abroad), the corporate entity with foreign investments is to pay the import duty calculated on the grounds of the customs value of the property converted into the national currency of Ukraine using the official exchange rate set by the National Bank of Ukraine at the day of alienation of such property.

Clause 19 of the Law of Ukraine "On the Regime of Foreign Investments" provides that the corporate entity with foreign investments solely determines terms and conditions of selling its production (works, services), including price of the same unless other rule is stipulated by Ukrainian legislation in force.

Production of corporate entities with foreign investments is not subject for licensing and quotation on the condition that such production was certified as the production manufactured by such corporate entity in accordance with procedure defined by the Cabinet of Ministers of Ukraine.

Clause 20 the Law of Ukraine "On the Regime of Foreign Investments" provides that the corporate entities with foreign investments are taxed in accordance with Ukrainian legislation in force. Earlier the above law together with other Ukrainian regulations has provided foreign investors with special tax preferences, but later on the law was amended as far as such preferences were discriminative in relation to the Ukrainian corporate entities and private persons.  Also should be noticed that Ukraine has rather big network of double tax treaties with numerous countries of the World.

Clause 21 of the Law of Ukraine "On the Regime of Foreign Investments" provides that protection and execution of rights of the intellectual property by the corporate entities with foreign investments are secured according to the Ukrainian legislation in force. Corporate entities with foreign investments solely and independently make decisions on foreign patenting (registration) of the inventions, industrial samples, trademarks and other intellectual property objects, which belong to them in accordance with Ukrainian legislation in force.

Investment relations implemented on the grounds of contract of the investment nature are regulated by the V section of the Law of Ukraine "On the Regime of Foreign Investments", namely by clauses 22 to 24 of the same.

Thus, clause 22 of the Law of Ukraine "On the Regime of Foreign Investments" provides that assignment of rights to the foreign investors as to mining and development of the renewable and nonrenewable natural resources, carrying out economic activity connected with use of the state owned items or municipal items can be made on the grounds of concession contracts (agreements).

Clause 23 of the Law of Ukraine "On the Regime of Foreign Investments" provides that the foreign investors have the right to make agreements (contracts) for the joint investment activity (production cooperation, joint production, etc.), which are not connected with establishment of a corporate entity in Ukraine.

Clause 24 of the Law of Ukraine "On the Regime of Foreign Investments" provides that the parties of such agreements (contracts) should keep separate accounting and draw up reports on operations connected with fulfillment of terms and conditions of such agreements (contracts) as well as open separate accounts in bank institutions of Ukraine in order to effect payments under these agreements (contracts).

Such contracts (agreements) of the investment nature are to be duly registered in accordance with Ukrainian legislation in force.

Property (except for goods for sale or consumption by such corporate entity), which was imported to Ukraine by the foreign investor with purpose of investment for not less than 3 years under the registered agreement (contract) is exempted from customs duty according to the procedure stipulated by clause 18 of this Law.

The above information is provided herein in educational and informative purposes only. It is provided that you have to get appropriate legal advice as regarding the legal and other issues of your interest in Ukraine in order to have the exact, extensive and up-to-date legal and other related information.

Do not hesitate to contact us if you have any questions or issues of legal nature, our Law Firm is working for you and our experienced legal specialists are always ready to help providing the client with appropriate legal consultations, legal reports and summaries, reasonable legal advices and all the other required legal support, assistance, coverage and protection.