SPECIAL INVESTMENT REGIME (SIR) in Kharkiv

SPECIAL INVESTMENT REGIME (SIR)

Brief Guide for Entrepreneurs Considering the Kharkiv SIR


	In 2000, the City succeeded in introducing a Special Investment Regime (SIR) within city limits. Certainly, SIR primarily targets rather big business undertakings. However, the boost to the Kharkiv economy thanks to enlivening of investment activities has its beneficial effect both on small and medium-sized businesses.
	It is planned to set up a city marketing center, which will be providing assistance to manufacturing companies. Also, a possibility is being considered to establish a collateral fund based on communal property to serve as security for attracting investments and loans for city projects. This has a significant potential of increasing city's investment attractiveness.

	Why SIR?
	The Special Investment Regime is designed so as not to harm the city budget and, at the same time, improve the city business climate. Therefore, benefits are granted not to the whole company but rather to individual projects, which provide for investments, creation of new jobs, etc. Any new project, which falls within the priorities approved by the government (nearly all types of activities) could qualify for SIR. Following appropriate approvals, the project is to be endorsed by the Investment Board.

	What benefits are offered?
	Foreign investments are granted exemption from import duty and import VAT for five years. Profits are tax exempt for three years and levied at a halved rate for another three years. Attracted investments are exempt from gross revenues. The project is exempt from land tax for the period of site development.

	What is the minimum investment amount?
	$500,000 in food industry and processing of agricultural produce, textile and garment industries, manufacture of leather goods and leather footwear, education, health care, social aid, R&D in natural and engineering sciences;
	$700,000 in construction, sewer, street cleaning and waste collection and utilization, chemical plants, furniture making, paper-and-pulp and printing industries;
	$1 million in power generation, production of gas and water, coke, other non-metal mineral substances, transport and telecommunications, recycling of metal scrap;
	$3 million in metallurgy and metal working, machine building, manufacture of electric, electronic, and transport equipment.

	Who makes decisions?
	SIR is guided and directed by Investment Board whose membership include governor, mayor, other regional and city officials, head of regional tax administration, people's deputies, and representatives of business associations. The Board considers a project at the final phase and makes the final decision. All day-to-day work is conducted by the Board Secretariat.

	Where could more detailed information be obtained?
	Law of Ukraine "On Special Regime of Investment Activities in the Territory of the City of Kharkiv"
	All necessary information is provided in soft copy by the Board Secretariat free of charge to any interested party. Telephone for inquiries: +380 572 128250.
	You can get a complete set of documents here: spez_invest.zip (110Kb)