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Particular Transcarpathian Investment Incentives

The remarkable increase of foreign investments in Transcarpathia can be attributed to special incentives offered exclusively in Transcarpathia and regulated by the two following documents, namely the Law of Ukraine "On the special investment regime in Transcarpathian (Zakarpattya) region" and Decree of the President of Ukraine "On the Special Economic Zone " Transcarpathia".

It is worth to mention that 47 agreements on the realisation of investments projects for the total amount about 190 mln USD (September, 2000) were concluded beginning from the introduction of the special investment regime (December, 1998). Nowadays about 16% of the total volume of agreements value is already used. The majority of investments were done as equipment (84%) and raw-materials (12.7%).

18 new companies will be established and 29 existing ones will be renovated and modernised for the realisation of investment projects within these special regimes.

Foreign investors should take into account that local authorities may regulate certain issues relating to investment projects - e.g. the workers salary cannot be less than 80 USD, company's profitability should be on the level of 10-15%, great attention is paid to the employment of local population, meeting ecological requirements etc. For the elaboration of high quality projects which are meeting all requirements of Ukrainian legislation and local authorities it is worth to consult with agencies professionally providing these services.

The countries which most actively use favourable incentive opportunities in Transcarpathia are Hungary, Austria, Germany, USA, Slovakia.

The most attractive industries for foreign investors (within the special regimes) are wood-processing, food and light industries.

There is a lot of discussions concerning the expediency of the operations of Special Economic Zones of different kinds in general and practicability and perspectives of the operation of SEZ "Zakarpattya" particularly.

It is worth to mention that although the real operation of the zone started only few months ago there are certain results of it. In Ukraine SEZ "Zakarpattya" is being considered as one of the most active and perspective that is why -despite the IMF present demands concerning the restriction of different kinds of incentives for companies (including special economic zones regimes) - there is the great chance that SEZ "Zakarpattya" will be one from several which still will have the right to provide incentives.

Now already 4 agreements (3 really operating) are concluded and several are being elaborated for the implementation within SEZ "Zakarpattya".

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