OECD Investment Policy Reviews: Ukraine 2011

This review looks at the Ukraine and examines countries’ investment policies and reflects the OECD’s mission to help governments enhance their investment climate through peer learning and the sharing of best practices.

Based on the OECD Policy Framework for Investment, the Review considers the interaction and coherence of investment policy with other areas such as investment facilitation, trade and competition policy as well as responsible business conduct practices critical for enhancing the investment climate.

The Review shows that Ukraine has made progress in developing a legal framework for attracting foreign direct investment (FDI), but implementation problems continue to affect domestic and foreign investors alike and prevent the country from mobilising private investment commensurate with its economic potential and investment needs.

Table of Contents
Executive Summary and Policy Recommendations
Chapter 1. Ukraine’s Opening to International Investment
After peaking in 2008, FDI inflows halved in 2009
before recovering somewhat in 2010
Since 2005, the inward FDI stock has increased
Foreign investors target mainly financial services and manufacturing
More than two thirds of Ukraine’s FDI come from EU countries
Participation of foreign investors in the privatisation process has been uneven
New reform programme sets ambitious privatisation goals and stresses the role of FDI
Notes
Bibliography
Chapter 2. Foreign Direct Investment Regime
Guarantees for protection of foreign investment but registration required
After temporary derogations, the non-discrimination principle has been reinstated
Complex establishment procedures
Recent initiatives to streamline establishment procedures
Licensing procedures
Efforts to reduce the administrative burden have to be pursued
Employing foreigners
Foreign exchange regulations
National security considerations and “strategic sectors”
Persistent problems with ownership registration for land and other forms of property
Economic activities subject to mandatory licensing under general legislation
Sector-specific regimes
Monopolies
New developments in legislation on concessions
Foreign investors enjoy non-discriminatory access to government
procurement but problems remain
OECD FDI Restrictiveness Index of Ukraine
Notes
Bibliography
Chapter 3. Ukraine Policy Framework for Investment
1. Investment policy
2. Investment promotion and facilitation
3. Trade policy
4. Competition policy
5. Policies promoting responsible business conduct
6. Infrastructure and financial sector development
Notes
Bibliography
Chapter 4. Investment in Support of Energy Efficiency
Overview
1. Energy profile of Ukraine
2. The government’s energy strategy and future energy investment requirements
3. Main reform challenges
4. From energy efficiency towards the development of environment-friendly energy resources
Notes
Bibliography
Annex A. Ukraine’s Exceptions to National Treatment in the Meaning of the OECD Declaration on International Investment and Multinational Enterprises
Annex B. Statistical Annex
Annex C. Bilateral Investment Treaties Concluded by Ukraine
Annex D. Adherence of Ukraine to International Agreements and Conventions