Hot Issue (#07-08 July-August 2016)

Facilitating Investment into the Ukrainian Economy

Olena O. Vardamatska

Asober-minded lawyer finds it strange to see different treatment towards identical investments of foreign origin. Let's imagine for a second that hypothetically Mr. Petrenko, as a Ukrainian founder of LLC Theone with UAH 100,000 in charter capital, would not only have to contribute the money into the charter capital of LLC Theone, but also to apply for registration of his domestic investment. Otherwise, his contribution would be discriminated vis-à-vis the same contribution made by the co-founder of LLCTheone, Mr.Sydorenko. It could be concluded that the situation lacks common sense. However, no matter how absurd it may seem, that has been the case for foreign investors coming to Ukraine since 1996. Dr. Freund, who has registered his investment into Ukrainian assets could enjoy all the privileges of the status allowed for a foreign investment, while Mr. Fellici with non-registered foreign investments was abandoned on its own to face the tricky Ukrainian business environment without even those few practical benefits available to Dr. Freund. Registration of foreign investments was one of the numerous unnecessary exercises performed by state officials and yielding no actual benefit to anyone.

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