Foreign Direct Investment Regime

Ukraine’s legislation embodies the principle of non-discrimination of foreign investment and general provisions on foreign investment protection. Its legal framework provides for national treatment for firms’ establishment, but despite recent efforts to enhance the country’s business environment foreign investors have often been discouraged by complex, protracted and costly procedures and resulting regulatory uncertainty. Ukraine applies several transsectoral and sectoral restrictions on foreign investment which qualify for the list of exceptions to national treatment and measures reported for transparency in the meaning of the OECD Declaration on International Investment and Multinational Enterprises. Taking into account the existing statutory FDI restrictions, Ukraine’s score under the OECD FDI Restrictiveness Index is higher than the OECD members’ average but lower than the average of non-OECD countries covered by the Index. Ukraine’s score considering formal FDI restrictions as captured by the Index contrasts, however, with a poor perception of its investment climate in most international comparisons which assess actual implementation of existing laws and regulations.