Investment nannies will not significantly affect the volume of investments in Ukraine, - said attorney of Skliarenko, Sydorenko and Partners

The Bill on Investment Nanny is useful and necessary. However, increasing the competitiveness of Ukraine in attracting foreign investment requires broader measures, in particular, changes in the tax system.

This opinion was expressed by Timur Mikhailov, a lawyer for Skliarenko, Sydorenko and Partners, in a comment to the LegalHub portal.

The specialized legal resource analyzed the prospects for the implementation of the draft Law dated 01.07.2020 No. 3760 "On state support of investment projects with significant investments", which proposes to introduce an institution of investment nannies in Ukraine. The document was recently supported by the Verkhovna Rada in the first reading.

An investment nanny is a personal manager who will be provided to every investor who has invested at least $ 30 million in the Ukrainian economy and created at least 150 new jobs. They intend to look for such managers among workers in the private sector, in large consulting and law firms that understand what services, clients and consumers are, and also know how to treat them correctly.

“Successful implementation of the initiative will certainly in a certain way reduce the perception of risks among foreign investors. Nevertheless, the presence of this institution is unlikely to radically increase the investment attractiveness” T. Mikhailov is convinced.

He identified several factors that significantly reduce the investment attractiveness of Ukraine. According to the expert, these are military actions, lack of guarantees of property rights, the rule of law that exists only on paper, as well as outdated labor legislation. The risk component remains subjectively more significant for investors. After all, the media write more about war, default, raiding, etc., and not about tax cuts or a successful IPO.

Also T. Mikhailov drew attention not to the fact that the authors of the legislative initiative refer to the experience of Poland, the Czech Republic and Hungary, which today are Ukraine's competitors in attracting investments. “It turns out that the tax systems of these countries compete with ours, and so far the advantage is not on our side,” the lawyer concludes.

Therefore, the expert believes, Ukraine needs to increase its profit component. “The tax system of Ukraine is quite attractive for individuals (here you can recall the single tax), but it has inflated rates for legal entities,” he explains. - Therefore, most companies are forced to distort their reporting in order to reduce the tax burden. The introduction of a tax on withdrawn capital and a reduction in the VAT rate could change this situation. "

“Changing the tax system is excluded for foreign investors will only lead to the emergence of schemes when Ukrainian entrepreneurs or oligarchs will implement fictitious foreign investments to use tax incentives,” warns T. Mikhailov.

A radical increase in the competitiveness of Ukraine in attracting foreign investment can occur if an integrated approach is applied. “We are talking about reducing risks, for example through judicial reform and an investment nanny, and about increasing profitability. At the same time, one should take into account the strategies of competing countries, and not forget about marketing. That is, it is necessary to bring the new competitive advantages of the Ukrainian economy to potential foreign investors" summed up the lawyer of Skliarenko, Sydorenko and Partners.