Ukraine will make investment abroad easier after the Association Agreement (AA) comes into force. Now there is a lot of red tape for Ukrainian companies to get licenses for investment abroad, and investors often use wildcat schemes to transfer their money to other countries. The AA makes provision for free movement of capital related to foreign direct investment between Ukraine and the EU. In addition, Ukraine may eliminate the obligation of Ukrainian exporters to sell foreign currency earnings if those earnings originate from the EU. The changes will increase transparency of capital flows and provide incentives to authorities to improve business climate in order to prevent capital flight.
The above material is a part of a series of short informational materials, developed by the Institute for Economic Research and Policy Consulting (IER), about the potential impact of implementation of the AA on the Ukrainian economy. The purpose of the publication is to explain the content of the AA, because a number of comments on the topic have emerged recently, but their authors have often described the content of the agreement incorrectly.
