Factors and obstacles
of foreign direct investment inflows
into the economy of Ukraine
By Pavlyna Kulish
Scientific supervisor  Doctor of Economics, Professor Zadoia A. A.
Language consultant  Candidate of Science, Lecturer Kramarenko T.V.
Table of contents
1. Theoretical and methodological approaches of the international
capital flows research.
2. The condition and prospects of foreign direct investment inflow
development in Ukraine.
3. The ways of foreign direct investment inflow increase into the
economy of Dnipropetrovsk region.
4. The conditions of labour protection and safety in emergency
situations in the workplace of an expert on international
economics.
Factors and obstacles
of foreign direct investment inflows into the
economy of Ukraine
• The purpose of the diploma work is to examine the factors and
obstacles of FDI inflows into the economy of Ukraine taking
Dnipropetrovsk region as an example and to devise the guidelines of
FDI inflow increase.
• The object of the investigation is the process of FDI attraction into the
economy of Ukraine on the whole and into the economy of
Dnipropetrovsk region in particular.
• The subject of the investigation is the scope of FDI inflow into Ukraine
from the point of view of industrial and regional structure; as well as
factors and obstacles of FDI inflow into the economy of Dnipropetrovsk
region and the possible ways of involved capital increase.
Factors and obstacles
of foreign direct investment inflows into the
economy of Ukraine
• Foreign direct investment is a long-term international investment, placed by
foreign investors in foreign assets in different sectors of the economy for the
purpose of production development, social services, business and future profits.
• The country or region investment climate is the totality of political, social,
economic, financial, cultural, legal and geographic factors, which are,
simultaneously, the combination of investment attractiveness and investment
activities and which form the effective demand for investment.
• The factors which form the country’s investment climate:
the political background, the legal environment, macroeconomic factors, the tax
system, the regulatory impact.
Factors and obstacles
of foreign direct investment inflows into the
economy of Ukraine
Fig. 1. The volume of global FDI between 1993 and 2013
Fig. 3. The dynamics of the index of investment attractiveness of Ukraine
Fig. 2. FDI in Ukraine for the period from 2005 to 2013
FDI into the economy of Ukraine dating to 04/01/2013 (percentage)
The most “generous”
investors
• Cyprus (32.7%)
• Germany (10.8%)
• the Netherlands
(9.6%)
• Russia (7.4%)
• Austria (5.6 %)
• United Kingdom
(4.7%)
• Virgin Islands (4%)
The most investmentattractive branches
The most investment
attractive regions
• industry (31.5%)
• finance (29.6%)
• real estate, renting
and business
activities (16.6 %)
• trade, motor vehicles
service and
household goods for
personal use (11%)
• Kyiv (57%)
• Dnipropetrovsk
region (18%)
• Donetsk region (6%)
• Kharkiv region (5%)
• Kiev region (4%)
• Lviv region (4%)
• Odessa region (3%)
A significant imbalance in international investment attractiveness by sectors
A similar disparity in attracting foreign investment in the regions
Priority investment attraction
Dnipropetrovsk region
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Strengths
The favourable geographical lacation
Substantial mineral resources
Proximity to raw materials
Favourable climate for farming
Developed industry (mining and
metallurgical industry, coal, engineering,
space)
Availability of high-skilled labor force
Opportunities
The presence of domestic demand
Implementation of international
cooperation programs
Adoption of new legislation
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Weaknesses
Significant level of wear and tear and
municipal infrastructure
Deficiency of available financial resources
Low diversification, high dependence of
region’s economy on heavy industry
Low level of implementation of IT
technologies
Outdated technology, low economical
innovation
Threats
“Export-oriented activity” of all region
The growth of the shadow economy
The outflow of people
Lack of scientific potential support programs
Increase in the cost of energy resources
The ways of FDI inflow increase
into the economy of Dnipropetrovsk region
To use attracted foreign direct investment as a source of
financing already existing industrial park in Dnipropetrovsk
“Mashinobudіvnі texnologії (the example of the industrial
park functioning in Kharkiv).
To pay more attention to the brand of Dnipropetrovsk region
(the experience of Lviv).
To create in a unified permitting center in Dnipropetrovsk
region (the project of Kharkiv «Edine vіkno»).
The ways of FDI inflow increase
into the economy of Dnipropetrovsk region
The imposition of preferential tax treatment for long-term
lease of land in Dnipropetrovsk region for foreign investors:
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1 hectare, 1 mil. UAH, 10% land tax rate
initial contributions ― 100 000 UAH
50% discount  50 000 UAH (local budget deficiency per year)
15 % ( payroll fund)  333 000 UAH (per year)  27 800 (per
month)
• 8 people  3 000 UAH
 A creation of specialized electronic resource, which would
contain all the necessary information about the possibilities of
FDI in Dnipropetrovsk region.
THANK YOU
FOR YOUR ATTENTION