Курсовая работа (т): Problems in creating a favorable investment climate in Ukraine

Ø  Soft drinks industry - “Coca-Cola”, “Pepsi”, “Orangina Group”;

Ø  processing of oilseeds and grains - “Bunge” (redemption of elevators, control of grain);

Ø  milk processing - TNC “Groupe lactalis”, “Bel Group”, “Danone” (France); “Unimilk” (Russia);

Ø  confectionery production - TNC “Nestle” (“Svitoch”, “Craft Foods”, “Corona”);

Ø  production of household chemicals and perfumes - TNC Procter&Gamble (USA).above companies have built or bought specific production capacities, started to act as a part of Ukrainian regional households. They act with local companies (provisors of raw materials), have an aggressive advertisement and eliminate internal competitors.order to successfully compete with other countries in attracting foreign investment, you must first determine what the strengths and weaknesses of the investment climate in Ukraine exist.do this, it is advisable to use a SWOT-analysis - the method to identify the factors of internal and external environment, which in this case may affect the investment attractiveness of Ukraine.I have made the analysis to understand weak and strong sides of Ukrainian investment climate for TNCs. I suppose that this analysis can help to understand what problems do we have and in what way we should move to increase the attraction of our state for huge companies, foreign investors and so on.

2.2. Factors of the investment climate for the development of TNC in Ukraine

, as we can see in the table, despite the fact that our state has very huge potential we can’t realize it, due to some factors. Today in our country there is the problem of inadequate use of investment potential, which is associated with political instability, excessive state intervention in the regulation of foreign investments, constant changes in the current legislation, the large number of "gray incomes".direct investment for us will only have positive effects. With foreign investment creates the opportunity to modernize production base, job creation, development of important sectors of the economy and so on. Thus, we save the national budget that can be spent on any other important sectors of the economy, social security.

2.2 Ways of improving the mechanism of attracting foreign investment in Ukraine

Ukraine has a large consumer market. In terms of industrial production Ukraine takes one of the leading places in the world, including ore mining and steel production. Promising are ferrous and nonferrous metals, which make up almost a quarter of all industrial production, mechanical engineering, chemical and petrochemical industry, light industry.Technical Complex Ukraine in scope and potential is one of the largest in Europe and second after Russia among CIS countries. The country has the status of nuclear and space power., to convert these favorable factors in the advantages of Ukraine in the creation of high investment attractiveness of the state, primarily the implementation of necessary measures., to stimulate investment provides:

Ø  reduce state regulation of business and ensure the stability of relevant legislation;

Ø  eliminate ambiguity interpretation of regulations and complete judicial reform;

Ø  improve the regulatory framework for property rights;

Ø  complete administrative reform, to ensure publicity and transparency in decision-making bodies and eventually overcome bureaucracy and corruption;

Ø  to establish effective corporate governance;

Ø  promote the sophistication of capital markets, especially banking, securities and insurance markets;

Ø  reduce the tax burden and provide stable political environment;

Ø  step up efforts to establish a positive image of the state.the main objectives, I should mention such as:

Ø  liberalization of business activity;

Ø  creating an attractive investment environment;

Ø  completion of a stable regulatory framework which would be based on the principles of equality of all investors;

Ø  improving the efficiency of bankruptcy procedures;

Ø  increase the investment attractiveness of privatization.these goals will contribute to:

Ø  establishment of joint investment institutions;

Ø  development of non-bank financial institutions;

Ø  creation of workplaces.effectively attract quality investments required permanent coordination of foreign investors. But this is not enough to achieve the necessary level of investment in the economy, to attract strategic investors. For these purposes in host countries, special organizations, agencies are made. Their work is that in different countries of strategic importance for the host country, placed special bodies. The general direction of the main body is set, located in the host country. Thus, a network of specialized institutions can be created, whose main task - finding and attracting strategic investors.main advantage of this method of active strategies to attract FDI is to have direct contact with possible investors. There are a number of studies on the effectiveness of such activities. Currently in Ukraine there is no single body regulating the activities of foreign investors - one of the main points, which will attract foreign investors and increase foreign direct investment.

An important tool of state regulation of foreign investments in Ukraine is a tax system. In this sphere we should intensify work to make the tax rules according to international standards. It is necessary to complete the first stage of the reform of the tax system by reducing the number of taxes and simplifying tax legislation, ensuring its stability, significantly reduce the tax burden on producers and introduce a tax to encourage investment.should expand the scope of fixed taxes and eventually transfer tax entrepreneurs at a single fixed tax.important step in the activation of foreign investment in Ukraine's economy will be the introduction of effective mechanisms of privatization of strategic foreign investors, which primarily include transnational companies (such as the US, Germany, South Korea, etc.).TNCs are aimed at the widest possible use of a powerful resource potential and achieve profit from investment in Ukraine by adjustment of own production, dealer network and exports. These companies tend to enter into agreement with state authorities for a specified period of exploration and extraction of natural resources. For such investors the most important fact is political and social stability in the country, clearly defined their powers. These companies are sometimes willing to go to considerable costs for the future promotion of the market in case of improved investment climate.FDI through privatization as convincing international experience, is one of the most common and effective forms of foreign investment.majority of domestic firms after the selection of foreign direct investment becomes more competitive; asset sales to foreigners makes immediate cash flow and ultimately leading to further investment, reinvestment of profits and so on.prospects in the deployment of investment, including foreign investors, has leasing operations.offers several advantages over other types of investments. Leasing allows to provide efficiency and flexibility in solving production problems through the use of temporary facilities and not purchase the whole property. Leasing also provides access to the most advanced technologies. According to international experience, is accelerating the pace of scientific progress is initiating a rapid development of leasing.the development of this kind of investment necessary to create a network of leasing companies and specialized funds.important step towards to collective infrastructure investments are becoming private pension and mutual funds, which will involve public funds. These funds have to become an effective instrument for collective investment in priority sectors of the economy.is also opening offices in Ukraine of first class foreign banks, the establishment of commercial banks with foreign capital and private investment banks.the investment climate in Ukraine is largely driven by the creation of a reliable system of insurance against the risks of foreign direct investment, which today is sometimes difficult to predict. For this goal law regulations of such risks should be done.of the most promising foreign capital in Ukraine should be a network deployment of investment funds and companies. In this context, great importance is the flow of venture capital. Venture capital associated with financing innovations and scientific progress. It is different from other sources of funding by three elements: investment usually takes the form of participation in the authorized capital of the company; investment is long-term; investors are active in the company, which they finance.main sectors in Ukraine that need investments more than others are agriculture, energy, transport and communications. This capital required for the implementation of scientific and technological developments of Ukrainian scientists and designers.also should strengthen legal guarantees for foreign investors. Without that, it would be hard for Ukraine to compete even with their closest neighbors in the former Soviet Union to attract foreign investment.attract large-scale foreign investment in Ukrainian economy in the form of venture capital we should do a lot of work.starting point of state regulation of foreign investment is to determine regulatory purposes. The general objectives of state regulation of foreign investment are:

Ø  procedures to grant favorable investment climate;

Ø  intensification of foreign investment.

CONCLUSIONS

theme of this term paper, which is devoted to research investment climate in Ukraine, is very actual.the course of the research we concluded:

.        Under the investment climate they usually mean state of the legal, financial, socio-economic and socio-political environment within the country, which leads to a particular degree of attractiveness for investment.

.        Nowadays, scientists, experts, academics give negative assessment of the investment climate in Ukraine. This requires a deep scientific study of the investment climate, develop and implement a number of measures to improve it.

.        The investment climate in Ukraine today are still insufficient, and therefore control the investment process in the country is extremely difficult.

.        Flow of investment processes, their character, intensity and effectiveness, as well as management depends on the investment climate formed in the country.

.        Foreign investment - it values invested by foreign investors into objects of investment activity according to the legislation of Ukraine for profit or achieving social effect. Foreign investments are made in the form of direct and portfolio investment. The main forms of foreign direct investment is the establishment of the enterprise or its structural unit; purchase of shares; reinvest profits from foreign investment in the recipient country; inter-corporation transfer of capital.

.        The basis of motivation of foreign investors for the placement of capital abroad are: comparatively lower costs (labor costs, especially the tax system, subsidies, quality of infrastructure, including financial markets); the possibility of sales (local market characteristics, including its growth potential, international openness); the culture, language, political risk in the country. The effects of foreign investment in the country should be considered in terms of positive and negative effects. By means of minimizing the negative impact of foreign investment is economic regulators of national policy., the investment climate is unfavorable for Ukraine to encourage foreign investors to invest their financial resources in the national economy. Therefore, to improve the investment attractiveness of Ukraine in this work were suggested measures to improve the tax climate and reform of tax incentives. They should provide incentives modernization of funds, implementation of new technologies and increased investment in innovative projects and support small business investment activity. An important area of work in the context of improving the favorable tax climate for business is to continue to simplify the tax reporting and accounting, as well as reduce the tax burden on the business sector.can conclude that the state investment policy must constantly respond to the economic state of the environment, continuously adapting to the changes not only in the country but also around the world. Particular attention should be given to the stability, predictability and transparency of the economy.direct investment for us will only have positive effects. With foreign investment creates the opportunity to modernize production base, job creation, development of important sectors of the economy and so on. Thus, we save the national budget that can be spent on any other important sectors of the economy, social security., main sectors in Ukraine that need investments more than others are agriculture, energy, transport and communications.all the staff which is mentioned above we can achieve the goal which is in making investment climate of Ukraine more favorable.

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