The boom of industrial parks in ukraine: how much has been invested and why only 37 out of 100 players accept residents

Recently, the government investment office Ukraine Invest updated the guide "Investment Incentives for Industrial Parks" Meanwhile, the Ministry of Economy released a new catalog of industrial parks (IPs). Mind analyzed these and other studies and presents the most interesting insights.

How many industrial parks are there in Ukraine?

As of January 2025, the 100th "anniversary" industrial park, "Myronivka," was registered in the Kyiv region. According to the industrial park catalog from the Ministry of Economy, the largest number of IPs are located in Lviv (19), Kyiv (13), and Zakarpattia (10) regions.

Source: Catalog of Industrial Parks

Ukraine has experienced several waves of industrial park (IP) registrations. The first boom occurred in 2014, following the adoption of the Law of Ukraine "On Industrial Parks" a year earlier. At that time, the first nine locations appeared in the country.

The second wave took place after the full-scale invasion, when businesses needed to evacuate their production facilities. The government then introduced a significant package of incentives, launched the "Industrial Park Development Strategy for 2023–2030", and later, in 2024, allocated over 1.1 billion UAH to 15 parks. In recent years, 54 IPs have been registered: 9 in 2022, 13 in 2023, and a record 32 in 2024.

"Strangely enough, it was the full-scale war that spurred the rapid development of industrial parks. Before 2022, there were no real incentives, preferences, or state support. Potential residents had no interest in locating within industrial parks. Before the war, we received only a handful of inquiries per year. However, in March 2022 alone, there was a sudden surge of 1,500 potential industrial park residents. These were relocated enterprises that began urgently searching for sites in Western and Central Ukraine," Valerii Kyrylko, CIO of the "Industrial Parks of Ukraine" group of companies, previously explained to Mind.

Who are the participants in the process?

The creation of an industrial park can be initiated by state authorities, municipalities, or landowners/tenants (businesses or individuals) on whose land the park is being developed.

Source: Made in Ukraine" project – Industrial Parks – 2024

To implement the project, a management company is appointed – a legal entity with which an agreement is signed for the creation and operation of the industrial park. The management company then enters into contracts with residents – companies that can operate within the park. These residents are legally divided into two categories: participants and "other entities."

Participants may include enterprises in the processing industry, industrial and household waste processing (excluding waste disposal), alternative energy, energy storage, as well as R&D, telecom, and IT companies.

Other entities refer to companies from business sectors not listed as participants. However, not all types of businesses are allowed: according to the Law of Ukraine "On Industrial Parks," activities such as the production of certain excisable goods, lottery issuance and operations, and gambling-related businesses are prohibited within industrial parks.

Another key difference between participants and "other entities" is that the latter are not eligible for state benefits. So why would they choose to become industrial park residents? Industrial parks offer businesses not only production spaces but also ready-made infrastructure (electricity, gas, and water supply) and a business environment. The concentration of various enterprises within one area creates opportunities for establishing production chains, exchanging experience, and fostering collaboration.

What benefits can be obtained?

According to the latest guide "Investment Incentives for Industrial Parks," the state provides a range of preferences. In particular, IP participants are exempt from:

• corporate income tax for 10 years, provided it is reinvested;
• import duty on the import of new equipment;
• VAT on the import of new machinery.

Initiators and management companies can receive:

• up to 150 million UAH for the development of industrial parks and the construction of engineering and transport infrastructure facilities (roads, communication lines, heating, gas, water, and electricity supply systems, engineering communications, etc.);
• full or partial compensation of interest rates on loans for infrastructure development and business activities within the industrial park;
• exemption from property tax on industrial buildings;
• exemption from land tax and/or a reduced tax rate or lease payment for land;
• exemption from payments for losses in forestry production.

But obtaining up to 150 million UAH in compensation is not so simple. The Ministry of Economy provides the grant under a 50/50 co-financing scheme.

"The managing company or the local community, which is a co-founder of the industrial park, must finance the project on an equal basis. If the Ministry of Economy allocates, say, 100 million UAH, the managing company must invest the same amount. To apply for the grant, a large number of documents must be collected. The project and cost documentation must be approved and independently audited. Then, the Ministry of Economy reviews these documents and allocates the funds 'on paper,' which are then placed in a state bank. The applicant then invests their 50% of the funds and submits completed work reports. The financial institution verifies everything. Only after this is the money from the escrow account in the state bank allowed to be used," explains Oleksandr Bondarenko, managing partner of the Bureau of Investment Programs, in a comment to Mind.

This entire process can take at least six months. According to Bondarenko, the 1.1 billion UAH allocated last year to 15 industrial parks is still sitting in state banks.

How many industrial parks are actually operating?

Not all registered parks currently have residents. According to the industrial parks catalog, only 37 out of 100 parks have secured tenants. In total, there are 54 participants and 31 'other entities' operating within them.

Among them are 12 factories (producing food, household goods, chemicals, construction materials, agricultural processing, woodworking, mechanical engineering, printing, etc.), with 13 more manufacturing facilities set to become operational soon, says Dmytro Kysylevskyi, deputy chairman of the Parliamentary Committee on Economic Development.

However, most parks have only one or two participants. The current record holders in terms of residents are:

• Western Ukrainian Industrial Hub (3 participants, 21 other entities)
• Kalush Industrial HUB (5 participants)

Interestingly, the most 'resilient' parks are the older ones. Five out of the nine industrial parks registered in 2014 currently have residents. Meanwhile, among the nine parks created in 2022, only two have participants. The statistics for 2023 are also unimpressive: only four out of 13 parks found residents. More than half of the 32 new parks registered in 2024 remain empty, with only 14 currently having tenants.

Why do most industrial parks still lack residents?

Some of the non-operational parks are located in temporarily occupied territories or active combat zones. However, many parks remain empty even in western Ukraine.

Currently, most industrial parks are greenfield sites without buildings, electricity, or infrastructure. According to the industrial parks catalog:

• 56 parks lack electricity
• 68 parks have no water supply
• 73 parks have no gas infrastructure
• Most parks have only roads leading to their boundaries

Building the necessary infrastructure requires significant investment.

"Developing an industrial park can cost a managing company or an initiator 20–80 million UAH. No investor will enter an industrial park without developed infrastructure, no matter how many tax benefits you offer," previously explained Oleksandr Bondarenko to Mind.

Additionally, obtaining up to 150 million UAH in state funding faces another major challenge.

"You not only need to collect a full set of documents, but also negotiate with a contractor who will agree to be paid only after completing the work, signing and approving reports, and passing all procedures in the state bank and ministry (months of waiting). No reasonable Ukrainian construction company will accept such conditions for cooperation with managing companies. The only exceptions are developers or construction firms that are also park developers – and there are very few of those," notes Bondarenko.

How much has already been invested in infrastructure?

Not all managing companies have provided this data to the Ministry of Economy. According to the Industrial Parks Catalog, the total value of built infrastructure in 35 parks amounts to 13.844 billion UAH (excluding last year's 1.1 billion UAH from the state). The investment amounts vary across different industrial parks – from 1.2 million UAH to 6.25 billion UAH.

Interestingly, only one out of the three parks with multi-billion infrastructure investments – Kronospan Rivne Industrial Park – currently has a resident.

In Chortkiv West (registered back in 2019), they expect that the future resident, A.V. Export Import, will complete the construction of an oil processing and bottling facility in the second or third quarter of 2025.

Meanwhile, in Chervonohrad Industrial Park (registered in April 2024), construction is underway for the production of food products, furniture, paper, non-metallic mineral products, equipment, motor vehicles, trailers, semi-trailers, woodworking, and more.

In total, since 2014, more than 30.5 billion UAH has been invested in the development of industrial parks, according to the Industrial Parks – 2024 digest. This amount includes not only infrastructure investments but also expenses for building administrative facilities, production sites, and more.

Is quantity turning into quality?

Government incentives are gradually transforming the industrial parks registration boom on paper into real investor engagement on the ground. According to the digest from the Parliamentary Committee on Economic Development, just in January 2025, the construction of three new factories and one logistics center was initiated within industrial parks.

The Lviv-based industrial park "Formacia" signed an agreement for the construction of a factory for the Ukrainian manufacturer of fire trucks and special equipment "Pozhmashina." The factory is planned to be completed within two years.

In "InPark Boryslav," located in the Lviv region, the construction of a furniture factory has begun. The project's investor is the Ukrainian office furniture manufacturer Art Metal Furniture (Dnipro). The production launch is planned by the end of 2025.

In "VinIndustry" (Vinnytsia), negotiations have been held with investors regarding the construction of a machinery plant and a logistics center.

Over 10 years of existence, industrial parks have created about 2,800 jobs. This number is expected to grow rapidly. For example, in the previously mentioned "Chervonohrad" industrial park, plans are in place to establish 3,250 jobs for specialists in the processing industry.

And government support should facilitate the transformation of greenfield sites into fully equipped industrial parks. In 2025, the Ministry of Economy is continuing its compensation program of up to 150 million UAH. The government has once again promised to allocate around 1 billion UAH for this purpose.