as of September 2, 2024:

Status and Prospects of Ukraine's Cooperation with the Socialist Republic of Vietnam in the Agricultural and Food Security Sectors

Ukraine and Vietnam have a long-standing history of trade and economic relations, particularly in the agricultural sector, which plays a vital role in the cooperation between the two countries. Ukraine, as one of the world's leading exporters of grains, oilseeds, meat, and dairy products, views Vietnam as a promising market for its goods. Conversely, Vietnam is one of the largest importers of agricultural products in Southeast Asia, providing favorable conditions for strengthening this partnership.

State of Vietnam's Agricultural Sector:

Agriculture in Vietnam remains a fundamental component of the country's economy, despite active industrialization and modernization processes. In 2023, this sector continued to be a mainstay of the national economy. Approximately 65% of the population lives in rural areas, and over 25% of the total workforce is employed in agriculture, forestry, and fisheries.

In 2023, Vietnam's agriculture grew by 3.88%, the highest rate in the past five years, surpassing even pre-pandemic levels in 2019 (2.67%). Agriculture, forestry, and fisheries significantly outpaced other sectors, such as services, which grew by only 2.01% in 2020 and 1.57% in 2021. This indicates that, amid economic challenges, including the COVID-19 pandemic, the agricultural sector has become a reliable source of employment and economic stability for Vietnam.

In 2023, Vietnam sold 10.3 million forest carbon credits for the first time, generating revenue of 1,200 billion VND. Vietnam also succeeded in producing and exporting a vaccine against African swine fever, showcasing the innovative potential of its agricultural sector.

Despite these achievements, the agricultural sector faces several challenges. Climate changes, such as sea-level rise and soil salinization, pose severe threats to agriculture, especially in the Mekong Delta, one of the country's primary agricultural regions. Vietnam also needs to modernize its agricultural sector, improve labor productivity, and enhance education levels among rural workers.

In 2024, Vietnam aims to maintain GDP growth in the agricultural sector at 3-3.5%, achieve total agricultural exports of 54-55 billion USD, and ensure that 80% of communes meet new rural standards. The development strategy includes increasing transparency, responsibility, and sustainability in the agricultural sector, promoting ecological farming, modernizing farms, and implementing a circular economy.

Exports:

Vietnam's agriculture has significant export potential. In 2023, agricultural exports amounted to at least 53 billion USD, with eight major agricultural products reaching export volumes of over 1 billion USD each. Notably, fruit and vegetable exports increased by 65.9%, reaching a record level of 5.574 billion USD, with China being the primary market, accounting for nearly two-thirds of the total. Rice exports also showed significant results, reaching an all-time high of 4.816 billion USD.

In the first seven months of 2024, Vietnam exported the following products:

• Fish and fish products – 5.3 billion USD
• Fruits and vegetables – 3.9 billion USD
• Coffee – 3.6 billion USD
• Rice – 3.3 billion USD
• Cashew nuts – 2.4 billion USD

Other top 10 export items in the agricultural sector during this period included pepper, cassava, animal feed, and fertilizers.

Imports:

The import structure of Vietnam's agricultural products indicates significant opportunities for Ukrainian exporters to expand trade, as most products imported by Vietnam are strong export positions for Ukraine. However, it is important to note that without a Free Trade Agreement, Ukrainian goods have less competitive pricing.

In the first seven months of 2024, Vietnam imported the following products:

• Animal feed and feed ingredients – 2.9 billion USD
• Nuts – 2.2 billion USD
• Fish and fish products – 1.44 billion USD
• Corn – 1.43 billion USD
• Fruits and vegetables – 1.2 billion USD
• Fertilizers – 980 million USD
• Wheat – 955 million USD

Status of Cooperation between Ukraine and the Socialist Republic of Vietnam:

In the first seven months of 2024, the trade volume of agricultural products between Ukraine and Vietnam grew significantly. According to the State Customs Service of Ukraine, Ukrainian agricultural exports to Vietnam amounted to over 123 million USD, nearly double compared to Ukraine's total exports to Vietnam in 2023. The main export item from Ukraine was wheat—99.3 million USD, accounting for 75% of Ukraine's total exports to Vietnam. Ukraine also exported corn and meal worth 21 million USD and 3.1 million USD, respectively.

Meanwhile, in the first seven months of 2024, Vietnam exported agricultural products to Ukraine worth about 50 million USD. The main exports included seafood, fish, and fish products worth 13.4 million USD, coffee worth 12.9 million USD, and rice worth 7.1 million USD. Other export products included nuts, tea, spices, fruits, and vegetables.

Barriers to Expanding Cooperation in the Agricultural Sector:

• Lack of Preferential Trade Conditions: 

Given that Vietnam has signed 16 free trade agreements with its major trading partners, Ukrainian agricultural products face high competition in this market. Negotiations on a Free Trade Agreement between Ukraine and Vietnam, initiated in the late 20th century, are currently on hold.

• Limited Market Access:

Ukraine is actively working on opening the market for the export of pork, poultry, eggs, apples, and blueberries. Additionally, two draft agreements on cooperation in the fields of phytosanitary and veterinary issues are under consideration by the Vietnamese side.

•   Distance Between Countries: 

High logistics costs to and from Ukraine encourage Vietnamese entrepreneurs to seek partners from closer countries or those with more stable and accessible logistics routes.

• Low Activity of Ukrainian Enterprises:

Ukrainian enterprises show limited interest in the Vietnamese market and do not participate in exhibition and fair events.

Food Security:

Over the past three decades, Vietnam has made significant improvements in nutrition, but reducing the level of malnutrition remains an important public health issue. There are significant differences in dietary habits and consumption patterns between populations in mountainous, urban, and rural areas, as well as among different ethnic groups. Among children under five, the rate of malnutrition is 20.2%, and stunted growth is 35.8%. Rice is the staple of the diet, making it essential to diversify the diet to ensure more balanced nutrition.

At the same time, Vietnam has made significant progress in ensuring food security, transforming from a food importer into a country capable of guaranteeing food stability. For instance, this year, the country plans to produce 43 million tons of unmilled rice, with 7.5 million tons to be exported, contributing to global food security. Given the food crises in other countries, the Vietnamese government has directed the agricultural sector to expand rice crops and adapt to climate changes.

Besides rice, Vietnam shows stable growth in the production of other products, such as vegetables, meat, milk, and fish. Annual production of 19 million tons of vegetables, 7.6 million tons of meat, and 9 million tons of aquatic products helps the country ensure food security at the national level. To further strengthen the food system, the government has developed a National Action Plan until 2030, aimed at developing a transparent, responsible, and sustainable food system that takes into account climate changes and market demands.

Cooperation between Ukraine and Vietnam in the field of food security holds significant potential. Ukraine can share its experience in grain cultivation, modern seed pre-treatment technologies, and soil conservation, which will help improve the yield and quality of agricultural products in Vietnam. Joint projects on agricultural infrastructure development, the implementation of innovative farming methods, and the exchange of scientific knowledge can significantly enhance food security in both countries and contribute to their economic growth.

 https://www.me.gov.ua/Documents/Detail?lang=uk-UA&id=8171a95f-eda9-488b-b9d0-762db402ca11&title=PerelikZakhodivVistavkovoiarmarkovoiDiialnostiVUkrainiU2021-Rotsi

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Investment Passport of Lviv Region

Investment Passport of the city Kryvyi Rih

The Ukrainian Civil Code (No. 435-IV, dated January 16, 2003, effective January 1, 2004) and Economic Code (No. 436-IV, dated January 16, 2003, effective January 1, 2004) in combination provide for virtually any type of companies. Despite the dazzling range of business structures offered under Ukrainian law, foreign investors typically choose one of the following four alternative business structures:

· representative office (which is not a legal entity, and can be either commercial or non-commercial);

· wholly-owned foreign subsidiary or enterprise (usually with limited liability provided in the founding documents);

· "joint ventures" — companies with foreign participation (either in the form of a closed stock company or a limited liability company); or agreements on joint cooperation and production, which do not require registration of a separate legal entity, including toll manufacturing or production outsourcing agreements.

Resident vs. Non-resident Status

One significant consideration in selecting the appropriate business structure involves Ukrainian foreign currency legislation, which categorizes the above structures as either non-residents or residents, depending on the type of activities carried out.

Non-commercial representative offices are "non-residents" under currency regulations and tax legislation, while commercial representative offices, subsidiaries and joint ventures are classified as "residents" because they are legal entities, registered and residing in Ukraine for more than 183 days per year. While the distinction is not clearly expressed in other laws, it is significant in terms of tax consequences and the ability of foreign businessmen to effectuate transactions in foreign or Ukrainian currency.

Both subsidiaries and joint ventures have the status of separate corporate entities and, thus, both limit an investor's liability to its initial investment. As Ukrainian corporate entities, joint ventures and subsidiaries are considered to be "residents" under Ukrainian currency regulations and they are subject to a different financial regime than "non-residents" (such as representative offices). For instance, resident companies may only transact business in Ukrainian currency.

Representative Offices

By definition, a representative office of a foreign company is not a separate legal entity, but is viewed as an "arm" of a non-resident company. As such, a representative office is not incorporated under Ukrainian law. A representative office simply represents the interests of a foreign legal entity on Ukrainian territory and, consequently, there is flow-through liability for the parent company.

Another consequence: representative offices that are accorded "non-resident" status under the Ukrainian taxation system are subject to a special financial regime under tax laws and currency regulations. Foreign companies initially prefer to register their presence as non

resident representative offices, particularly in case of import-export activities or simple research of the market opportunities and conditions.

The key function of such non-resident representative offices is to service existing contracts between the non-resident company and a local customer, but not to engage in commercial activities on its own behalf. Engaging in the so-called "commercial activities" (executing contracts in its own name, accepting payment for goods, etc.) may result in a representative office's re-classification as a "resident," thereby being taxed based on local revenues derived from its activity in Ukraine.

Moreover, the Ukrainian corporate tax legislation places non-residents into two categories: those which effectuate profit-generating activities in Ukraine (a) through a permanent representative office (active), or (b) without a permanent office (passive). Different tax rates and payment procedures attach to each category. This significant distinction is aimed at closing the loophole by which non-resident representative offices circumvented currency regulations and paid lower (if any) taxes in Ukraine on activities typically performed by resident companies.

Residents: Joint Stock and Limited Liability Companies

Wholly-owned foreign subsidiaries and joint ventures usually take the form of either closed joint stock companies or limited liability companies, depending on the particular requirements of the project. Both structures are considered to be "residents" under the Ukrainian currency regulations and tax laws, and both have the corporate shield, limiting the liability of founders or shareholders to the value of their contributions to the company.

Several differences exist between the above companies. For example, in a limited liability company, the founders own equity in the company, expressed by a percentage of ownership (i.e., such a company does not issue shares of stock). The main difference between a limited liability company and a joint stock company, however, lies in the degree of structural complexity. Limited liability companies are relatively simplistic and accommodate the interests of minority owners. In sharp contrast, joint stock companies can be extraordinarily complex, particularly in cases of highly negotiated joint ventures with state-owned enterprises, and do not give minority shareholders very much protection.

The management structure of a stock company and that of a limited liability company is very similar with a few minor variations. The three-part structure is headed by the "general assembly of shareholders" (or in case of a limited liability company, "general assembly of participants") which represents the interests of the company owners. The next level, the "supervisory council" (a.k.a. the "board of directors") is optional in both structures; it is commonly employed in the stock company structure, but smaller companies tend to disregard it. The final level, the management board, performs the company's day-to-day functions.

In practice, simple joint ventures or 100% foreign-owned companies usually register in the form of a limited liability company. This company structure allows a relatively small number of people to avoid a complex multi-layered management structure composed of a general assembly, supervisory council and management organs and to avoid the registration of shares of stock. It is particularly attractive in cases of 100% foreign-owned companies because the charter (by-laws) can provide for one executive organ where the founder has complete and unequivocal control.

Capitalization Requirements

The Law "On Economic Associations" governs the formation of joint stock companies and limited liability companies, and contains no limitations on the size of share capital for joint stock companies, provided however that the company's authorized capital is divided into shares of stock of equal nominal value.

The minimum capitalization for registration of joint stock companies is 1,250 minimum monthly salaries, while for limited liability companies it is 100 minimum monthly salaries. As of January 1, 2007, one minimum monthly salary is equal to UAH 400 (from July 1, 2007 it will increase to UAH 420 and from December 1, 2007 to UAH 460). Note that increases of the minimum monthly salary are common; therefore, please verify this information before calculating authorized capital, fines, fees, etc. Contributions to the authorized capital of a company may be either in cash or in-kind.

Shareholders of stock companies and founders in limited liability companies must make initial pre-registration deposits towards their contributions prior to registration. According to the Law "On Economic Associations," 50% of a shareholder's contribution must be paid prior to registration if the shares are originally distributed amongst the founders of a joint stock company or a limited liability company. The remaining sum must be paid in its entirety, no later than one year after registration of both types of companies.

Company Registration

On July 1, 2004, the Law of Ukraine No. 755-IV "On State Registration of Legal Entities and Physical Entities-Entrepreneurs," dated May 15, 2003 (hereinafter the "Law"), came into force. The Law was specifically tailored to correspond with the Civil and Economic Codes of Ukraine, which simultaneously came into effect on January 1, 2004. The discussion below focuses on the registration of legal entities.

State registration in Ukraine evidences the creation or liquidation of legal entities, as well as any other registration activities which require an entry into the Unified State Register of Legal Entities and Physical Entities-Entrepreneurs (the "Register"). The Register should be fully up and running in 2006, including a "one-window" registration point.

Registration is performed by a duly qualified state registrar. They are responsible for registering legal entities, reserving names of legal entities (a novelty in Ukraine) providing information to various state authorities from registration cards, creating and storing registration cards, filling out and issuing certificates of registration and extracts from the Unified State Register, registering amendments in the founding documents of legal entities, registering terminations of activity.

Document Preparation

All documents to be submitted for any registration activity must be personally submitted or sent by registered mail and must be written in Ukrainian. Registration cards must be typewritten or handwritten in print and signed (in case of dispatch by registered mail, the applicant's signature must be notarized). All founding documents (charters, founding agreements, if applicable, regulations) must completely conform to the requirements of Ukrainian legislation.

Please note that documents, which are executed and issued in a foreign country, must be duly signed, notarized with a certification of the notary's signature by the authority in the foreign country authorized to certify such signatures and, finally, legalized with the Ukrainian Consulate in the foreign country or certified by an Apostille, provided that the foreign country has recognized Ukraine as a member to the 1961 Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents.

After a legal entity or entrepreneur is entered into the Unified State Register, the relevant state registrar will create a registration file and assign it a registration number.

Registration Process

The registration of a legal entity usually entails submission of the following documents:

· a duly filled in registration card for carrying out the state registration of the  company;

· a copy of the resolution of the founders or their authorized bodies on the  creation of a legal entity;

· two counterparts of the founding documents (according to the Civil and Economic Codes, the charter is the founding document of most types of companies,including joint stock companies, limited liability companies and enterprises);

· the document evidencing payment of the registration fee for the state registration of a legal entity; and for legal entities established by a foreign legal entity (foreign legal entities), a duly legalized (certified by Apostille) extract from the trade, banking or court register in such entity's (entities') country of location, which extract evidences registration in such country.

Again, we stress that if the above documents are issued in a foreign country, then such documents must be notarized, certified and affixed with an Apostille stamp in accordance with the 1961 Hague Convention (or legalized in the Ukrainian consulate in the country of origin) to use them officially in Ukraine. Importantly, "state registration" does not include mandatory registration with the social security funds, the Pension Fund of Ukraine, the Employment Center and the tax authorities.

In addition, the state registrar must provide to the statistics bodies, the state tax authorities, the Pension Fund of Ukraine and the social security funds (hereinafter "Registration Authorities") notice on the state registration of the company with an indication of the number and date of registration and all information in the company's registration card. This act alone will be the basis for the inclusion of the company into the registers of the aforementioned state authorities.

Individuals, who carry out commercial activities including the manufacturing and sale of products, the rendering of services or the performance of certain jobs, must also register as entrepreneurs for tax purposes. As a brief overview, the state registration of entrepreneurs includes the submission of a duly executed registration card and a copy of the individual's certificate evidencing registration as a taxpayer and payer of other mandatory payments and the payment of the registration fee. Information on the procedure for export or temporary performance from Ukraine of works of art, literature, musical instruments and other objects that have or may have cultural value available at the link: https://mkip.gov.ua/content/informaciya-pro-poryadok-vivezennya-abo-timchasovogo-vivezennya-z-ukraini-tvoriv-mistectva-literaturi-muzichnih-instrumentiv-ta-inshih-predmetiv-shcho-mayut-abo-mozhut-mati-kulturnu-cinnist.html

Law of Ukraine on Foreign Economic Activities (City of Kyiv, April 16, 1991, №959-XII)

Article 5. Right to foreign economic activities

"… Foreign business entities, which carry out foreign economic activities in Ukraine, have the right to open their representative offices in Ukraine. Registration of these offices shall be carried out by the Ministry of Economy of Ukraine within 60 days since the date the documents are submitted for registration. For the registration of a representative office of a foreign business entity on the territory of Ukraine there shall be submitted: · application for registration of a representative office in free form; · extract from the trade (banking) register of the country, where the foreign business entity is officially registered; · reference from the banking institution, where an applicant’s account is officially kept; · power of attorney to carry out representative functions issued in accordance with the law of the country where the office of the foreign business entity is officially registered;

The above documents shall be certified by a notary at the place of issue and dully legalized in consular institutions of Ukraine, if international agreements of Ukraine do not provide to the contrary. Foreign business entities shall pay for the registration of a representative office in the amount, fixed by the Cabinet of Ministers of Ukraine, which shall not exceed real expenses of the country, connected with this registration.

Should The Ministry of Economy of Ukraine refuse in registration of a representative office of foreign business entity or take no decision on its registration within the established 60-day term, the foreign business entity may appeal such refusal in judicial bodies of Ukraine.

There shall be prohibited to demand from a foreign subject of economic activities re-registration of previously registered representative office in Ukraine.

Should any change of name, legal status, legal address of a foreign business entity or its bankruptcy take place, the respective representative office in Ukraine shall inform about that The Ministry of Economy of Ukraine within the 7-day period.

Economic, including foreign economic, activities of foreign business entities on the territory of Ukraine, shall be regulated by the laws of Ukraine, where it concerns the procedure for implementation of economic activities in Ukraine. If this activity is connected with foreign investments, it shall be regulated by the relevant laws of Ukraine…"

List of Documents Necessary for Registration of a Representation of a Company in Ukraine

1. Application for registration on a letterhead of a company signed by Head of a company and with seal affixed. Form is free. Application has to contain: · name of a company; · address of a company; · telephone and fax numbers; · name of a city, in which a representation is established, and future address of a representation; · if subsidiaries are envisaged, please name cities of their location; · number of foreign employees in a representation; · date of establishment of a company; · name of a bank and number of account; · field of activities of a company; · purpose of establishment and field of activities of a representation (representation activities only), information on business relations with Ukrainian partners and prospects of cooperation development. Original of application with a signature of Head of a company attested by notary is submitted.

2. Extract from Trade Register of a country of location of an officially registered central management body (office) of a foreign business entity is attested by notary.

3. Certificate of a bank, in which account of a company is opened, containing the number of account. Original of certificate of a bank is submitted. Signature of a bank employee, which issued certificate is attested by notary.

4. Warrant in the name of concrete person for execution of representative functions in the territory of Ukraine, listing authorities of a representative.

Original of warrant with signature of Head of a company attested by notary is submitted.

Originals of documents listed in Paragraphs 1,23,4 have to be duly legalized in consular offices, representing interests of Ukraine.

The documents have to be translated into the Ukrainian language. Translation is attested by a seal of an official translator only.

The documents have to be submitted to Ministry of Economy of Ukraine no later than 6 months after their issuing in a country of location of a company.

Under acceptance of documents for registration, an applicant is given the number of account for payment of registration fee, amounting to 2 500 USD.

To make a specific request, please, complete the form below and send to the Economic Section of the Embassy.

Questionnaire form can be downloaded here (Word.doc or PDF.pdf, programm for PDF)

The completed form can be sent by e-mail:  [email protected]

Investment atlas of Ukraine and passports of the regions

http://bit.ly/1zi9kDm

Exporters and Investors Council (EIC) under the Ministry of Foreign Affairs of Ukraine was established in 2013 in order to safeguard national interests in Ukrainian export promotion and attraction of foreign investments to Ukraine.

EIC is a platform, which unites Ukrainian producers, exporters and leading business associations providing necessary support in promoting their goods and services abroad and entering new markets, as well as attracting foreign investors and companies to Ukraine effectively using diplomatic tools, resources and networks.

The Council represents interests of the Ukrainian companies from different sectors including:

• Agricultural sector;
• Food producers;
• Metallurgy;
• Machinery;
• IT;
• Chemical and pharmaceutical industry;
• Light industry etc.

The Council creates and maintains its database of Ukrainian producers and exporters and can assist in finding partners in Ukraine.

To expand its network The Council also cooperates with:

          - Ukrainian key business, industry organizations and international/bilateral business associations uniting efforts to use diverse tools in assisting national business communities;

          - Foreign trade state agencies, international business and trade associations, chambers of commerce providing members with an influential global network for business and education.

Due to the temporary occupation of certain areas in the Donetsk, Zaporizhzhia, Luhansk, and Kherson regions—recognized as illegal by UN General Assembly Resolution ES 11/4 on October 12, 2022—the European Union and other countries have introduced sanctions prohibiting trade, payments, and other foreign economic operations in the temporarily occupied territories of Ukraine.

To avoid payment blockages and the risk of secondary sanctions, we strongly recommend that you familiarize yourself with the dynamically updated list of temporarily occupied territories of Ukraine, available at this link: https://minre.gov.ua/en/list-of-tot/.

Please note that there are no restrictions on financial operations conducted by credit institutions for trade and services in the areas of the Donetsk, Kherson, Luhansk, and Zaporizhzhia regions that are under Ukrainian control.

• Government portal
• Ministry of Economic Development and Trade of Ukraine
• Ministry of Agrarian policy of Ukraine
• State Fiscal Service of Ukraine
• State Statistics Service of Ukraine
• National Bank of Ukraine
• State Export Import Bank of Ukraine
• Ukrainian Chamber of Commerce & Industry
• The American Chamber of Commerce in Ukraine (ACC)
• US-Ukraine Business Council (USUBC)
• Association of Exporters and Importers «ZED»