Improved State Guarantee Conditions for Investments in Ukraine

The German Government extends the instrument of investment guarantees for investments of German companies in Ukraine. In addition to property damage up to the complete loss of the investment, conversion and transfer risks for interest payments on equity-like loans can now be covered.

Investment Guarantees of the German Government

The investment guarantees are a support instrument of the German Government to protect German direct investments abroad against political risks (e.g. nationalisation, expropriation, war, civil war, transfer restrictions, breach of governmental commitments or payment moratoria and conversion or transfer restrictions). The Federal Government provides investment guarantees if the investment is eligible for support and the risk is reasonable.

Consequences of the Russian War of Aggression

After the start of the Russian war of aggression on Ukraine, the German Government discontinued investment guarantees for investments by German companies in Russia and Belarus. Regarding investments in Ukraine, the German Government most recently made it clear in April of this year that coverage by investment guarantees remains possible within reasonable risk limits. However, the risks of payment moratoria and conversion or transfer restrictions for equity-like loans were still excluded from the coverage.

Extension of the Coverage for Ukraine Investments

In order to preserve and expand the business relations of German companies with Ukraine even during the Russian war of aggression, the Interministerial Committee of the German Government for Investment Guarantees decided to expand the possible coverage for Ukraine investments.

Now conversion and transfer risks for interest payments on equity-like loans of shareholders or third parties (mostly banks) for investments in Ukraine can once again be covered by investment guarantees. Therefore, the capital invested (capital cover) as well as income due (e.g. dividends and interest) can now be guaranteed in the case of new and expanded investments in Ukraine.

Investment guarantees as part of risk prevention

Investment guarantees are an important part of risk prevention for German companies when investing in developing, newly industrialising and former transition countries. We are happy to advise you on your options for investment protection and assist with the application process.

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