DIRECTIONS FOR ACTIVATING THE INCREASE IN FOREIGN DIRECT INVESTMENT IN UKRAINE

Abstract

The article examines current conditions for attracting foreign direct investment to Ukraine and proposes an integrated framework for increasing private foreign capital during wartime and reconstruction. Foreign direct investment is assessed not only by the value of recorded flows but also by its capacity to create productive assets, transfer technologies, support skilled employment and integrate Ukrainian firms into European value chains. Particular attention is paid to the distinction between reinvested earnings, intra-company debt and genuinely new equity capital, since growth in the statistical indicator does not necessarily mean an equivalent increase in new productive investment. The study systematizes the main constraints affecting investment decisions: military risks, insufficient war-risk insurance, energy and transport disruptions, shortages of qualified labour, high financing costs, foreign-exchange restrictions, institutional uncertainty, weak judicial protection and administrative barriers. These constraints reinforce each other and therefore cannot be neutralized by isolated tax incentives. Priority areas for strategic investment include defence and dual-use technologies, distributed and renewable energy, agri-food processing, logistics, machinery, information technology, deep-tech, critical raw materials and reconstruction-related manufacturing. Special emphasis is placed on the Ukraine Investment Framework, blended finance, international guarantees and risk-sharing mechanisms as instruments for lowering the investment risk premium and mobilising private capital. The article proposes a national digital “Investments in Recovery” platform with a transparent pipeline of technically, legally and financially prepared bankable projects, as well as Human Capital Agreements between investors, local authorities and educational institutions. It is concluded that Ukraine should move from fragmented incentives to a comprehensive model aimed at reducing the total cost of investment risk through security, the rule of law, insurance, access to finance, resilient infrastructure, skilled human capital and regulatory convergence with the European Union.