The NBU has estimated the amount of foreign direct investment (FDI) that originated from the funds of domestic origin in 2010–2017. The process is known as FDI round-tripping, whereby residents' funds leave the country and then return to the same country in the form of FDI.
To that end, the NBU has analyzed the funds that were received in the form of FDI in 2010–2017 (both as investment in authorized capital and as direct investor loans) and identified the cases where the ultimate investor is a resident of Ukraine.
According to the findings, the amount of the FDI whose ultimate investor is a Ukrainian resident was estimated at USD 7.9 billion, or 22% of total FDI in Ukraine in the above period (USD 35.9 billion). More than 80% of such FDI was channeled to the real sector.
The largest FDI amounts were observed in 2010–2013. At that time, it averaged about a third of the net FDI inflow in Ukraine, up from a mere 6.9% in 2016–2017, while in 2014–2015, net outflows of funds from Ukraine were observed.
In 2017, FDI with Ukrainian residents as ultimate investors amounted to USD 270 million, or 10.4% of the total FDI in Ukraine.
The main countries through which the FDI was made were Cyprus (about half of total FDI), the Netherlands, Switzerland, and Austria.
The analysis makes it possible to estimate the amount of the FDI of foreign origin in Ukraine. The NBU plans to post such data on an annual basis.
For more details on the methodology and analysis findings concerning the FDI, see the presentation Hindsight Analysis of the Data on Foreign Direct Investment Whose Ultimate Investor Is a Resident (Round Tripping) for 2010–2017.
For reference: As of today, only a few countries have started publishing, on a regular basis, the statistics on the FDI whose ultimate investor is a resident. Such investment is characteristic of both developing and advanced economies, albeit to a lesser extent for the latter.
The main reasons for conducting such operations are not only the desire to optimize the tax burden, but also investors' efforts to avoid weaknesses in the institutional and financial system of tight FX control.