State aid to economic entities in the EU is one of the mechanisms for the effective functioning of the internal market, attracting investment, and monitoring the efficiency of spending public resources. According to international agreements, Ukraine must build a system of state aid to economic entities on the EU model and implement all provisions of the EU acquis into national law.

This study addresses the following issues: how the state aid has been transformed in the EU, how it operates today, why Ukraine is introducing a similar system, what has already been done, and what needs to be changed in the Law of Ukraine “On State Aid to Economic Entities” relating to definitions contained in this Law, exceptions from the Law, principles of admissibility and inadmissibility of state aid, criteria of admissibility of state aid for competition.