Ukraine consulting


1. Business climate

The economy of Ukraine is an emerging free market, with a gross domestic product that fell sharply for the first 10 years of its independence from the Soviet Union, then experienced rapid growth from 2000 until 2008. A deep recession during the 1990s included hyperinflation and a fall in economic output to less than half of that achieved before independence. GDP growth was first registered in 2000, and continued for eight years.In 2008, Ukraine’s economy was ranked 45th in the world according to 2008 GDP (nominal) with the total nominal GDP of 188 billion USD, and nominal per capita GDP of 3,900 USD.
However Ukraine was greatly affected by the economic crisis of 2008. The Ukrainian currency, which had been pegged at a rate of 5:1 to the U.S. dollar, was devalued to 8:1, and was stabilized at that ratio till beginning of 2014, in the period of next year it was devaluated to 28:1.
There was 3% unemployment at the end of 2008; over the first 9 months of 2009,unemployment averaged 9.4%. The final official unemployment rates over 2009 and 2010 where 8.8% and 8,4%. Although the CIA World Factbook notes a “large number of unregistered or underemployed workers”.
The Ukrainian economy recovered in the first quarter of 2010. Ukraine’s real GDP growth in 2010 was 4.3%, leading to per capita PPP GDP of 6,700 USD.
As of 2013, 35.9% of Ukrainian exports went to CIS countries, namely Russia, Belarus and Kazakhstan. At the same time share of EU countries was 26.6%. By 2015 the EU became Ukraine’s largest trading partner, accounting for more than a third of its trade.
Natural gas is Ukraine’s biggest import and the main cause of the country’s structural trade deficit.
Due to the War in Donbass Ukraine’s economy shrank 6.8% in 2014, it was expected to decline 8%. For 2015 a further decline of 9% is expected.

2. European Union, NATO
In 2005, President Viktor Yushchenko stated that membership in the EU was a strategic goal of his foreign policy. In practice, Ukraine maintains especially close ties with Russia (including energy dependence) and balancing this relationship affects the speed with which Ukraine can move toward integration. The EU is expected to deepen economic and political ties with Ukraine.
Ukraine has a close relationship with the North Atlantic Treaty Organisation (NATO), particularly with respect to emergency situations, technical cooperation, scientific studies and military and defense reforms.

3. International agreements
Ukraine has established diplomatic relations with approximately 170 countries.
Ukraine is a member of the United Nations, the International Monetary Fund (IMF), the World Bank, the European Bank for Reconstruction and Development (EBRD), the Council of Europe, as well as a number of other international organisations. Ukraine also cooperates with the Organisation for Economic Cooperation and Development (OECD), but is not a member.
Ukraine is a member of the WTO since May 2008
In addition, Ukraine has concluded a number of bilateral agreements concerning trade, avoidance of double taxation, and mutual guarantees of investments. It also has a free trade agreement with Russia, as well as countries of the Commonwealth of Independent States (CIS).

4. Legal environment
The Ukrainian judicial system underwent significant reforms in 2002. Senior judges are now nominated by the Parliament and have been appointed by presidential decree for five years, after which Ukraine’s Supreme Council confirms them for life.
A legal framework exists and courts are always there as an option for resolving disputes, but issues may best be resolved outside of the judicial system. It is worth considering arbitration as an alternative dispute resolution mechanism when drafting contracts, although it needs to be recognised that the Ukrainian alternative disputes resolution mechanism is still developing and there is still a shortage of skilled arbiters in the country.

5. Property market
Foreign citizens and legal entities have the right to own apartments, houses, and other facilities. Ownership of non-agricultural land is also possible, although legal and regulatory restrictions and red tape can significantly complicate the process.
There is an extensive interest in the real estate market, but a lack of investment grade buildings in Ukraine limits the opportunities for property investors. This creates a lot of opportunities for foreign developers, if they are prepared to navigate the legal and regulatory hurdles that currently exist.
6. Foreign investment

Investment climate

Ukrainian authorities regularly declare a keenness to encourage foreign investment and the public is well disposed to foreign investment.
There are few restrictions on foreign ownership. The major exceptions are published and broadcasted. Otherwise, the regulatory framework for the establishment and operation of businesses in Ukraine by foreign investors is similar to domestic investors. As a general rule, investment permits are not required, but all enterprises must be established according to the form and procedure prescribed by law and registered with appropriate government agencies. Foreign investors are generally not required to seek special approval from authorities for foreign direct investments.
Both domestic and foreign investors still encounter difficulties at a practical level. These do not relate specifically to the issue of foreign ownership or investment, but rather to administrative hurdles that are arbitrarily enforced.

Restrictions on foreign investment in Ukraine

As mentioned above, restrictions exist for foreign investments in the publishing and broadcasting sectors, and foreigners are not allowed to participate in the manufacturing of weapons.

Investment incentives

Ukraine eliminated all investment incentives in March 2005. In August 2006, the Parliament supported a draft resolution recommending that special tax regimes in free economic zones and tax incentives for technology parks be restored.

Foreign exchange issues

Foreign currency is regulated by the 1993 Cabinet of Ministers Decree, On The System Of Currency Regulation And Currency Control, as well as a number of implementing rules issued by the National Bank of Ukraine (NBU). A number of foreign currency transactions may only be undertaken if an individual license is obtained from the NBU. However, there has been an ongoing trend toward less restrictive rules, the most recent development being the removal of the requirement that Ukrainian residents convert at least 50% of any foreign currency proceeds into local currency (hryvnia).
A 1% Pension Fund charge applies to the acquisition of foreign currency.

Repatriation of capital and earnings

Foreign investors are entitled to repatriate profit, income or other funds related to investments without any restrictions, after the payment of applicable taxes. Foreign investors are guaranteed the right to the prompt and unimpeded repatriation of profits and other funds in foreign currency derived from their investments in Ukraine. Conversion of funds for repatriation is effected through the Ukrainian Inter-bank Currency Exchange.
Although not strictly required under the law, registration of the foreign investment may reduce complications in the future (withdrawal of capital, for example). This involves submitting a prescribed set of registration documents to the regional (oblast) state administration.
Foreign investments are not subject to nationalization, expropriation, requisition, or any other measure of similar effect, except when this is in the public interest. In such cases, compensation must be provided to the investor based on the market value of the property.


  • 46 million consumers – the greatest market in Eastern Europe
  • Highly competitive, well-educated, skilled workforce
  • Strategic location at the crossroads of East-West and North-South trade routes
  • Ideal platform for manufacturing and exporting both to Russia and to the EU
  • Extensive transport infrastructure with railroad system, Black Sea ports, and PanEuropean Transport Corridor roadways
  • Dynamic economic growth in the past five years—one of the highest in Europe
  • Developed value-added industries with strong technical capabilities
  • Concentration of specialized knowledge, network of universities and scientific research centers
  • Many investors success stories including such companies as Kraft Foods, Coca-Cola, Hewlett Packard, Cargill, Knauf, Yazaki, McDonalds and Raiffeisen Bank.

Investment opportunities and current business projects include:
Investment opportunities in Ukrainian agricultural production and agricultural infrastructure.
Ukraine boasts over 30% of the World’s reserves of most fertile black soils. The post-Soviet economic decline has affected agricultural production. Arable lands are still not traded but it should not stop any agricultural venture from entering the market with the biggest potential of its kind in the World. Ukraine is the most suitable location in the World today for organic agriculture and sustainable biodynamic farming which can provide 25-35% savings on operational costs and irrigation needs and over 20% higher yields compared to conventional.
Agricultural infrastructure such as field granaries and port grain elevators are becoming increasingly demanded by the fast developing farming sector and growing international demand for food.
Agricultural modern technologies such as parallel driving and fuel control systems are becoming more popular among Ukrainian farmers who continue to realize the power of efficiency and extra earning against the capital investments in technology.
Investment opportunities in Ukrainian banking sector
Despite the news reports about the troubles in the Ukrainian banking sector, banking remains one of the most attractive sectors in any growing economy. The banks which had absolutely failed to control any financial risks as well as those that had been created as “pocket banks” serving suspicious commercial schemes are among the ones going through the hard times today in Ukraine. Those bankers who could control both appetites for abundant growing potential and manage currency risks have now laid a strong foundation for their further expansion.
Modern retail banking technologies and superior client service practices can still make any new player in the market a winner in a very short period of time.
Financial services: Insurance and Leasing | Investing into Financial Services sector in Ukraine.
Ukrainian market is absorbing all types of financial services. Most common are Insurance and Leasing. Opportunities exist for large operator entry, take over of existing companies as well as establishment of brokerage networks across the vast territory of Ukraine.

Investing in web media and custom software development in Ukraine

Ukrainian IT brains have been renown all over the World and many of them have actually returned to Ukraine to start up new Internet ventures and software houses producing some of the most sophisticated web applications and mobile applications used all over the World. Ukrainian software developers mostly work with their Western European or American partners as the R&D and back office support. World leaders in software development outsourcing have opened their branches in Ukraine to elaborate software architecture design projects and brain-intensive R&D assignments.

Health care, Sports and Recreation

Escalating standards of living in Ukraine have still brought no major international operators of spa & wellness clubs, sports gyms, fitness centers, and other recreational services. At the same time, demand for recreational services and health care medical services is continuing to grow while quality supply is not sufficient to fill the mass market.
Investing in hotels, restaurants, residential space and commercial real estate in Ukraine.
Ukrainian real estate prices soared in 2008 and have  been adjusted with the world financial crisis trimming access to financial resources. The buying power decrease however has only temporarily affected the real estate market with a new cycle of development expected by the end of 2009 when Ukraine will also be passing the Presidential elections period which will attract a lot of capital into the country.
Long and mid-term investing in Ukrainian real estate has always been risky but never failed! Lower market today only means a greater opportunity for tomorrow as the economy will revitalize very soon despite the gloomy news reports in the Ukrainian and international press. The important indicators of the Ukrainian economy are still beyond traditional theories of Western economists and thus cannot be based on official statistics and calculations of real GDP.