Investing in Ukraine

Investing in Ukraine

Blog Article

Investing in Ukraine Benefits

As the last emerging market in Europe that’s a candidate for EU membership, Ukraine offers many benefits to investors. Its talented workforce, cost-competitive production platforms, and availability of free trade agreements with a number of global markets can help you grow your business in the country.

However, Ukraine’s economic recovery is still fragile as vested interests and oligarchic influences continue to influence public policy for personal gain. This has sparked investor concerns and jeopardized a new IMF assistance program. Read on investing in business opportunities to discover more.

1. Economic growth

One of the main ways in which a country's economy grows is by creating new capital. This capital is usually the result of someone in the economy engaging in some form of saving (sacrificing current consumption) in order to free up resources for a more productive purpose.

However, growth also occurs when technological improvement leads to a more efficient use of existing resources or production capacity. For example, the invention of gasoline fuel changed the way that people used and disposed of their existing petroleum products.

The government of Ukraine has made economic development a top priority and offers a variety of incentives to attract foreign direct investment. Those include a government manager for each investor, a direct investment agreement that allows them to pursue international arbitration for violations of property rights, and tax breaks.

2. Employment opportunities

The war has had a severe impact on Ukraine’s economy, including the loss of jobs and income. However, Ukrainian companies continue to hire and invest in their local workforce.

One of the largest draws for foreign investments in Ukraine is its thriving information technology (IT) sector. With more than 200,000 highly qualified IT workers, the country was a leader before the war in areas such as cloud computing, artificial intelligence (AI), and blockchain.

Ukraine’s digital sector is already a major source of resilience, helping to improve efficiency and reduce costs across several sectors. For example, a new app for government services called Diia helps citizens find their documents and automates administrative processes.

3. Tax breaks

Ukraine offers a number of tax breaks to investors. For example, if a company makes profits from domestic sales of energy-saving equipment, the income is exempt from corporate income tax for up to five years.

As a result, the government is able to attract more investment and boost economic growth. The country also recently launched a program that provides loans to micro and small enterprises at discounted rates of five, seven, or nine percent.

However, Ukraine’s tax system is still regressive. The country’s recent adoption of a Distributed Profit Tax (DPT) will worsen this trend.

4. Security

Ukraine has a large consumer market, a skilled and cost-competitive workforce, abundant natural resources, and a growing number of investment opportunities. The government is continuing to advance legislation to capitalize on these strengths.

The key challenge for foreign investors is the high level of corruption. Companies are often exposed to corporate raiders, shakedown raids by tax police, and demands for bribes from politicians and bureaucrats.

Ukraine is trying to reform its regulatory regime, bringing it more in line with international norms and establishing a system of transparency and accountability. However, the country continues to face serious challenges with rule of law issues, such as outdated and contradictory regulations and a high degree of arbitrariness and favoritism in decisions by government officials.

5. Reliability

Investing in Ukraine benefits is a way to support the country and its people. It also helps support a democratic society that is based on freedom and human rights.

The OECD has been working closely with Ukraine since 1991 to help reform the country’s economy and governance structures. This has led to a number of successful initiatives and policies to support the Ukrainian economy and governance.

The OECD Council condemns Russia’s illegal and unprovoked invasion of Ukraine. It calls on the OECD and its member countries to continue to provide Ukraine with the resources necessary for recovery and reconstruction.