According to the International Trade Administration (U.S. Department of Commerce) Ukraine apart from the huge advantages has also the barriers to starting business. Here we will write about the marker requirements – risks to be aware of when starting business in Ukraine.
Ukrainian business has a big growth potential of 4-5% per year and many analysts agree that the country could show the same economic development with its neighbor – Poland in case if Ukraine could capitalize on its huge economic potential in information technology, trade-related transportation, agriculture business in Ukraine, aerospace and defense industry. At the same time, the analysts also agree on the constraints which restrain growth of Ukrainian business: occupation by Russia, foreign intervention, trade blockades and corruption.
In 2019 the Ukrainian Government took several first steps towards tackling the corruption in Ukraine, but it’s a long term changes. The progress of reforms is stalled by the oligarchs and the politicians they promote. Several consequences of this are lack of prosecutions related to corruption, failure to privatize state-owned Ukrainian business enterprises indirectly controlled by oligarchic business interests.
Partially due to the lack of reforms and a high-risk Ukrainian business environment, Ukraine is rated Caa1BB by Moody’sS&PFitch respectively. This is lower than some Latin American emerging markets, but this is above those in Africa.
Other market challenges for the business in Ukraine are:
- Complicated work with tax and customs officials.
- Opaque rules for working in tax and customs authorities.
- High tax rates for Ukrainian businesses.
- Limited financial resources.
- Insufficiently efficient judicial system, unable to resolve business disputes fairly.
- An opaque and ineffective regulatory environment.
- Insufficient protection of intellectual property rights.
UkrainExports is ready to help you to help you enter the Ukrainian marker and find a good partner in Ukraine.
