Ukraine’s investment opportunities in agriculture, energy, information technology, infrastructure and manufacturing have grown lately too large for international investors to ignore. When combined with a highly skilled workforce, cost-efficiency, strategic geographic location and a rapidly improving business climate, Ukraine has much to offer. With unprecedented comprehensive reforms in the course of the last 3 years, Ukraine has quickly turned into a new, uncharted investment opportunity right at Europe’s doorstep. The economy made an astounding turnaround from the runaway decline of 9% of GDP in 2014 and 6,8% in 2015, toward 2,3% in 2016 and 2,5% in 2017.
The government stabilization efforts, supported by international financial institutions enabled the World Bank to improve its forecast for Ukraine’s growth in 2018 to 3.5% from 3%, while the forecast for 2019 has been revised upwards to 4%. In the course of 3 years, Ukraine moved up 17 places, to 24th in the A.T. Kearney Global Services Location Index 2016. The EY’s 2017 Attractiveness Survey Europe places the country in the top 20 destinations by foreign direct investment and its impact in terms of job creation and raising social standards.
Head of Ukraine’s Mission to the EU, Ambassador Mykola Tochytskyi said: “Despite the Russian aggression in Donbas and occupation of Crimea, Ukraine implements ambitious reforms aimed at strengthening democracy and rule of law, ensuring economic prosperity, modernisation and well-being of citizens. Over the last 4 years, we have done more than over the previous 23”.
Key reforms undertaken and completed so far have included:
– Establishment of comprehensive anti-corruption infrastructure, encompassing national anti-corruption bureau, separate anti-corruption prosecution office and specialized anti-corruption court;
– Restructuring and privatization of remaining state-owned enterprises, including privatization of state-owned SMEs via transparent, electronic auctioning system, introduction of modern corporate governance into state-owned giants like State Railway Company (UkrZaliznytsia) and the Postal Service;
– Implementation of the Deregulation legislative package of 35 laws, aimed at liberalizing capital movements, improving creditor protection, ‘single-window’ approach in customs clearances, automatic VAT refund, simplifying administrative procedures for the use of utilities in FDI greenfield projects.
Ukraine offers a unique combination of traditional and emerging industries, which are aligning to establish the next phase of the development of the Ukrainian economy in line with the rapid pace of modern technological innovation (Industry 4.0). They include manufacturing (automotive, agri-food, aerospace), creative (fashion, graphic design, film-making), digital and energy (solar, wind, bioenergy).
Ukraine achieved significant progress on European path which resulted in entry into force and implementation of the Association Agreement, establishment of the Deep and Comprehensive Free Trade Area (DCFTA) and introduction of Visa-Free regime with the EU. Ukraine made historic changes in its trade geography. Now the EU is Ukraine’s largest trading partner.
The value of investing in Ukraine is augmented by its geographical location and transport infrastructure. Ukraine is centrally positioned in Europe, with direct transport access to Asia via the Black Sea, making it ideally situated for manufacturing and trade.
With over 170,000 km of roadways, 22,000 km of rail lines and 13 sea ports, Ukraine has the infrastructure to quickly move goods – from grain to auto parts – within the country or beyond borders. Major destinations in Europe can be reached in 2 days by truck, giving Ukraine a competitive edge, particularly for manufacturing and food distribution.
The EU-Ukraine DCFTA as well as a network of running or upcoming bilateral free trade deals with other key markets (EFTA, Turkey, key CIS countries, Canada, Israel) makes Ukraine a prime destination for trade-oriented foreign direct investment seeking to make the most of its unique advantages.