The Country Commercial Guide contains the following chapters:
Chapter 1: Doing Business in UKRAINE
The Ukrainian market is poised for progress, guided by a motivated, reform-minded government that has dedicated itself to rooting out market inefficiencies, improving Ukraine’s business climate, and pursuing deeper economic integration into the global market. This ambitious agenda is buoyed by a population eager for stability, change, and a return to prosperity.
Since the ouster of former President Yanukovych in late-February, Ukraine has made promising headway towards a brighter economic future, instituting a more transparent government procurement system, simplifying business registration requirements, and signing the economic portion of its Association Agreement with the European Union.
However, this forward momentum has been attenuated by a shifting regional trade dynamic, Ukraine’s overreliance on commodity exports, and still-present issues related to endemic corruption, which are challenges that will need to be managed for Ukraine’s economic rebirth to come to fruition.
In addition, serious security concerns remain in Eastern Ukraine, specifically in Luhansk and Donetsk oblasts, where violent clashes between the Russia-backed separatists and Ukrainian forces have escalated in recent months and have resulted in hundreds of injuries and deaths. Russian forces have occupied the Crimean Peninsula in support of the Russian Federation's attempted annexation of Crimea and these forces are likely to continue to take further actions in the Crimean Peninsula consistent with Russia's continuing occupation of this part of Ukraine.
Ukraine’s private sector, made up of a diverse range of local and foreign companies, has been the driving force keeping the economy afloat, creating jobs, and generating tax revenues. Major infrastructure projects are needed to improve basic quality of life standards and with the generosity of the donor countries, funding is available.
The government has sent strong signals that it welcomes foreign investment, and has already taken bold steps to turn the page on the past.
The Ukrainian Government has shown a newfound commitment to pursuing a reform agenda that could lead to an overall improvement in the business climate in Ukraine. Ukrainian officials have displayed a respect for the needs of Ukraine’s citizenry and understand that economic growth is dependent upon avoiding the shortfalls of the previous regime. This bodes well for economic development that was forestalled in the past by greed on a massive scale.
The protection of property rights can be problematic and intellectual property rights are almost universally not respected. In addition, a variety of market challenges remain, including:
The Ukrainian pharmaceutical market is expected to remain attractive due to an aging population and demographic trends. There is also an emerging political consensus on the need to introduce reimbursement and an insurance-based healthcare system. This will boost pharmaceutical expenditures in the long term and provide pharmaceutical manufacturers with significant growth potential.
Medical equipment currently used in public hospitals is typically obsolete, having exceeded its period of use. Given the limited financial resources of most public health institutions, replacement will be slow until the State budget situation improves. As a consequence, the lack of resources in public hospitals has stimulated steady growth in the number of private clinics and practitioners. Sub-sector best prospects include:
In 2015 Ukraine will host the European Basketball championship, FIBA EuroBasket. The infrastructure build-up for the FIBA EuroBasket has created a growing demand for safety and security equipment technology such as: high-tech sensing and detection devices and equipment, advanced surveillance and access control systems, as well as airport security equipment. Sub-sector best prospects include:
Ukrainian farmers, large and small, prefer foreign manufactured agricultural machinery because of its dependability and state-of-the-art technology. Although the current government announced plans to stimulate local production of agricultural machinery, it is not yet clear what specific measures they plan to introduce to this effect. Sub-sector prospects include:
The oil and gas industry has the potential to play a significant role in providing energy security. This sector is considered both strategic and essential for Ukraine to become independent from foreign suppliers.
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