Doing Business In Ukraine

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Introduction from the Chairman of the British Ukrainian Chamber of Commerce

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Bate Toms
Bate Toms
Chairman - British Ukrainian Chamber of Commerce

On behalf of the British Ukrainian Chamber of Commerce ("BUCC"), it gives me great pleasure to briefly introduce this guide to doing business in Ukraine. Having spent the past 23 years in Ukraine, with regular trips to the BUCC's London office, it is apparent that Ukraine is the most underappreciated country in Europe. We hope that this guide will help to correct the appreciation abroad of Ukraine's reputation.

Ukraine has made rapid progress since it emerged from being a republic of the USSR and became again fully independent in 1991. Today, Ukraine has a developed infrastructure, its own functioning legal system, its own relatively stable currency and a developed industrial and agricultural base. As evidenced by the recent successful tender bids by Chevron, Shell and Exxon for rights to develop oil and gas, Ukraine has enormous potential for oil and gas and other resources, that was deliberately suppressed during the USSR, when pipelines and refineries were built in Ukraine to link it to Siberian oil and gas. Today, Ukraine has the potential for energy independence and even to become an exporter to the West. There are also other abundant natural resources, some of which, like titanium, are developed and others, like the rare earths and copper, that remain to be exploited.

Most importantly, Ukraine has one third of the world's richest soil, the chоrnozеm, known as the "black earth". It is estimated that Ukraine, fully cultivated to western standards, could feed a fifth of the world's population, increasing its agricultural production by over 500 per cent, to become the world's leading grain exporter and a leading producer of many other agricultural products. If, as predicted by Sir John Beddington, the UK Government's Chief Scientist, the world begins to experience food shortages by the end of this decade, which will then rapidly become much worse, food prices should soar and Ukraine should re-emerge as one of the richest countries in Europe, as it was in the 11th, 12th and 13th centuries, before the Mongol invasion. Most probably, the food security of the Middle East and much of Asia will in the next decade depend on Ukraine, the only country in the world (apart from Brazil if it cuts down its rainforests completely) that can significantly increase its agricultural production.

As one of the largest countries in Europe (the second largest in size and the sixth largest in population), with a highly educated population and a strong work ethic, but the lowest salaries in Europe presently (comparable to southeast Asia), Ukraine is also a natural location for manufacturing for distribution abroad. Ukraine is geographically in a prime central location, between Europe, Asia and the Middle East. In the future, it should become a transportation hub and its new airport terminals in Kyiv, Lviv, Donetsk and Kharkiv are well-suited for this role. Ukraine is only several days by truck to anywhere in Europe, unlike for shipping from Asia, which can take weeks by sea and Ukraine's Black Sea ports offer quick access by sea transport to Europe, the Middle East and North Africa. Thus, in addition to being Europe's principal agricultural producer, Ukraine is well-placed to be Europe's principal location for manufacturing facilities. Those factories that have been built over the past decade in Ukraine by western multinationals have been extremely successful.

We always recommend that companies looking for an investment location should visit Ukraine to see the country for themselves. Visitors are always surprised by how developed Kyiv and the other major cities are. Ukraine should also be a tourism destination, as it has six UNESCO World Heritage Sites, as well as many excellent five-star hotels and restaurants. The completely intact medieval centre of Lviv, known as Lemberg when it was part of the Hapsburg Empire, is an architectural gem with five cathedrals and monasteries, palaces, etc. The fortress city of Kamianets-Podilskyi, which has continued intact since the 12th century, is extraordinarily beautiful. Kyiv contains many of the most beautiful cathedrals in Eastern Europe, the Tsar's Ukrainian Palace and several of the finest hotels in Europe. The nearby cathedral city of Chernigov is also well worth visiting. The same can be said of the palaces in Crimea, around Yalta and the southern Crimean beaches. Yet all of this should be much more developed, with more hotels and flights from the UK and Europe.

The BUCC is ready to assist those interested in business in Ukraine with information, advice and introductions to facilitate your activities here.

With best regards,

Bate Toms
Chairman - British Ukrainian Chamber of Commerce


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