On 22 October 2019,
H.E. Ambassador Mr. Mykola Tochytskyi held a meeting with the Belgian businesspeople doing business in Ukraine for a briefing about the current status of the business climate in Ukraine after the recent elections.
The Ukraine Invest & Trade Office organised, in collaboration with the Embassy of Ukraine in Brussels, a meeting and High level network reception.
The event gathered over 60 representatives of small, medium and large companies in Belgium who are successfully operating at the Ukrainian market or whose who wish to invest in business development in Ukraine.
(such as "Steelforce NV", "Deme Group", "Globachem", "Frisomat", ”Lalemant Trucking” "Schreder", "Sea Port's of Ghent and Antwerp", "ABC engines", etc.) operating at the world market.
Mr. Ambassador emphasized during his speech: The priorities of economic integration in the EU include simplification of customs procedures, signing of agreement on mutual recognition of certificates of conformity for industrial products (ACCAA), integration of the electricity and gas market, improvement of transport links and more. The Ambassador informed Belgian entrepreneurs that the concrete outcome of the Association Agreement was the growth of Ukrainian exports to EU countries. "Today, 42% of our trade is in the European Union," the diplomat said optimistically.
Ambassador Tochytsky also told about the intention of the Ukrainian authorities to lift the moratorium on the sale of land next year and to make serious changes to the customs legislation, which is mostly complained of by foreign investors. According to him, the completion of the judicial reform and the start of the anti-corruption court give Western businessmen a guarantee that any serious problems that will arise or arise during their work in Ukraine will be settled in the civilized legal field.
Honorary Consul of Ukraine to Belgium Kris Beckers said in a comment to the
«УК» Courier - Newspaper of the Central Authorities of Ukraine
That changes made in the structure of the new Ukrainian government, such as the association of ministries of economy and agriculture, will accelerate the reform process and that the new configuration of the Cabinet of Ministers is supported by relevant parliamentary committees , will facilitate more effective cooperation between the executive and legislative bodies in the development of public policy. "I am active as an entrepreneur and know the importance of getting specific information to run your business, so we need to have a clear vision of how the business climate in Ukraine will develop," Chris Beckers explained.
And the chief executive officer of Frisomat, which has been present in the Ukrainian market for several years, Chris Oorts, in a conversation with «УК», confirmed that he has high expectations for the team of President Vladimir Zelensky. Frisomat builds large steel structures throughout Ukraine: hangars, warehouses used in industry and agriculture. Therefore, the company expects to lift the moratorium on the sale of land, which, according to Chris Oorts, will promote business. "We also look forward to improving customs procedures that really create problems," he said.
Pierre Paul Tillemans, general manager of the Belgian company Lalemant Trucking, which handles cargo worldwide, considers the bureaucracy a major problem in doing business in Ukraine. “I have considerable experience in Eastern Europe - our offices are in Poland, Romania, Russia, Czech Republic, Bulgaria. However, the specificity of Ukraine is that its development and progress are too slow, ”the businessman said in a comment to «УК». Separately, he stressed that neither government officials nor customs officials ever demanded bribes from his firm. "We know that corruption exists in Ukraine, but we have never encountered it," he said.
Pierre Paul Tillemans advises the Ukrainian government to simplify the conditions for doing business: “Now, in order to do something in Ukraine, it takes a lot of time and paper work. For example, it takes a lot of effort to make a payment at a bank. ” Still, Pierre Paul Tillemans considers Ukraine a good market, even if it takes three to five years for the business climate to improve. “The new government and the President can accelerate these processes. I know it is hard work, but I hope that it will be done, and so Ukraine will attract more entrepreneurs and investors, ”the Belgian businessman emphasized.
BUSINESS NEWS
Krykliy: 24,000 km of roads to be repaired in Ukraine within next five years
The Ukrainian government approved a plan to repair 24,000 kilometers of roads within the next five years. Infrastructure Minister Vladyslav Krykliy stated this at a working meeting in Mykolaiv on October 2, an Ukrinform correspondent reported. "Within the next five years, we have to build and repair 24,000 kilometers of roads in Ukraine. This is a very ambitious project. It is much bigger than it was before. Although apart from major construction, there will be also current and average repairs," said Krykliy. In addition, according to him, there will be comprehensive changes in the State Agency of Automobile Roads (Ukravtodor) and the State Service for Transport Security (Ukrtransbezpeka). Law enforcement officers are being actively working in this direction. Also, more international financial institutions will be involved in the work on reforming the road sector, Krykliy said.
Govt and NBU sign memorandum of cooperation to achieve sustainable economic growth
The National Bank and the Government have signed a memorandum of cooperation between the Cabinet of Ministers of Ukraine and the National Bank of Ukraine aimed to achieve sustainable economic growth and price stability. The document will serve as a basis for joining efforts of the institutions to ensure price stability as a necessary prerequisite for sustainable economic growth in Ukraine, according to a statement on the Government portal. In addition, such cooperation will further improve the expectations of the population and business, in particular with regards to inflation, and bolster investor confidence in the Ukrainian economy. Prime Minister of Ukraine Oleksiy Honcharuk and National Bank Governor Yakiv Smoliy noted that the state institutions had a shared vision of the importance of maintaining low and stable inflation to ensure a growing trend in the economy. The National Bank will further pursue a monetary policy aimed at reducing the inflation target to 5% with a tolerance level of +/- 1 p.p. For its part, the Government undertakes to maintain the reduction of inflation target to 5% by means of a reasonable economic policy.
PM Honcharuk: Government’s goal to achieve 40% economic growth is possible
Prime Minister Oleksiy Honcharuk has stated that the goal of the Cabinet of Ministers to reach economic growth of 40% is quite possible. “Every day [during the previous week] we, together with my colleagues and other ministers, explained to people across the country the goals of the Government’s Action Program. People should know in detail about all our intentions and ambitious plans. I stress again: economic growth of 40% is our common goal. It is real. We need to work a lot to achieve this, so I wish all of us strength," he wrote on his Facebook page. The prime minister noted that from now on at the end of each week he will report on the activities of the Cabinet of Ministers.
Honcharuk named several important decisions approved by the government over the previous week, in particular, on the introduction of electronic power of attorney for customs inspections, which would minimize corruption component and unnecessary business expenses. The prime minister also reminded that last week, in order to accelerate the country's economic growth, the government and the National Bank signed a Memorandum on Policy Coordination. “I am grateful to the National Bank for an independent and consistent policy. Our economy is recovering, and inflation is declining,” he wrote. The head of government also thanked Ukrainian MPs for supporting important economic laws. In particular, he mentioned the adoption of Law No. 1054-1 “On privatization”, which cancels the list of 1,470 enterprises prohibited for privatization, and Law No. 1046 "On concession", which will combine the efforts of the state and business in developing very large facilities.
EU markets and investments: Vice PM Kuleba calls on business for open dialogue
Ukrainian Deputy Prime Minister for European Integration Dmytro Kuleba calls on Ukrainian business for open and frank dialogue in order to open the EU markets for Ukrainian goods and attract investments from the EU. He stated this at a meeting with members of the European Business Association on Monday, October 7, the Government portal reported. “I am one hundred percent sure that we should talk and hear each other. I am always ready to communicate. I build the same model of relations with civil society, and, in fact, with the European Union,” Kuleba said. According to the deputy prime minister, his priority goal is to ensure that the business grows and develops, pays taxes and strengthens the economy "because if there is no economy, we can forget about all foreign and domestic ambitions."
EBRD, EU allocate EUR 70 mln to support SMEs in Ukraine
The European Bank for Reconstruction and Development (EBRD) and the European Union are providing EUR 70 million for the development of small and medium-sized enterprises (SMEs) in Ukraine. Credit funds will be provided through three commercial banks, in particular, Raiffeisen Bank Aval, ProCredit Bank, and OTP Bank.
A respective agreement on the financing of SMEs for EUR 70 million between the EBRD and partner banks was signed at the EBRD office in Kyiv on Tuesday, October 8, according to an Ukrinform correspondent. The program improves access to finance for small and medium-sized businesses and is supported by EU grant funding under the EU4Business initiative, which ensures the operation of Business Support Centers in Ukraine. At this stage, three local banks joined the program. In particular, Raiffeisen Bank Aval will receive EUR 25 million in hryvnia equivalent, ProCredit Bank - EUR 20 million in hryvnia equivalent, and OTP Bank – EUR 25 million in hryvnia equivalent. These funds will be provided for investment, as well as for the working capital of local small businesses. Hryvnia loans will protect companies from foreign currency fluctuations.
Since the start of its operations in Ukraine in 1993, the EBRD has made a cumulative commitment of almost EUR 13.6 billion through 432 projects in the country.
Zakarpattia region creates portal for foreign investment
Ukraine’s Zakarpattia region is launching a portal with offers for investments from local businessmen and wishes from investors. Chairman of Zakarpattia Regional State Administration Ihor Bondarenko said this at the investment forum "Zakarpattia region is business in the center of Europe" on October 10. “There are 600 enterprises with foreign investments in Zakarpattia region. This means that we, as a region, have an attractive investment image. However, we are well aware that it is not easy to keep an investor. That is why we are launching an investor support service in Zakarpattia region. This is our regional initiative, which will be implemented as an investment portal of the region,” Bondarenko said. According to the director of the Department of Economics of Zakarpattia Regional State Administration, Denys Man, the investment portal will help to register all the requests of our investors and actively respond to them. “A full-fledged resource will start operating from November 1. The website has already been created. There are already about 130 proposals for investments from local businesses. Also, the local authorities are waiting for proposals from businessmen who are ready to develop and support the region,” he said. The purpose of this platform is to coordinate the efforts of business and investors, the director stressed.
President signs law abolishing investment tax
President of Ukraine Volodymyr Zelensky has signed the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine on Encouraging Investment Activity in Ukraine." The relevant announcement is posted on the Verkhovna Rada website.
This law abolishes the share contribution to the development of city infrastructure and aims to encourage investment. The purpose of this document is, in general, to improve the investment climate in Ukraine in specific areas, which were selected as a result of a comprehensive assessment of the compliance of Ukrainian legislation with the best world practices described by the World Bank Group in its Doing Business rating methodology.
IMF improves Ukraine’s economic growth forecast
The International Monetary Fund expects Ukraine's GDP to grow at 3.0% in 2019.
This is stated in the World Economic Outlook report released on Tuesday. Thus, according to the latest estimates of the IMF's experts, the real level of Ukraine's GDP is projected at 3.0% by the end of this year. In the April report, it was 2.7%.
The IMF has confirmed its forecast for Ukraine for 2020 at the level of 3.0%, which is in line with the estimates announced in April. According to other data in the report, this year's consumer price index will reach 8.7 and decrease to 5.9 next year. The current account balance will remain negative, at the level of -2.8% in 2019 and -3.5% in 2020. The unemployment rate in Ukraine will fall from 9.0% (last year) to 8.7% in 2019 and 8.2% next year.
Government to approve list of enterprises available for privatization by year-end
The Government of Ukraine will define the enterprises available for privatization by the end of the year. “We plan to decide on specific names of these companies by the end of the year,” Prime Minister of Ukraine Oleksiy Honcharuk said at a briefing, an Ukrinform correspondent reports.According to him, there are many local enterprises in Ukraine that have fulfilled some functions but the state will benefit from selling them. “These are distilling plants, recreation facilities and so on. These facilities must be privatized. Why? Because everything has been already privatized there. The profits have been privatized. As a rule, there is some management that steals something, rents [an enterprise] out for a penny and destroys or depletes these assets," the Prime Minister said.In addition, he added, there are large enterprises and companies that are not of strategic importance, for example, some state-owned banks that can be sold without any losses.There are also up to ten state-owned companies that perform socially important functions, Honcharuk added. “These enterprises can either be completely banned for privatization or prepared for entry to foreign sites to attract systemic investors,” the Prime Minister stressed.Earlier, Economic Development, Trade and Agriculture Minister of Ukraine Tymofiy Mylovanov informed that the Cabinet of Ministers of Ukraine had approved the stages of preparation and conduct of privatization of 800 state-owned enterprises.
State Customs Service starts creating regional departments
The new State Customs Service of Ukraine has started to create regional departments.Head of the State Customs Service Maxim Nefyodov wrote about this on his Facebook page.According to him, the structures of regional departments have already been approved, the regulations on customs have been signed and the heads, who will receive the status of legal entities, have been elected. The State Customs Service has also received the approval from the Cabinet of Ministers."Now, the next step is to receive the approval from the Finance Ministry," Nefyodov said.As Ukrinform reported, the Cabinet of Ministers on December 18, 2018 decided to create the State Tax Service and the State Customs Service by reorganizing the State Fiscal Service. On March 6, 2019, the government approved regulations on these two services. First Deputy Minister of Economic Development and Trade Maxim Nefyodov won the competition for the post of head of the State Customs Service. On July 5, 2019, the Cabinet of Ministers appointed Nefyodov as head of the State Customs Service.
Procedure for opening representative offices of foreign companies in Ukraine simplified
The Cabinet of Ministers has eased the procedure for registering representative offices of foreign entities in Ukraine. The Justice Ministry wrote about his on its Twitter account.
"The procedure for opening representative offices of foreign companies in Ukraine has been simplified," reads the report. The Justice Ministry has stressed that the government continues to create favorable conditions for investors.
United States renews duty-free treatment to Ukrainian goods
U.S. President Donald Trump has signed a decree to terminate the suspension of the duty-free treatment to certain eligible articles that are the product of Ukraine.
According to the White House press service, the decision was made because “Ukraine has made progress in providing adequate and effective protection of intellectual property rights.” In December 2017, duty-free treatment was suspended because, according to Trump, Ukraine made insufficient efforts to protect intellectual property rights.
NBU lifts restrictions on purchase of foreign currency
Individuals in Ukraine will be able to buy foreign currency and precious metals without any restrictions on the amount, the National Bank of Ukraine (NBU) has reported on its website. "Continuing currency liberalization, the National Bank lifts restrictions on the purchase of foreign currency and precious metals by individuals in the equivalent of UAH 150,000 per day through the cash desk of a bank, a financial institution or via online banking systems. The requirement on the submission by individuals to banks of documents confirming the grounds for carrying out transactions on the purchase of non-cash foreign currency is also terminated," the report reads. The NBU said that such a weakening would not have a significant impact on the foreign exchange market.
First, the vast majority of individuals' foreign currency transactions do not exceed amounts higher than UAH 150,000. Secondly, the total volume of purchases and sales of foreign currency by the public today is commensurate. At the same time, net purchases of foreign currency by the NBU in the interbank foreign exchange market, due to excess supply from business and investors, reach almost $4 billion this year, whereas international reserves have been kept at $21-22 billion in recent months. According to the NBU, the liberalization of currency legislation and the strengthening of macro-financial stability made it possible to lift more than 30 currency restrictions this year, including for the population.
"The National Bank will continue currency liberalization in line with the pace of improving macroeconomic conditions and taking into account the speed of adoption and implementation of a package of laws aimed at preventing unproductive capital outflow from the country," the report said.
