Business in Ukraine: Expats’ Experience

01.03.17
Business in Ukraine: Expats’ Experience

We hope that this quick-fire quiz of successful foreign businessmen in Ukraine can help other entrepreneurs from abroad to set up their business in this country.

1 What can attract foreign businessmen in Ukraine today? What was the determinative factor for you?
Sven Henniger
German, Partner in Henniger Winkelmann Consulting
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As everywhere else in the world these are Business Opportunities surrounded by a good Business Environment in terms of Rule of Law, Taxation System, Investment Climate, excess to educated Human Resources and Funding. In this regard Ukraine is competing with all other countries for Investment/ Investors.
I got in 2008 an interesting job offer in Ukraine.
Nigel Thwaites
British, Founder and Owner of Trade House Agri Yield LLC
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Ukraine is a relatively undeveloped and unstructured market of more than 40 million people/consumers. Add to this low GDP per capita for a European country and there’s a reason to expect growth in the medium term and participation in this growth is the opportunity. There is a low cost educated workforce with high skills levels. And the country is an agricultural powerhouse still finding its way to meeting its potential.
Ivo Kyumyurdjiev
Bulgarian, Managing Director in Rijk Zwaan Ukraine
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I arrived here for the first time in 2007 when I was sent by my previous company to set up the local subsidiary. It was my first expat assignment and I was eager to prove myself as a successful professional abroad. There is so much in common between our two nations, but there are also many differences. Ukraine is a country with a huge potential in many business spheres.
Peter Kuhn
Australian, Founder of “Peter Australian Pies”
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I believe that the economy of Ukraine, with sensible and incorrupt governance which we are being informed is happening, can and will rebound. The labour costs here are possibly the lowest in Europe and a great part of the world, and allows for manufacturing of all kinds to be very competitive. The DCFTA with Europe has opened doors, but these doors are only ajar at the moment and a great deal of work needs to be done to fully open these doors. The determinative factor for my decision to come here over 3 years ago and start a food manufacturing business was the opportunity for new ideas and products to be accepted here. It was also part of my vision to eventually export my products to Europe and once the DCFTA was signed this became available to us.
2 What unexpected moments and problems did you deal with while starting business in Ukraine?
Sven Henniger
German, Partner in Henniger Winkelmann Consulting
I could write books about problems I dealt with while starting business in Ukraine. In order to dig not too much into details, I only can advise Investors, even if they are very well prepared, administrative burden in Ukraine will take a lot of time and resources. Successful foreigners in Ukraine have to be in my opinion flexible in their mind-set, stress resistant and energetic.
Nigel Thwaites
British, Founder and Owner of Trade House Agri Yield LLC
Nothing in Ukraine is necessarily easy or straightforward and this is the principle barrier to entry for most businesses. However, with the experience I gained before setting up my business and working with a partner who has a lot of local experience, there have been relatively problems to deal with. Problems mostly centre around tax and changes in the law which are difficult to keep up with. One never knows the “hidden” relationships that exist in a market and Ukraine is still a strongly relationship driven marketplace rather than service driven and this has damaged several obvious win-win deals which I have worked on.
Ivo Kyumyurdjiev
Bulgarian, Managing Director in Rijk Zwaan Ukraine
Coming from an ex-communist country myself I was thinking that Ukraine cannot surprise me, but I was so wrong! Bureaucracy in this country is amazingly complex; corruption was and unfortunately is still a big issue. Contracts are not what you think they are, so you have to be extra careful with partners/contractors.
Peter Kuhn
Australian, Founder of “Peter Australian Pies”
I was warned that I would have to bribe most government officials when establishing the business, but after the revolution in 2013 and 2014 this was somewhat watered down. So that was a nice surprise! Problems understanding the work ethic here came to the fore very early. Going forward, problems that I constantly face are the paper wars… I have to sign my name at least 20 times; sometimes twice on the one page. I believe Soviet work culture is still here!
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3 How “Business in Ukraine” experience can help an entrepreneur abroad?
Sven Henniger
German, Partner in Henniger Winkelmann Consulting
Leaving Ukraine after a couple of years back to Europe or America, you would be a great trouble shooter. You would miss maybe the problems you face in Ukraine on the daily base, but you will face definitely other issues.
Nigel Thwaites
British, Founder and Owner of Trade House Agri Yield LLC
Any experience of doing business in Ukraine is hugely valuable to an entrepreneur entering the Ukrainian market. Business in Ukraine can be an invaluable support for businesses interested in building business in Ukraine through both basic provision of information about establishing companies and starting business as well as introductions to entrepreneurs who have successfully entered the market and service suppliers who are well known and trusted.
Ivo Kyumyurdjiev
Bulgarian, Managing Director in Rijk Zwaan Ukraine
Doing business in Ukraine during the current turbulent times is extremely difficult (I doubt that in any other country at this moment exists such a bad combination of heavy economic problems, political crisis and a war going on), but on the other hand this is a priceless ‘real time education’ that you cannot get anywhere else.
Peter Kuhn
Australian, Founder of “Peter Australian Pies”
As a senior building consultant in Australia I was a problem solver. Doing business here has only heightened that skill as there are always problems to solve. You need to continually "think on your feet" here as the problems can dramatically vary, but usually need similar thinking to solve them.
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4 What would you say to those who are just going to start business in Ukraine?
Sven Henniger
German, Partner in Henniger Winkelmann Consulting
Investors should talk beforehand as much as possible with people companies which passed this step already successfully a few years ago. It’s a very interesting time in Ukraine with a lot of opportunities for those, who are ready to take a certain risk. Ukraine is maybe the only country in Europe which can grow the next 10 years easily every year by double digits. The only question is, when this is going to start.
Nigel Thwaites
British, Founder and Owner of Trade House Agri Yield LLC
Do your due diligence! Talk to as many people and companies as you can to understand common mistakes and issues. Get as deep an understanding of Ukrainian culture (business and social) as you can to be able to engage successfully with customers, employees and consumers.
Ivo Kyumyurdjiev
Bulgarian, Managing Director in Rijk Zwaan Ukraine
The country is experiencing really tough times now, but I believe in the big potential of Ukraine and its nice people – so if you want to be successful in the near future here, you have to come now!
Peter Kuhn
Australian, Founder of “Peter Australian Pies”
For those who want to start business in Ukraine I would advise to be very patient and aware. Also find a trustworthy "right hand man/woman" to assist with finding your way through the administrative jungle, paper warfare and, of course, the understanding of the vast cultural differences we face here daily in work and personal life. Also enjoy the differences, and learn from them while you also get satisfaction by adding some new ideas to the work culture here.

Photo: provided by Sven Henniger (1), Nigel Thwaites (1), Ivo Kyumyurdjiev (1), Peter Kuhn (1), shutterstock (3)

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