As the owner of a small IT company from the UK which has been working with Ukrainian freelancers for the past two years, I recently decided increase my support for Ukraine and commit to opening a local branch of the company here in Kyiv. By doing so, I should, in theory be able to hire full-time staff and pay my share of taxes to support the desperately underfunded national authorities.
It feels like the right thing to do and when I registered my company in the UK a few years ago I had been pleasantly surprised with how easy it was. I did one Google search, made one phone call and sent one email. The next day, my company had been registered.
Of course, this being Ukraine and me being a foreigner etc I expected more than a little bureaucracy, but with so much talk of civil, political and economic reform I was confident that doing business here would be an easier process now than it was before the revolution. Besides this, I also read an article recently in the Kyiv Post about new rules which had been introduced in support of IT and tech companies to simplify registration and encourage them to invest here. This is exactly the kind of motivation I needed.
From this point on and for the past two months I have failed to progress even once millimeter towards opening our Ukrainian office.
Unwilling to pay a local lawyer for basic and public information on how to register a company, I set out to find the info myself. I simply wanted to know: How do you open a small business in Ukraine? and what support is available for small companies wanting to invest in Ukraine?
Here’s what happened…
- Everyone’s favourite database, Google failed to find any useful or meaningful information.
- The Ukrainian Embassy in London failed to responded to an email request for info.
- The Ukrainian Ministry of Foreign Affairs (economic section) failed to respond to an email request for information.
- The European Union Embassy in Ukraine failed to respond to an email request for information (yeah, we suck too)
- …and the UK Embassy in Ukraine responded but didn’t have any info they could provide (other than a link to the same article I had read in the Kyiv Post). Thanks anyway guys.
After two phone calls and two or three more emails (a common requirement when dealing with the EU Embassy in Ukraine) I finally received the first ‘useful information’ from a guy called Boris Filipov who works in the Private Sector Development section of the Embassy- a list of support programmes aimed at Ukrainian SMEs hoping to trade with the EU.
This is almost what I need, and may indeed be useful if I ever manage to become a Ukrainian SME but that’s proving to be way harder than it should be. In fact, it either doesn’t exist in English, it is being guarded as a national secret, or perhaps most likely – it is only available via an expensive lawyer or business association.
All of this is less than ideal.
If the Ukrainian authorities have indeed simplified things for foreign IT companies, then what is the benefit of this if finding info on the new simplified rules is near impossible? (and dear Ukrainian authorities why should I invest in Ukraine (and help save your arses from bankruptcy) if you can’t be bothered to reply to my emails?)
As for the EU and UK delegations, is it really so hard to provide one or two pages of info that would support your own companies wishing to expand to Ukraine? Wouldn’t this be a smart idea and a simple way to ensure that the millions of EUR of aid being poured into Ukraine by the EU (entirely funded by European tax payers such as myself and my company) go to benefit us – your citizens and businesses – as much as it benefits locals?
Has anyone from the ‘competent authorities’ ever setup or run a small business? Are plans being made to change the situation? Time will tell, but for now I haven’t given up on my plans for Ukrainian business success. I will keep searching for information (next stop the various business associations) and when I find it, I will share it here for the benefit of anyone and everyone else who believes in Ukraine and wants to do business here.
In the meantime, here’s the info I received from the EU delegation:
And in case you’re curious, here’s how the UK government help foreign companies:
It seems like I’m not the only one having trouble. Since writing this article on Wednesday, I have seen two other articles published this week and both complaining about the same problem.
The first is the Kyiv Posts ‘Doing Bussiness in Ukraine’ leaflet/magazine in which a young Ukrainian entrepreneur complains about difficulties opening a business.
“Ukraine needs adequate procedures for company registration and a fair culture of doing business,” says 23-year-old Pavlo Matvienko, chief executive officer at Chooos. “In Ukraine, in order to register a company you have to wait in long queues for weeks.”
The second is an interview with a Danish guy who runs an Engineering company here.
“What legal difficulties did you experience when opening your company in Ukraine?
In Denmark I can go online create a company in 5 minutes with my digital signature. Here it takes 3-4 months, and that’s the problem. But this will get better. If you are in business, your goals are also set on the long-goal horizon. And if you have a commitment to investing in Ukraine, it’s then it’s just things you have to accept. I must admit that I was frustrated when we started, but things managed to work out.”