Tag: Ukraine (Page 2 of 6)

The desperate state of Ukrainian business reform 

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On June 4, 2015

In Bearder, Life, Ukraine

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…

  1. Everyone’s favourite database, Google failed to find any useful or meaningful information.
  2. The Ukrainian Embassy in London failed to responded to an email request for info.
  3. The Ukrainian Ministry of Foreign Affairs (economic section) failed to respond to an email request for information.
  4. The European Union Embassy in Ukraine failed to respond to an email request for information (yeah, we suck too)
  5. …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:

EU support to businessess in Ukraine.doc

And in case you’re curious, here’s how the UK government help foreign companies:

Set up a business in the UK

Update: 

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.”

See: http://www.kyivpost.com/media/pdf/db.pdf

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.”

See: http://euromaidanpress.com/2015/06/04/danish-entrepreneur-now-is-the-time-to-invest-in-ukraine/

 

The Nation Race

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On May 17, 2015

In Bearder, Life, Ukraine

A few weeks ago my colleague Yana wrote an article about a new race that will take place near Kyiv, modelled on the famously hard ‘tough mudder‘ races from the UK. The pointlessly patriotically-named ‘Nation Race’ puts participants through various physical challenges during a run around a very hilly and quite muddy course which covers part of a dirt-bike race track on the outskirts of Kyiv.

After publishing the article, Yana then declared that she would enter the race and ‘give it a go’, bravely declaring that she didn’t care if it defeated her because it would be fun. This inspired me and a week later I also declared that I would run. We could run together and support each other as two totally unprepared but enthusiastic novices.

5 days before the race I attempted the first ‘run’ of this year and covered 3km without dying. On Thursday I did 5km and it almost died. Then I hobbled to work and first Yana called to tell me she was sick and couldn’t race and then Anastasia (who booked my ticket) came to confess that she had booked me on the ‘Elite’ race!

In one day I went from being part of a ‘have-a-go’ team, to being the most un-elite ‘Elite’ athlete who’s ever entered a race.

“F**k that!” I said. “I’m not doing it”.

However, over the next two days we hatched a plan which would allow me to enter the ‘standard race’ (albeit unofficially) and so I decided to give it a go. I warmed-up with a hotdog and a coffee and at 9:30 on Saturday morning I was running around a muddy obstacle course on a hill outside Kyiv. It was hard (as expected) but not impossible and amazingly I survived the full race with only one penalty (30 burpees) for not climbing a rope. About an hour later I jumped through some fire and ran through a large muddy puddle to the finish line accompanied by a girl who had travelled from Russia to participate.

My reward: a free t-shirt, a banana and an Obolon beer.

Nice touch!

I gave the banana to Anastasia and drank the celebratory beer.

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What happens if you break the immigration rules in Ukraine?

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On May 3, 2015

In Ukraine

Terminal D at Boryspil Airport is a large, modern and newly constructed terminal for international flights to and from Ukraine.

Built in 2012 at a cost of UAH 1.661 billion (USD 208 million) it apparently has the capacity to process 3000 passengers an hour.

Quite how is anyone’s guess.

In this post I will describe what happened this morning before boarding my flight to Brussels and is a good example of how inefficient the airport actually is.

However, before I start, I need to provide some background information on Ukraine’s immigration rules which, it has to be said, are considerably more open and forgiving than British or EU rules.

If you’re in a rush and just want to know what happens if you over-stay your 90 day allowance in Ukraine, then you can skip this section and just straight to ‘The Rube Goldberg penalty machine’

Background: The power of music

Following Ruslana’s success in the Eurovision song contest in 2004 Ukraine decided to remove existing visa requirements to make it easier for foreigners to attend the event in Kyiv and to visit the otherwise overlooked (and relatively poor) country.

Such was the success of the tournament that Ukraine never reintroduced the visa regime and has allowed us foreigners to visit for free for up to 90 days in any six month period. Even then, for many years and until sometime in 2011 this rule was rarely enforced. The only requirement was that you left the country after 90 days and got a stamp in your passport – then you were allowed to return without a problem.

Naturally, most foreigners played the system by making ‘border runs’ every 90 days to Moldova or Belarus where you could usually buy a stamp without actually leaving.

However, under the Yanukovich government, the rules were tightened in 2011 and border guards started enforcing the ’90 day in 180’ rule – essentially meaning that you can stay for 90 days in any six month period – thus ending the unlimited free entry available via the border runs.

All fair and well and about time too given the widespread abuse of the system.

However, this is what you have instead…

The Rube Goldberg penalty machine

The problem with the 90 day rule is that its hard to monitor. For people who travel in and out of Ukraine almost constantly, then its pretty hard to keep track of the number of days stayed because its an ever shifting variable and you first have to deduct 180 days from your date of departure and then calculate the total days in Ukraine between the two dates. It’s easier said than done and in practice (and given the relatively low fine incurred for breaking the rule) I usually estimate how many days I’ve stayed in order to comply.

It’s just a quick fine and you’re on your way, right?
Wrong.

You see, it’s not just foreign visitors who struggle with the calculations, all the border guards have to do it manually as well and for every single foreigner who comes through their border posts. So if, after a 10 minutes counting-session, they suspect you might be close to our over the 90 day limit, you have to do the ‘walk of same’ and sit outside the ‘office of judgement’ on the ‘seat of despair’.

It doesn’t matter if you have actually over-stayed or not, you just have to be close and you’ll be forced to endure this inexplicably lengthy procedure.

Today was not my lucky day, so after 5-10 minutes at the border gate I was taken to the office of judgement and took my place on the seat of despair.  After a further 10 minutes the guy cam out and explained that I had indeed overstayed and he needed my address in Ukraine and in Oxford so he could produce some form. So far, so good and as I was in clear breach of the rules I didn’t mind. Rules are rules and I don’t mind paying the official penalty for breaking them. However, from here, things went from bad to worse.

After sitting there for an additional 30 minutes I started to get nervous that I would miss my flight, so I went to enquire about the ‘form’ and I found a guy slowly typing (I mean slower than a tortoise) a whole pile of these documents while chatting to other staff and dealing with a bunch of other border guards who wandered in and out for unknown reasons.

I assume every one of the people in the pile also had a plane to catch and were also quite stressed.

I made some ‘I don’t have much time’ gestures and some 30-40 minutes since arriving at the border post, I