Doing business in Ukraine

Deregulation of business activity has become one of the reform priorities for Ukraine in 2012. It was conducted in four major areas – simplifying procedures for opening and closing a business, simplifying property registration, lifting the tax burden, as well as reforming public services system and narrowing state control for businesses. The results and prospects of business deregulation were addressed by the President of Ukraine Viktor Yanukovych in his annual message to the parliament of the country

Ukraine reduced the number of license-restricted business activities, introduced beta version of the single state administrative services website, opened 114 regional centers for administrative services. The minimum authorised capital and the requirement to notarize business statutory documents have been dropped. The option of online business registration has made the process faster and cheaper.

Some of the major conveniences for businesses are related to reporting. Companies no longer report opening a bank account to the state, the banks are doing the job instead. Medium and large companies in Ukraine are now able to conduct electronic filing and payment. Since 2013, businesses provide annual income reports, while previously the reports were submitted quarterly.

Ukraine is also broadening the application of automatic VAT refunds. Currently, more than half of refunds is paid out automatically. The ongoing tax reform has led to income tax decrease to 19 percent in 2013. As part of the reform, Ukraine introduced a VAT relief for software operations, established income tax for companies working in this area at 5 percent, as well as decreased license fees for hydrocarbon producers.

Additionally, Ukraine simplified bankruptcy procedures by limiting the maximum duration of liquidation (no longer than one year). The announcement on bankruptcy proceedings in a company will be published by the official website of the High Commercial Court of Ukraine.

Aiming for further business deregulation, the Eastern European country aims to provide electronic registration of businesses, decrease paperwork by eliminating the need for businesses to place multiple inquiries to state bodies, and introduce the procedure of closing a business by declaration.

Dynamics of Ukraine’s rating by category:
Company registration – an increase of 66 positions – from 116 to 50.
Construction permits – a decrease by 1 position – from 182 by 183.
Connecting to electrical system – an increase of 4 positions – from 170 to 166.
Property registration – a rise of 19 positions – from 168 to 149.
Access to loans – unchanged – 23 position.
Protection of investors – fall by 3 positions – from 114 to 117.
Taxation – an increase of 18 positions – from 183 to 165.

The President of Ukraine Viktor Yanukovych stated that by 2014 Ukraine would secure a place among the first 100 countries on the World Bank’s Doing Business report. According to the President, the country has to simplify licensing procedures and decrease the number of audits of businesses by the authorities.
Importantly, in 2012 Ukraine climbed 15 spots to reach the 137th place on the easiness of doing business list. Yanukovych, however, believes that the state could have advanced even further. As even after such a significant jump in the rankings, Ukraine holds position between Lesotho and the Philippines.

Singapore became the most favorable country for business, and the top three list also includes Hong Kong and New Zealand. The list of top five countries complete the U.S. and Denmark. The last in the ranking are the Republic of Congo (183 place), Chad (184) and Central African Republic (185 place).
Among the countries of the former Soviet Union, the highest place holds Georgia (9th). It is followed by Estonia (21), Latvia (25) and Lithuania (27). Kazakhstan is located at 49 position, Belarus – at 58, and Uzbekistan at 154. Russia in this year’s rankings occupies 112 position – between Palau (111th place) and El Salvador (113 seats).

Ukraine’s improvement in starting a business, registering property, and paying taxes has been highlighted by Doing Business 2013 World Bank report.
According to the document, Poland and Ukraine were the two countries of the Central and Eastern Europe that demonstrated most improvement in the area of doing business.

SOURCE Worldwide News Ukraine

Read: Doing Business in Ukraine 2013 report

You might also be interested to read this:

Close Comments

Leave a comment

Your email address will not be published. Required fields are marked *