Ukraine is on its way to sign the Association Treaty with European Union, a free trade Agreement will be a part of the Treaty. If everything is OK, the Treaty will be signed by the end of the year. So, potential investors and partners of Ukrainian companies will have more reasons to increase their activity inside the country.

Our country was always attractive for foreign business due to its geographic location, essential resources and relatively large internal market. Most often it is considered a transit country, a bridge between Europe and Asia. The shortest way from Europe to southern Russian regions, Central Asia and many other Asian countries lies through Ukrainian territory. Automobile roads are often and fairly criticized but generally the infrastructure level is sufficient and quite comparable to neighboring countries, the level of the Internet and other kinds of electronic communication development is even higher than average European one.

Nevertheless, foreign business activity is very low here being incomparable with our EU neighbors’. The main cause of this is that our state has never paid sufficient attention to business climate and effective private property defense. It is true that in Ukraine you can often face corruption in courts and other state bodies, that the legislation is complicated and mazy, many procedures take time and resources inappropriately. For example, transport companies normally give their customers one day for customs clearance in EU countries and two days in Ukraine. This came just from practice, and there are lots of similar examples.

Now Ukrainian economics is very weak, industrial production has fallen within the last two years, the GDP level is frozen, foreign trade balance has been negative for many years. But, a blessing in disguise, this makes Ukrainian government be more sensitive to the needs of business. Lots of programs exist nowadays to simplify and to make the work of state bodies more transparent. It has not changed the climate cardinally yet but some results are obvious.

To be objective we have to mention the opposite side of well known problems for business in Ukraine. The wages and salaries level, prices for electricity, natural gas and water are essentially lower than in European Union. At the same time, the prices for goods are higher. So, even considering corruption constituent, business profitability is rather higher here. That is the main reason why money costs so much here, domestic companies get bank credits under 12% a year in hard currency. Therefore, it is absolutely clear why many different foreign companies already work in Ukraine and intend to expand their business here. Profit beats risks.

Signing the Association Treaty with European Union, Ukraine undertakes to follow common European rules of providing business conditions. But even if something terrible happens, and the Treaty will not be signed, Ukraine has really no other way than to provide sound business climate. So, start your business in Ukraine or, at least, get prepared.$CUT$