Ukraine: Hot Destination
One reason Western European investors have looked to Ukraine is simply its location. It seems a natural next step for multinationals whose presence has already extended as far as Romania and Bulgaria, which acceded the EU on January 1, 2007. Moreover, it is a good place from which to service the EU. Ukraine also uses EU guidelines in some of its economic rules and standards. And, since it has a Free Trade Agreement with Russia and the other CIS members, some international companies use it as a platform to export in both directions.
Ukraine has plentiful natural resources itself and also is an important transit country for energy and products between the EU and Russia or Asia. Three out of nine trans-European transport corridors run across Ukraine, and it has an extensive Black Sea coastline with several major ports. Moreover, the government has made improving the transport infrastructure a top priority.
Apart from Ukraine’s strategic location, many investors like the fact that it is itself a large emerging market. It has over 46m inhabitants, fast-growing consumption, low saturation, and little competition in many sectors. As the market matures and becomes filled with more and more businesses striving for higher professional standards, there will be opportunities for consultants, accountants firms and lawyers.
Even with numerous risks and bureaucracy, it is an increasing trend for an initial foreign investment in a business to be made by a local entity, but for a strategic foreign partner to come on board several years later with know-how, technology, development plans, experience and capital.
