Improving Investment Climate in Ukraine

Investment Climate Advisory Services Project in Ukraine

2007 - present

Supported with funds from the governments of Canada, the Netherlands, Sweden and Switzerland

The project is designed to contribute to the creation of a regulatory environment that supports the development of small and medium enterprises and improves the overall business environment in Ukraine. IFC provides customized advice on how to improve and simplify regulations and encourage and retain investment, helping foster competitive markets, economic growth, and job creation.

The Challenge

Ukraine has significantly improved its regulatory system since independence. However, much remains to be done. Healthy regulatory reform is critical to leveraging the full potential of Ukrainian businesses and increasing their competitiveness by reducing the regulatory burden and simplifying conditions for business development. An over-regulated permit process, excessive and ineffective inspections, and overly prescriptive and costly technical regulations systems are among the main barriers to business development in Ukraine. Agribusiness, for example, is underdeveloped in Ukraine, realizing only 22 percent of its potential output, largely because of the regulatory issues outlined above.

IFC Approach

• Help develop legislation in close cooperation with government agencies to ease conditions for doing business in Ukraine and improve the investment attractiveness of local businesses
• Monitor the business environment and investment climate of the country by conducting regular surveys to assess the impact of government reforms
• Increase awareness about enacted reforms among key market stakeholders by relationship-building and development of information campaigns. This includes conducting seminars and roundtables for government officials, business associations and representatives of the business community and media

• Provided advice to 641 entities
• Provided consultation to more than 686 government officials
• Contributed to the drafting of 52 new laws/regulations
• Developed 7 reports, including "Investment Climate in Ukraine as Seen by Businesses," "Reforming Food Safety Regulations in Ukraine: Proposals for Policy Makers," and “The Cost of Tax Compliance in Ukraine" reports
• Distributed over 263,629 copies of project materials
• Conducted over 46 workshops/training events for more than 2,577 participants
• Helped enact 26 recommended laws/regulations/amendments/codes, including a new law simplifying business entry, permit and licensing procedures. The law, "On amendments to certain laws of Ukraine simplifying conditions for doing business," adopted in late December 2009, is expected to cut costs for the country’s private sector by over $23 million annually.
• Helped facilitate business permitting, licensing and inspection reforms

For more information please contact: Lisa Kaestner, Regional Business Line Leader, LKaestner@ifc.org