History does not pose unsolvable problems. Ten years ago, Ukraine was in the focus of attention of all large international funds. Banks and industrial companies went over proposals for investment from the world’s largest players, money flowed into the economy. Those times are considered golden for Ukrainian business.
The last couple of years, at first glance, have become their complete opposite. “There are no large investment projects in the country. Ministries and state companies cannot give projects even for $ 10 billion. One large international fund with assets of over $ 0.5 trillion expressed readiness to invest $ 1-3 billion in Ukraine, but asked to submit $ 20 billion for it to select projects. It turned out that there was nothing to show.
Time to give up? Not so fast.
During the years of independence, Ukraine has formed a pool of companies that have invested billions of hryvnias in the country, creating production and business from scratch. In order for interest to resume, investors need to be given a reason. Projects need to be created: a second ring road around Kiev, projects of airports, seaports and everything else.
This is just a small list that lies on the surface. If you do not get carried away by the giants, it turns out that Ukraine has a huge potential for investment. High technologies instead of the forcible industry, fintech instead of traditional banking, modern R & D centers instead of conservative Soviet research institutes. Here is some market research that can be really helpful for you https://www.febgroup-ua.com/en/services/market-research-in-ukraine/.
There are a few basic points that foreign investors need to know about.
- Ukraine on the world stage is considered a country with high risks. This greatly limits the flow of investment. On the other hand, the profitability of investments in Ukraine can reach indicators several times higher than in countries with developed economies. In the medium term, we can expect an influx of investments in traditional sectors — infrastructure, energy, and the agricultural sector. The state of our infrastructure is such that without significant modernization, the development of other sectors will be questionable due to logistical bottlenecks.
- In different periods of the country’s history, the heat map of investor interest changed. Earlier, before the military conflict in the ATO zone, the eastern regions were very attractive to investors. Now the investor is going where he feels safer: this is the center and the western region. In Western Ukraine, the arrival of investors, in addition to being close to the EU, is very conducive to the progressive approach and high activity of local authorities towards investment promotion.
- The number of startups will grow in the first place. If now there are about 3,000 of them in the country, then in the coming years it could be up to 5,000. Accordingly, the number of investments will increase. According to the results of 2015 and 2016, we see that the total investment is very dependent on several transactions. Literally 1-2 sale agreements can change the whole picture. And if in 2016 the total amount of investments was $ 88 million (excluding 13 undisclosed transactions), then in 2017 were invested $ 110 million.
- Investors, when choosing a region for location, estimate (except for the infrastructure) the ease of interaction with local authorities and their assistance, as well as the mood of local representatives of the security forces. Often the choice is made in favor of quiet regions. They invest in the western regions of Ukraine – the automotive industry cluster is being formed there.
If you use this approach correctly, each region can find its own topic for specialization. Company febgroup-ua can help you to find the best choice.