Kremenchug, Ukraine - June 3, 2017: Experienced blacksmith teaches the craft of a young man during festival. Photo credit: Shutterstock.com
The World Bank’s Doing Business report ranks economies on their ease of doing business, from 1–190, “...by sorting the aggregate distance to frontier scores on 10 topics, each consisting of several indicators, giving equal weight to each topic.” In 2016, Ukraine landed in 80th position, with further improvement expected, for ease of doing business — the closer to 1, the more conducive the regulatory environment is to the starting and operation of a local business.
Thanks to EasyBusiness, an Atlas Network Partner based in Kyiv, Ukraine, doing business there is easier than it once was. EasyBusiness works to improve the business climate through legislative initiatives, education, and public outreach.
Being an entrepreneur in Ukraine has in the past been hindered by the requirement for business to receive seals (like a notarization). EasyBusiness organized roundtable discussions to take charge of the conversation surrounding the issue, eventually changing the opinions of entrepreneurs and government officials alike. A new law went into effect on July 19 that introduced fines for state and local governments in cases of illegal demands of documents certified by a seal, making it much easier to go into business in Ukraine, according to EasyBusiness Fundraising Manager Inna Dzyndra.
EasyBusiness also worked with the Kyiv City Council and Deputy Olga Balytska to develop a bill aimed at decreasing city shared tax on newly constructed property. The tax was successfully reduced from 10 percent to 2 percent for non-residential properties, and from 10 percent to 4 percent for residential properties. So far, this has resulted in reduced corruption in starting a business, a lower tax burden for young businesses, and has set an example for other cities across Ukraine that are now also working to eliminate this same type of tax and a more business friendly environment.
“In this situation, the consumers are also in a winning situation, as earlier this costly burden of high city shared tax rate fell in their pocket; however, now there is no such necessity. Hopefully, this improvement will make business work even more effectively,” said Sergey Ovchinnikov, partner at Ukraine Turnaround Real Estate Fund.