INVESTING IN UKRAINE

For the last few years, many businesspersons have been focusing their attention on Ukraine considering the country as a potential and prospective domain for investment opportunities. However, they are still reluctant in their actions to make their investments. This article will give us a clear idea about the industries, which are most lucrative for investments. In addition, we will figure out what issues still stop foreign perspective investors from starting their business in the country.

Even though international investors still hesitate to invest in Ukraine, according to research there are some types of industries where they are likely to invest as soon as some certain issues are solved. Such issues imply risks that stop businessmen from starting their activity in the country. Further, we will specify what risks scare away entrepreneurs from any ventures.

Receipt of Direct Investments in Ukraine

The overall volume of foreign investment in Ukraine before military collisions accounted for 2869.9 million USD. The table shows the main industry sectors and their share of investments.

Industry	Share in USD	Share in %
Financial and Insurance Activities	1215.1 million USD	42.3 %
Wholesale and Retail Trade	599.4 million USD	20.9 %
Real Estate Operations	405.3 million USD	14.1 %
Industry	302.1 million USD	10.5 %
Information and Telecommunications Industry	119.4 million USD	4.2 %
Scientific and Technical Activities	93.2 million USD	3.2 %

The Most Profitable Industries that Attract Investors

Construction and Rehabilitation of Infrastructure

All of us understand that the building sector will be in a favorable position and become one of the most lucrative industries after the end of military collisions. The huge demand will include the following points:

• Construction supplies and engineering materials (rolled iron, concrete, reinforcement, bricks, and other building materials);
• Building machinery (push-type scrapers, bulldozers, cranes, grapple-dredgers, etc.);
• Building services;
• Detailed design engineering services;
• Raw stuff (pebble stone, crushed rock, soil, loam, clay, sand, etc.);
• Associated services and materials.

All such activity will involve the circulation of a huge amount of finances that will reach into the millions of USD. According to research, the overall infrastructure recovery will require at least one hundred billion USD. Moreover, this sum does not include industrial construction that will follow rehabilitation activities.

Agricultural Sector

Despite all the inconveniences and losses brought about by a military clash Ukraine remains one of the important suppliers when it comes to food stocks. Recent events caused a substantial enhancement in prices when grain from Ukraine was barred from shipment, which in turn led to a risk of starvation in Middle Asia and Africa. These factors have become another reason for investors to consider it as a potential place for investments. Especially among other things when a yield gain is concerned. It can be achieved using state-of-the-art technology and the opportunity for even more profound agro-processing.

Once investors start to act in this sector, Ukraine will have a chance to step up exports provided that investments will reach the amount of five to ten billion USD.

Electric Power Industry

This sector is known for its large opportunities for investments since the country requires not only cheap sources of energy but also provides perfect possibilities for the development of many related sectors. For example:

• Production and export of hydrogen;
• Extraction and refinery of domestic petroleum products;
• Natural gas output (the overall volume of prospective natural gas production will not just satisfy local needs but will allow to enter other markets including the European one);
• Development and establishment of energy storage systems. Including modernization and building of brand-new electrical generator units.

At a rough guess, the overall investment funds in the energy area will achieve 76 billion USD.

Military Technology and High Technology

Today Ukraine for obvious reasons has become a field for different military experiments and pilot schemes. At the same time, the overall volume of military developments is limited because of scarce investments from abroad. Despite this military industry has remained to be one of the most prospective industries in the world since any discovery or invention can be instantly tried straight on a battlefield.

Medicine and Medical Aftercare

One of the consequences of the war is that the number of those who require aggressive medical therapy, grafting, and rehabilitation has been enhanced. The victims include not only the combatants but the civilians as well. Due to these facts, once Ukraine receives investments in this area it will help the country to develop new medical technologies that in turn make the state a hub for medical tourists.

The Realm of Informational Technologies

IT sector indicatively has remained the only type of industry that has not lost anything since the war started and only achieved higher positions. In addition, as soon as warfare is finished there will be no obstacles for it at all. IT is surely a perspective place for investments despite any dangers in the world.

Supply and Logistics

The geographical location of Ukraine is one of the most beneficial features of the country being a neighbor and a borderland between Europe and Asia. This spot has all the chances to transform into one of the most important hubs when it comes to any type of shipment, including water, air, and land routes.

The Main Issues in Ukraine that Foreign Investors Are Concerned About

1. Government incompetence. According to research, this is the largest issue that keeps foreign investors at bay. Ukraine has not determined a consensus when it comes to a strategy for the future of the country and the area of its focus. The absence of a shared understanding of top priorities makes the state undesirable.
2. Deficiency of legal safety. Foreign executives cannot make out all the nuances in the legal sphere. Another reason for misunderstanding is the regular inconsistency of legislation when certain rules that are acknowledged as being good are changed for some other rules. Moreover, different stories in the media regarding the despotism of tax authorities in Ukraine do not inspire confidence.
3. Corruption. The corruption schemes practiced in the country are beyond any belief in the West. Foreign entrepreneurs will avoid Ukraine unless corrupt practices at every stage of authority are stopped.
4. Unavailability of free capital flows. Nobody wants to invest in a country that does not allow free withdrawal of currency from abroad. Moreover, the lack of exclusive economic zones does not attract many investors.

Such issues have become the reasons why prospective investors are reluctant about Ukraine despite a great number of opportunities in many industries in the state. Once legislation is corrected to an acceptable level and the above-mentioned issues disappear, the country will be overwhelmed with the abundance of business activities.