Why starting a business in Ukraine is a good decision

In previous years, eCommerce in Ukraine was intensively developing, and even a full-scale war did not break this trend. This business area continues to be active and opens new perspectives for entrepreneurs. In our article, we will tell why starting a business in Ukraine is a good decision.

In previous years, eCommerce in Ukraine was intensively developing, and even a full-scale war did not break this trend. This business area continues to be active and opens new perspectives for entrepreneurs. In our article, we will tell why starting a business in Ukraine is a good decision.

Development of eCommerce in Ukraine

Ukraine is the 53rd largest eCommerce market. The annual revenue of Ukrainian e-commerce stores in 2021 was approximately $3.7 billion. In the same year, Ukrainian e-commerce increased by 28%, when, e.g., the world market grew by 18%. E-commerce in Ukraine is expected to continue its growth in the coming years. The country's development, including the Internet development, contributes to this growth.

Statista's latest data shows that 81% of Ukraine's population uses the internet. Analysis of consulting agency Kepios indicates that the number of internet users in Ukraine will grow by about 2% from 2021 to 2022. It was predicted that the number of users would increase. It is very significant from the perspective of e-commerce. It is a well-known fact that the penetration of e-commerce directly depends on Internet penetration.

What makes Ukraine attractive for doing business

Ukraine is a technologically advanced country with remarkable progress in many areas. At the same time, the country's level of development has not yet reached its peak, and there remains much growth potential. Ukraine is constantly working on innovations and improvement of current processes. Many products are relatively new and developed according to modern concepts. Developers did not have to maintain old technologies that users were accustomed to, as is often the case in other countries. This situation was similar in logistics, banking, IT and many other areas.

Developed logistics infrastructure

Logistics is one of the most developed areas in Ukraine. The logistics infrastructure has improved significantly in recent years, as has the service. The main postal operators like Nova Poshta and Ukrposhta are constantly working on the development and expansion of their networks. The result is the fastest possible delivery of goods. For example, customers receive a parcel from an online shop the very next day after ordering. People can use a post office at their home or go to the post office, which is almost always within walking distance. Another logistics operator, Meest Express, instead of forming a network of branches, works with supermarkets, shops and pharmacies to issue their parcels. This variety of delivery options makes logistics fast and convenient.

Convenient online banking

The banking system in Ukraine is client-oriented, which facilitates business operations. There is no need to execute many documents or even come to the bank in person to obtain a card. Many Ukrainian banks pay special attention to online banking - this is reflected in accounts management through mobile applications, online loans, convenient online payments, etc.

One striking example of the modern Ukrainian banking system is the country's first mobile bank - Monobank. It moved all banking processes to its mobile app, and new features appear in it all the time. For example, the bank offers a 'Buy in Portions' function, which splits the cost of goods into portions and allows you to buy them in interest-free installments.

Qualified specialists

Ukraine is known for its highly skilled labor market. Before the full-scale russian invasion, the Ukrainian IT industry had been growing every month for a long time. At the beginning of 2022, exports of IT services were at a record high of $839m. According to the NBU, this is 43% more than for the same period in 2021. Ukrainian developers are involved in creating top-notch digital products worldwide and have long proven to possess high qualifications.

You can find specialists at all levels to implement any business idea in Ukraine. Ukrainian technical specialists and marketing and sales managers have all the skills that modern business needs and are in demand not only in Ukraine. At the same time, recruitment costs will be lower than in other European countries.

A big market

Before the all-out war broke out in Ukraine, there were 41 million people. It made the country a big marketplace with all kinds of needs. Businesses in Ukraine will always find their niche, and so will its customer. Now, the penetration of e-commerce in Ukraine is 47%, which is lower than in other countries like Poland, where it is 57%. It is predicted that in 5 years, e-commerce penetration in Ukraine will reach nearly 60%, while in Poland, the jump will not be as strong, and the figure will rise to 58.5%. Businesses already starting in Ukraine will take part in shaping the market, and this will give them a better starting position. There will be an opportunity for the companies to get their voice heard early on by winning over their target audience.  

Taxation system and an easy way to start a business

Ukrainian legislation offers various organizational and legal forms of doing business. Business owners are free to choose the taxation system, depending on income. There is a simplified system for small businesses, which makes record-keeping easier. Taxes for business in Ukraine are not the lowest in Europe, but the scheme of their formation is understandable. Individuals can figure out the taxation system without any additional assistance.

Over 170,000 entrepreneurs and more than 23,000 companies were registered in Ukraine in 2022. Launching your own business is facilitated by convenient business registration. You can register your business online in Ukraine in a short time. The electronic residence law will also take effect on April 1, 2023, and foreigners will be able to conduct business in Ukraine more freely. The law provides for

• obtaining e-resident status;

• possibility to register as a group 3 entrepreneurs without a physical presence in Ukraine

• payment of the single tax in the amount of 5% of the income;

• online opening of a bank account for entrepreneurial activities

• automation of taxation and accounting for e-residents.

Numerous online sales platforms

Another advantage of doing business in Ukraine is many online sales platforms. In addition to your website, you can use Instagram and Facebook because these social networks are popular among Ukrainians. Often online retailers do not even create their website but make a shop page on a social network. You can also sell your goods on the marketplaces Kasta, Rozetka, Epicenter, Prom and Shafa. They are all well-known to customers and attract a lot of traffic.

Affordable internet and mobile communications

Ukraine leads the list of countries with the cheapest internet access, according to Numbeo's global database. Mobile phones and LTE are also low-cost and accessible. It allows you to minimize your connectivity costs and save significantly.

Conclusion

Ukraine has a favorable business environment for different kinds of businesses. The country has a well-developed technological base, qualified specialists and all tools an entrepreneur needs. The constant development of technologies allows for increasing the penetration of e-commerce in Ukraine. This way, online shops have room to grow. Become part of the Ukrainian market and create your own successful business.