“A powerful signal for investors”

Ukraine continues improving business environment for local entrepreneurs, despite the economic crisis and political perturbations. As a result, this year Ukraine appeared among the top 100 countries with the highest ease of doing business index. Ukraine went up 16 positions and occupied the 96th place in the new report of the World “Bank Doing Business 2015: Going Beyond Efficiency.”

The global ranking of ease of doing business is led by Singapore. New Zealand, Hong Kong (the People’s Republic of China), Denmark, South Korea, Norway, the US, Great Britain, Finland, and Australia form the top 10. For comparison: Georgia ranks 15th, Poland – 32nd, Romania – 48th, Belarus – 57th, Russia – 62nd, Moldova – 63rd.

The improvement of Ukraine’s position in the global ranking took place thanks to the achievement of significant progress in areas of property rights registration and taxation, World Bank experts say. Ukraine improved its ranking for over 25 positions according to these two factors. For example, in 2013-14 Ukraine made taxation easier thanks to the implementation of digital system of application and payment of payroll tax. So, the number of tax payments was decreased from 28 to 5, and time spent on paying taxes decreased from 390 to 350 hours.

“It is pleasant to see that despite the crisis and everyday problems, the government started the implementation of the urgent structural reforms, which bring Ukraine closer to the most developed economies in the current global Ease of Doing Business ranking,” said World Bank director for Belarus, Moldova, and Ukraine Qimiao Fan.

According to him, Ukraine still has things to work on. For example, in such areas as connecting enterprises to electricity networks, leading of external trade activity, and settling the insolvency problems, Ukraine occupies the lowest places in the ranking among European and Central Asian countries according to these indices. For example, connecting an enterprise to an electrical grid in Kyiv lasts 277 days on average. This is one of the worst indicators in the world, since only five countries spend so much time on it.

At the same time, import and export in Ukraine still remain one of the most time- and money-consuming activities in the region, which also affects business activity in the country in a negative way. For example, in Ukraine export of a standard container abroad will cost 1,880 dollars, while in Albania this operation costs almost twice as little – only 745 dollars.

COMMENTARY

Anna DEREVIANKO, executive director, European Business Association:

“If we talk about the powerful signal for the international community, this is undoubtedly a positive thing. Ukraine is moving forward. And this positive signal must spread all over the world and portray us with more advantages in the eyes of potential investors and partners.

“But business has not felt abrupt positive changes yes. Perhaps, this is accounted for by the fact that after all, we are not in top 10, but in top 100 countries according to the ease of doing business. A lot has to be done in Ukraine to get to a higher position, so that business could feel significant changes. This applies to corruption issues, business deregulation, injustice in courts. And it seems to me that the parliament and cabinet of ministers are working on it.

“The World Bank report is based on legislation changes in comparison with the previous year. So, things were done last year and at the beginning of this one provided Ukraine’s rise in the rating. And what is being done right now is a foundation for the next year’s report. It will be interesting to see which place in the ranking Ukraine will secure in the future. If the positive dynamics is preserved, it will be a serious step forward. For this Ukraine has to solve issues related first of all to business deregulation. Also issues related to inspections, changes in tax system, and protection of property rights will be crucial.”