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Forbes: What prevents foreign investors from working in Ukraine and for what reasons do they refuse to invest in our country?

In the annual Doing Business rating, which is prepared by the World Bank Group, Ukraine takes the 80th place in the ranking of ease of doing business (between San Marino and Bosnia and Herzegovina). This is three positions higher than last year. In such global investment attractiveness ratings, indicators such as GDP, country reforms, etc. are taken into account. Although, foreign investors themselves, who come to Ukraine, often make decisions based on totally different data. First of all, information that relates directly to them personally.

At the Economic Forum "Europe-Ukraine", which was held in late January, Forbes correspondent talked to investors from Germany, France, Poland and other countries, finding out what  prevents them  personally from working in Ukraine and for what reasons they refuse to invest in our country?
Almost no other interlocutor of Forbes did not call an armed conflict in the East as the reason why they refused investment in Ukraine. Foreigners pay attention to completely different factors.

On the first place - the problem of property rights protection. Even buying a building, for example, you can not be sure that it will not be taken away. Everyone remembers how in 2007 in the office building "Millennium" on the street Vladimirskaya in Kiev, a scandal broke out: the group "Privat" tried to evict from this office of TNK BP, which had signed a lease for a few years to come. The structures of "Privat" organized a black advertising campaign: when in the morning the employees of TNK BP came to work, they saw the advertisement of a "Mourning Independent Company" in the office lobby. “Funeral Bureau”, with wreaths, on which the names of employees of the energy company were written.

Another example - the French winemaker Christoph Lacarene opened the business in Shabo, Odessa region. He rented the land for 15 years as a shareholder. But local residents, both on their own initiative and at the will of developers who decided to build on the site of vineyards, last year eradicated most of the plants, including rare perennial grapes, which are priceless for the industry.
The second problem is the permission for a temporary stay in a country that is necessary for investors' representatives and investors themselves. Such permission is issued for a period of one year, and it needs to be constantly updated. So, according to the rules of the Ministry of Foreign Affairs, citizens from the majority of EU countries can stay in Ukraine 90 days out of 180 at all without a visa. But for investors and their representatives, these conditions are not suitable: they need a temporary residence permit for doing business.

When continuing this permit, foreigners are faced with different situations, including wildlife for the western world. Moreover, the fact that the permission to stay temporarily should be continued every year may lead to refusing  to invest in Ukraine. After all, if, after a year, the investor will not have a guarantee that he will normally continue all the documents for staying in the country, who will want to invest in such a country?
They know about this problem in parliament. In October 2016, in the first reading, a bill was adopted on reducing barriers to attract  foreign investment (regarding the abolition of registration of foreign investments and amendments to the rules of employment and temporary stay of foreigners). So far, investors are waiting for the document to be accepted in the second reading. Forbes asked several deputies, the authors of the bill number 4541, about the future of the liberalization of rules for investors. But none of the interlocutors of the publication, co-authors of the bill, could not remember this document for the first time.
Then ─ investors say that there is a high bureaucracy in the procedure for obtaining a work permit. Such a document can be expected for 3-4 months, and with the "promotion" of competitors, it can not be issued at all, for example, a top manager of a foreign enterprise, causing problems to the investor.
The next problem is the inability to repatriate capital normally. All measures taken to prevent the release of money abroad, as a result, are ineffective - but put barriers to investors who can not properly return the money invested in Ukraine. "The NBU has already announced the preparation of the law" On Currency Liberalization ". Such a law is timely and it is clear that all currency restrictions have negatively affected the possibility of attracting investments into the country in recent years ", - emphasizes former member of the Council of the National Bank of Ukraine Vasyl Horbal.
"Currency legislation is outdated, it does not stimulate the market, and its reform is very slow. Investors have access, for example, to IMF reviews for each country. And when representatives of the Ukrainian authorities begin to tell investors about their intentions and investors see the IMF's assessment of the real state of affairs, the uncertainty persists. Then all the risks of the country, including currency, credit risks, and so on, become an obstacle to making a decision on investing in Ukraine ", - explains Roman Shpek, head of the Board of the Banking Association of NABU.
At the domestic level, foreigners are constantly confronted with difficulties in administrative services: from registration of residence, renting a car, registration of a car and the like. "Almost all domestic issues in Ukraine are highly corrupt, and it is often impossible to resolve them in the legislative field," said Rostislav Kravets, president of the law firm "Kravets & Partners". According to him, it is impossible without the companies that are in the field of interests of some of the officials to issue one or another permission document. It is necessary to contact the intermediaries constantly.
Also, Forbes interlocutors noted such disadvantages as a low level of English language knowledge, even in Kyiv, difficulties in opening accounts for non-residents, which require constant confirmation of each transaction, although there are no such restrictions for Ukrainians.

According to the edition of http://forbes.net.ua

Link to article http://forbes.net.ua/ua/business/1427772-ne-yak-u-lyudej-shcho-v-ukrajini-zavazhae-inoznim-investoram

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