Economist names the most promising areas for foreign companies in Ukraine

Foreigners have opened 2,652 companies in Ukraine since the beginning of the full-scale invasion, according to Opendatabot. Turkey, Uzbekistan, and Poland are among the leaders. The most promising sectors in Ukraine are agriculture, construction, and the financial sector.

Ilya Neskhodovskyi, an economist and head of the analytical direction of the ANTS network, discussed this on Hromadske Radio.

«It is not so much the number of foreign companies that should be assessed as the amount of foreign direct investment coming to Ukraine. We can register five or ten thousand companies, but if the volume of investment is only hundreds of millions of dollars, the effect on the economy is minimal. But Ukraine is facing a serious risk from Russia’s military aggression, so in this context, such figures are definitely a positive result».

According to him, foreigners prefer areas of activity where the risk is lowest or which remain the most promising. These are agriculture, construction, and the financial sector. Trade also remains important.

«One of the largest Polish companies that has opened in Ukraine is a trader, which means it opened here to buy Ukrainian agricultural products and supply them to the Polish market. Turkish companies have two main areas of focus: non-financial services and construction. Some people open companies to participate in the reconstruction and rebuilding that is taking place even now, during the war. They expect that after the war, there will be significant amounts of money coming to Ukraine as reparations, and preference will be given to those firms that are already present in our market and have the relevant contracts».

He explains that the war in Ukraine has changed the logistics, resulting in limited access to certain markets with which Ukraine used to trade. As a result, cooperation with the European market has expanded. Companies are coming to Ukraine to sell their products and buy Ukrainian products.

According to Neskhodovskyi, it is very difficult to calculate how much money foreign companies have brought to the state budget of Ukraine. Nevertheless, their presence definitely has a positive impact on the country’s economic development.

«The revival of foreign trade always has a positive impact on the country’s economy, especially when investments come in and new businesses are created. Those companies that are already operating in Ukraine are also opening new lines, which is a big plus for us, as it means jobs. Companies are also opening their logistics businesses.

The only issue is another trend: when Ukrainian companies move their facilities and branches abroad. If this happens without reducing activity in Ukraine, it is a big plus, but there is a negative trend when companies move to other countries due to the unfavorable business climate in Ukraine», — the economist says.