White Book of Reforms 2025. Chapter 6. Business Environment

Figure 6.1 shows that in 2015 the government implemented many significant reforms, These reforms were primarily focused on deregulation and elimination of rent-seeking opportunities. Thus, the government liquidated the state waste management enterprise “Ukrecoresursy” used purely for corruption purposes, halved the number of licences, and simplified procedures for obtaining permits and registration. In 2015-2017, the government canceled many outdated Soviet standards and regulations that had long become irrelevant but allowed oversight bodies to create problems for businesses. It also finally abolished state regulation of prices for a number of so-called “social” goods, such as bread and other basic groceries. 

However, deregulation does not mean that law enforcement agencies have completely stopped pressuring businesses, as this would require comprehensive reform of the law enforcement and judicial systems (see Chapters 1 and 3). Therefore, it is not surprising that the adoption of several laws referred to as “Stop Masks-Show” did not put an end to this practice.

Later reforms were more incremental but, taken together, these incremental steps created significant change. For example, during 2019-2020, the government passed many regulatory acts on the protection of intellectual property rights. Each of these regulations received low grades because they addressed rather narrow issues but together they are essential for Ukraine’s European integration. Since 2019, the digitization of interactions between the state and businesses has significantly accelerated.

We also recorded several anti-reforms: tax allowances for industrial parks and the “white business club” law, which (again) created an unequal playing field for businesses. Besides tax allowances, the government invested into industrial parks nearly UAH 1 billion in 2024. This direct and indirect investment is unlikely to bring profits.

International organizations recognized the results of reforms. For example, Ukraine rose from 112th place in 2014 to 64th place in 2020 in the Doing Business Index (after 2020 the index was discontinued due to potential data manipulation in favor of China). Table 6.1 shows that Ukraine significantly improved its indicators in certain aspects of doing business, but in other areas, such as connecting to electricity or contract enforcement, Ukraine, as of 2019, lagged far behind the leaders.

	2015	2016	2017	2018	2019	2020	Change 2020/ 2015, %
Total	61.52	63.04	63.9	65.75	69.1	70.2	14.1
Starting a business	87.35	93.88	94.4	91.05	91.1	91.1	4.3
Getting construction permits	75.29	61.36	61.42	75.8	77.2	81.1	7.7
Connecting to electricity	32.65	54.84	58.45	58.8	59.2	62.5	91.4
Property registration	74.82	69.44	69.61	69.61	70	71.3	-4.7
Getting credit	75	75	75	75	75	75	0.0
Protecting rights of minority investors	48.33	53.33	56.67	55	66	68	40.7
Paying taxes	70.33	70.69	72.72	80.77	79.4	78.1	11.0
Cross-border trade	53.96	63.72	64.26	64.26	77.6	80.1	48.4
Enforcing contracts	66.25	57.11	58.96	58.96	63.6	63.6	-4.0
Bankruptcy	31.17	31.05	27.5	28.24	31.7	31.4	0.7
Position in the rankings	96	83	80	76	71	64	–

Business environment reforms in 2014-2019

Simplification of licensing, registration, and getting permits

In 2015, Parliament passed a new law on licensing which halved the number of activities subject to licensing to 29 and significantly simplified the licensing procedure. It also passed a deregulation law that eased the process of starting a business and a number of procedures for obtaining permits. Further simplification of starting a business was facilitated by the introduction of a “silent consent” during taxpayer registration (i.e., an entrepreneur needs to inform the state that they are starting a business rather than wait for the state’s permission). Another law simplified the reorganization of enterprises and allowed entrepreneurs to reorganize branches without dismissing employees and bearing the respective costs.

In early 2015, the government simplified the process of obtaining permits for mining and work permits for foreigners and accelerated the passage of imported goods through the phytosanitary control system. A little later, it canceled the mandatory registration of a number of heavy and light industry products as well as fuel types that constitute about 90% of the market. 

In August 2015, the Cabinet of Ministers approved a list of government agencies authorized to issue licences for business activities that require licences. Over the next few years, the government approved licensing conditions for a number of activities, such as security companies or tour operators. In 2016, online submission of licence applications was allowed, and later, the government made stamps unnecessary and allowed the use of electronic signatures in almost all cases.

In 2016, the government canceled the mandatory registration of foreign investments, which had no practical purpose and only complicated business operations. Parliament allowed Ukrainian aircraft manufacturers to establish joint ventures with foreign companies (excluding companies from the aggressor states, i.e. Russia and Belarus). 

New procedures for state registration of property rights were aimed at reducing opportunities for raiding, i.e., illegal “re-registration” of property to another party. The new rules increased the accountability of notaries for facilitation of raiding and obliged registrars to notify owners about any applications with respect to their property. At the same time, the Ministry of Justice launched permanent monitoring of registrar actions. Earlier, the government provided notaries more freedom in property rights registration while also introducing mandatory liability insurance for them.

Decommunization of standards

One of the first changes adopted in 2015 was the new law on technical regulations and conformity assessment, which established new rules for developing product technical regulations and requirements for conformity assessment agencies, bringing them closer to European standards. This was the first step toward creating a national product quality assessment system whose conclusions would be recognized in the European market. At the end of 2015, the Ministry of Economy eliminated 12,500 Soviet standards (de jure, they weren’t mandatory, but many enterprises continued to use them by default). A little later, it canceled Soviet sanitary requirements. Finally, at the beginning of 2019, another remnant of Soviet times was canceled — the requirement that enterprises maintain a paper book of feedback and suggestions (in 2023, the book was canceled for service providers too).

Government supervision and compliance 

As in many other areas, reforms in government supervision aimed to reduce the discretion of public officials during their interactions with businesses. To this end, an integrated automated government supervision system was created, and a risk-oriented approach to state supervision and the “presumption of innocence” for businesses were introduced.

Several initiatives aimed at limiting the ability of law enforcement agencies to exert pressure on businesses yielded only limited results. In 2016, the government deprived the State Fiscal Service of the powers to open criminal cases against enterprises without evidence, reducing the opportunities for the tax police to attack businesses. 

In 2017, Parliament passed the “Stop Masks-Show” law, intended to reduce pressure of law enforcement agencies on businesses. Among other, the law allowed video recordings during searches of businesses. The law was not very effective, so the following year Parliament had to pass the “Stop Masks-Show-2” law, which simplified the process of holding law enforcement officers accountable for unlawfully opening criminal cases against businesses. However, even after replacing the tax police with the Economic Security Bureau in 2021 (see Chapter 1), pressure on businesses remains. Perhaps the situation will not change until state officials stop treating businesses as “guilty until proven innocent” and as sources of corruption rent.

Regulation of activities of joint-stock companies (JSCs) and limited liability companies (LLCs)

The most significant change in this area was the adoption of amendments to the law on joint-stock companies, primarily aimed at improving the management of state-owned enterprises (see Chapter 11). Specifically, the quorum required for organizing a general shareholder meeting was lowered from 60%+1 to 50%+1 (this standard was later extended to LLCs). Notably, the law protected not only the rights of the state but also those of other shareholders who might suffer from unfriendly actions by minority investors by establishing liability for unpaid dividends and allowing supervisory boards to function even if not fully staffed as long as there is a quorum. A little later, Parliament protected the interests of minority investors in public joint-stock companies from managerial abuse (the law “On Investors’ Protection” was one of the conditions for obtaining a World Bank loan).

In 2017, Parliament adopted European legislation on the compulsory buyout and sale of shares to prevent situations when minority investors could block decisions crucial for business operations, or could not sell their shares to majority stakeholders for a fair price. Subsequently, Parliament clarified the legislation on corporate agreements, requiring shareholders or LLC participants to clearly outline their mutual rights and obligations. A new version of the law on limited and joint liability companies created opportunities for small and medium-sized businesses to implement effective corporate governance.

The integration of Ukraine’s corporate sector with European standards was supported by laws aligning financial reporting standards and electronic trust services with EU norms. These laws introduced European rules for electronic ID and signatures, and since 2023, Ukraine permitted the use of qualified electronic signatures issued by EU countries. 

In April 2019, the Parliament adopted the Bankruptcy Code, which strengthened the protection of creditors’ interests and reduced the duration of bankruptcy or solvency restoration procedures, thus decreasing the number of enterprises stuck in “limbo” between bankruptcy and normal operations. With the new Bankruptcy Code, Ukrainian enterprises would become more dynamic, because inefficient enterprises should exit the market to make room for more efficient ones. The Code also allowed personal bankruptcy (as of October 2024, Ukrainians filed over 2,000 personal bankruptcy cases). However, it is still necessary to align bankruptcy procedures with EU legislation.

Antitrust regulation and state support for enterprises

One key area of reforms from 2015 to 2019 was enhancing the capacity of the Antimonopoly Committee of Ukraine (AMCU), one of the main instruments for containing existing and potential oligarchs. Technical assistance projects funded by international partners contributed significantly to AMCU capacity development. However, neither the president nor Parliament dared to grant real independence to the Committee. Nonetheless, the government took several steps to increase the transparency and effectiveness of AMCU operations.

Thus, Parliament obliged the AMCU to publish its decisions on market concentration and collusion cases. It also relieved the AMCU of minor cases by raising the thresholds for asset or annual turnover after which enterprises must obtain approval for mergers from the Committee (the threshold for total assets or annual turnover of all parties in a deal was raised from EUR 1 million to EUR 30 million and for one of the parties from EUR 12 million to EUR 150 million).

In 2015, the government granted the AMCU the right to approve state aid for enterprises, with the law taking effect in 2019 (thus the Committee was provided time for institutional reform and acquiring the necessary competencies). Despite that, the distribution of state aid remains fairly opaque and chaotic. 

The government eliminated monopolies in several markets directly with its decisions. In 2015, it allowed private enterprises to produce bioethanol alongside state-owned ones, and in the following year, it canceled the register of biofuel producers (this means that any enterprises, not only those included into the register, can produce it). In 2018, the government dismantled the state monopoly on alcohol production, replacing it with licensing of this activity (in 2015, the Cabinet of Ministers introduced electronic invoices to control alcohol circulation). Between 2019 and 2021, several distilleries were privatized. Unfortunately, a large part of the alcohol market remains in the shadows.

Services for businesses

In 2016, the National Energy and Utilities Regulatory Commission (NEURC) simplified the rules for connection to the grid of equipment that consumes between 160 and 5,000 kW (which is typical for many enterprises). The NEURC set clear criteria for the technical conditions for such connections and introduced a formula-based cost calculation (previously, regional power companies could impose additional conditions for connection to the grid at will, thus creating significant opportunities for corruption). However, Table 6.1 shows that this improved the situation only marginally.

The protection of intellectual property rights in Ukraine was introduced mainly upon insistence from the EU and the US. For instance, the law on strengthening copyright protection, which regulated the activities of collective management organizations responsible for transferring royalties to authors, was only passed after the US restricted imports of certain goods from Ukraine.

In 2015, President Poroshenko initiated the introduction of 4G cellular network in Ukraine (by 2019, 4G coverage extended to 76% of Ukraine’s territory, and by 2024, it reached 98%). To simplify network development, the requirement to obtain permits for attaching telecommunications equipment to buildings and structures was canceled. Then, Parliament granted equal access to infrastructure for developing telecommunications networks, and the National Commission for State Regulation of Communications and Informatization (NCSRCI) introduced a one-stop shop for obtaining phone numbers.

In 2015, Parliament passed a framework law on e-commerce, which, among other things, defined the rights and duties of market participants and equated the legal validity of electronic contracts with contracts signed in other forms. 

Regulation of specific industries

The main problems in extractive industries (mining) were corruption and lack of transparency in the use of natural resources. In 2015, the government introduced open auctions for obtaining permits to use mineral resources and published information about the mining industries (including tax payments, exploration status, use and protection of natural resources). In 2018, Ukraine joined the Extractive Industries Transparency Initiative (EITI), making reporting to this initiative mandatory for all companies in the sector (in 2021, this law was amended to align with the EITI 2019 Standard). In mid-2019, the government streamlined the issuance and re-registration of mining permits.

At the end of 2022, the government allowed assessing the volume of mineral reserves using international standards and deregulated extractive industries. It introduced cross-cutting licences for exploration and extraction and allowed owners of plots up to 25 hectares (so-called small subsoil users) to obtain special permits to extract local minerals without an auction. 

In 2015, the government began simplifying regulatory requirements for private companies in the port industry: stevedores (companies that load and unload ships) were granted access to piers managed by the Ukrainian Sea Ports Authority (USPA), and dredging companies could obtain permits from the Ministry of Environmental Protection and Natural Resources just once, rather than each time such work was required.

The State Aviation Administration established equal access conditions for all air carriers. This was a key factor driving the entry of low-cost airlines into the Ukrainian market. 

Changes in the railway sector focused on safety: the government banned Russian companies from rail transportation in Ukraine and strengthened safety requirements for companies involved in passenger and hazardous cargo transportation (for instance, to obtain a licence, these companies must have appropriately organized processes and their staff must be officially employed). 

In 2015, Parliament simplified regulations for agricultural producers: the number of required permits was reduced, quarantine permits for fertilizer imports were canceled, and several certificates were made voluntary rather than mandatory. A little later, the government eliminated mandatory certification of agricultural machinery, streamlined and decentralized (transferred to the regional level) the provision of state support to agricultural producers. In 2018, the government cancelled sugar market regulations (price floors, import quotas) in line with WTO rules (although this regulation became irrelevant long before these changes). 

Several EU-integration laws and regulations were adopted as well: on state control and compliance with legislation on food safety and quality (risk-based state control, permission for photo and video recording of the inspection process, and public oversight of it), on feed safety, on the implementation of phytosanitary expertise in private laboratories, and on food labeling in accordance with the EU Association Agreement. 

In addition, the Cabinet of Ministers approved several regulations regarding organic production of various types of products, and Parliament passed a framework law on organic production that is harmonized with EU standards. 

Between 2014 and 2019, the government significantly deregulated the pharmaceutical market to increase competition and make drugs more affordable for patients. This included canceling state expertise for drugs registered by the European Medicines Agency, lifting mandatory accreditation of pharmacies, and eliminating the requirement for re-registration of drugs every five years. In spring 2016, the government greatly accelerated the registration of drugs already registered in developed countries; later, the Parliament further simplified the registration of such medicines.

The construction industry in Ukraine (as in many other countries) remains quite corrupt. Therefore, since 2014, Parliament has taken steps to deregulate the sector and increase its transparency, aiming to reduce corruption. This included limiting the frequency of inspections by the architecture and construction control agency, reducing the list of construction works that require licensing, and introducing electronic licensing for construction businesses. 

In 2017, Parliament simplified the regulation of construction activities: it abandoned the requirement to obtain a separate permit from the State Emergency Service for objects of I and II complexity levels and allowed to obtain construction permits and to put buildings into operation through electronic services. At the same time, the government reduced the list of construction works that require documentation, sped up the change of construction standards from 1.5 years to 10 months, allowed the use of EU construction standards in Ukraine, and made urban planning documentation publicly available, considerably speeding up the searching and formalizing land plots for construction.

Unsurprisingly, “obtaining construction permits” indicator in the Doing Business Index improved by 20 points between 2016 and 2020 (see Table 6.1). 

Changes during 2019-2024

The new government elected in 2019 continued aligning Ukrainian legislation with European standards, aiming to fulfill the Association Agreement. Significant progress (at least in terms of legislation) was achieved in protecting intellectual property rights and strengthening the Antimonopoly Committee. However, the majority of reforms were implemented in the construction sector, perhaps because the “Great Construction” initiative became the flagship project of the new government.

Protection of intellectual property rights: implementation of EU rules

In October 2020, the Cabinet of Ministers established the National Intellectual Property Authority, whose functions were transferred to the Ukrainian National Office for Intellectual Property and Innovation in 2022 (these entities were created on the basis of the “Ukrpatent” agency subordinate to the Ministry of Economy). This office is responsible for issuing patents and other documents certifying intellectual property rights for inventions.

In 2020, the government reformed patent legislation in accordance with EU standards by introducing the opportunity to submit patent applications online. It also made life more difficult for so-called “patent trolls” (enabling the cancellation of patents for long-existing products, a tactic used by some unscrupulous entrepreneurs to block the selling or import of certain goods). This reform was complemented by a law strengthening the protection of trademark and industrial design rights. 

A significant step forward was the introduction of protection for geographical names in line with EU legislation. This means that Ukrainian producers can no longer label their products as “cognac” or “champagne,” but they gained the right to register local brands (e.g., “Melitopol cherry”). Then, Parliament established procedures for obtaining protection for geographical brands of agricultural products and aligned the geographical names of spirits with EU rules, which will promote the production of craft alcoholic beverages. The development of production of these beverages is supported by simplified tax administration and reporting rules and cutting the price of a wholesale licence from UAH 500,000 to UAH 30,000. For small producers of wine made from Ukrainian materials, the rules are even softer: they will be able to sell their wine to final consumers without a licence.

In 2023, Ukraine continued to implement EU directives on intellectual property, expanding the list of copyright objects and introducing European rules for intellectual property rights protection. That same year, virtual assets were recognized as copyright objects.

With the onset of the full-scale war and the respective decline in domestic demand, the entry of Ukrainian enterprises into foreign markets, primarily the EU, became even more important. To promote Ukrainian goods abroad, in 2024, the government allowed unrestricted use of the “Made in Ukraine” trademark (entrepreneurs can obtain and use the respective brand book). 

Standards: harmonization with the EU and consumer protection

Since October 2019, national standards can be used voluntarily — this is one of the key steps toward implementing the “industrial visa-free regime” with the EU (for more details on the “industrial visa-free regime,” see Chapter 9 of this book).

In January 2025, the recently adopted Technical Regulation on the Safety of Chemical Products came into effect. It implements the norms of the European REACH Regulation, ensuring a high level of protection for human health and the environment from potential risks associated with chemical substances. A key requirement of the regulation is the mandatory registration of all chemical substances produced, imported, or placed on the market in Ukraine in quantities exceeding 1 ton per year. This enables the state to track the movements and final destinations of chemical substances to determine whether they pose a danger to people and the environment. 

The new consumer protection law, which also harmonizes Ukrainian legislation with EU norms, will come into effect after the end of martial law. It clarifies the provisions of the above-mentioned e-commerce law, particularly by allowing public organizations and the State Service on Food Safety and Consumer Protection to protect consumer rights if a product is purchased online (this interaction will be organized via the eConsumer portal), and extends consumer protection rules to food products. It also obliges sellers to provide guarantees not only for new but also for used products (since 2023, guarantees can be provided in the electronic form). The law that strengthens protection of consumers of digital content and digital services came into effect in the summer of 2023.

The government continued to shift away from ad-hoc inspections, which were often used to enrich inspectors, to risk-oriented approaches. The State Energy Supervision Agency implemented this approach in 2020. Since 2022, fire inspections have been replaced with liability insurance (insured enterprises with minimal risk will be inspected once every ten years, while those with a medium level of risk will be checked once every six years). The market surveillance agency will inspect products from manufacturers only if there are documented reasons to believe that a product is dangerous or does not meet standards due to the manufacturer’s fault.

Antitrust policy: extending the powers of the Antimonopoly Committee of Ukraine

In 2021, the AMCU was designated as the agency responsible for handling public procurement complaints (the AMCU established a commission to review such complaints). In September 2023, to comply with the Association Agreement and the IMF program, Parliament equipped the AMCU with more powers to obtain information from enterprises and implement investigations (including searches). At the same time, the list of information which the AMCU must publish was expanded. However, the issue of the Committee’s political independence remains unresolved.

The government approved several resolutions specifying the criteria for providing state aid in various areas: regional development, local, sports, and recreational infrastructure, services of general economic interest, and enterprises in civil aviation and port industries. This somewhat streamlined the AMCU’s process of review and approval of the public aid to businesses. 

Business оperations: regulation of shareholder relations and simplification of connection to the grid

The most significant reform in regulation of JSCs/ LLCs activities was introduction of the trust ownership mechanism and mandatory compensation of losses to minority shareholders. This same law canceled the “equity contribution” in construction, which had been a significant source of corruption in this sector (the equity contribution is a certain number of apartments that a developer had to provide to city authorities, for example, for social housing, or the obligation to build certain social infrastructure near new housing. Since local authorities could set the equity contribution at their discretion, it often varied greatly for “friendly” and “unfriendly” companies).

The new law on joint-stock companies defined the procedures for establishing, operating, and terminating JSCs, outlined the rights and duties of shareholders, introduced the mechanism for holding general meetings with electronic voting, and clearly defined the separation of operational management and oversight functions for different types of JSCs. As a result, the operations of joint-stock companies became more transparent, and “ordinary” shareholders gained more opportunities to influence them. At the same time, Parliament introduced mandatory notarization of agreements on the transfer of corporate rights with simultaneous state registration of rights, which should help reduce raidership. 

In September 2023, the government approved a methodology for identifying final beneficial owners of enterprises based on FATF principles, and shortly before that, it allowed the submission of information about such owners electronically. This will simplify compliance for honest entrepreneurs and complicate operations for dishonest ones.

In 2021, Parliament allowed online submission of applications for connection to gas networks, provided customers with an opportunity to conduct an expertise of technical conditions for connection to ensure compliance with standards, while operators were required to eliminate any pitfalls within five days. This law provided for the creation of an Information Database on Natural Gas Consumption (this database has not yet been created, but in July 2024, the Ministry of Energy published for public discussion a draft resolution on setting up this database). 

Additionally, the government introduced a “one-stop shop” system for connecting to power grids for consumers of up to 1 MW per year (i.e. small and medium businesses). The new rules include the principle of tacit approval of project documentation and free access to geospatial data on the territory, geological conditions, construction activities, engineering infrastructure objects, etc.

Development of public-private partnerships and attempts to “revitalize” industrial parks

Legislation on public-private partnerships (including concessions) in Ukraine was adopted back in the 1990s, but it was very impractical. In 2016, the Cabinet of Ministers introduced a single methodology for calculating concession payments based on international rules (previously, three “Soviet” methodologies were in place) and included the sum of concession payments in the terms of the concession tenders. However, more effective concession legislation was implemented only in 2020. The full-scale invasion halted the execution of two concession agreements signed at the end of 2021.

Similarly, special legislation on industrial parks has existed for a long time. However, as of early 2022, only four out of 62 registered industrial parks (6%) were operational in Ukraine; currently, 15 out of 86 (18%) are operational. Since 2014, the government has tried to “revitalize” industrial parks: in 2015, they were granted the right to use land free of charge for three years, and in 2021, they were given the opportunity to receive budget compensation for the construction of engineering infrastructure. Later, tax and customs benefits were introduced for them (this decision was negatively assessed by Reform Index experts, as such benefits are a potential source of corruption or tax evasion). Similarly, experts negatively evaluated the recent law on the “White Business Club“, as it creates an uneven playing field for enterprises. 

Although industrial parks are pretty popular in the world, research shows that they very rarely become profitable (i.e., tax revenues from them do not cover the amount of provided benefits even after 10-20 years). And, of course, they cannot replace reforms establishing the rule of law and predictable public policies. 

Opinions of experts on the “investment nannies” law, aimed at increasing Ukraine’s investment attractiveness, were polarized. On the one hand, it creates an uneven playing field; on the other hand, some of Ukraine’s neighboring countries also grant special preferences to foreign investors. By February 2023, only five projects were submitted under this law, and no actual investments were made. In October 2024, the Ministry of Economy signed two projects under this law — with “Astarta” (a large agrarian company) and “Bukovel” (an operator of the largest ski resort in Ukraine).

Another approach to attracting entrepreneurs to Ukraine, particularly in the IT sector, is e-residency. An e-resident can register as an entrepreneur through the newly launched portal and pay a 5% income tax as long as their income does not exceed USD 180,000 per year. Currently, e-residency is available to citizens of Slovenia, India, Pakistan, and Thailand. The Cabinet of Ministers plans to expand the list of countries whose citizens can use this opportunity.

A useful innovation for business operations is the establishment of uniform registration and reporting rules for branches of foreign legal entities and Ukrainian legal entities in accordance with the EU Directive 2017/1132.

Services for businesses

In November 2023, the Diia portal launched the e-Entrepreneur service, which includes state registration of entrepreneurs in the Unified State Register, registration as taxpayers, account opening, and other features (the service implies automatic information exchange between government agencies and registries). In March 2024, Diia.Signature for legal entities was introduced (before that, only individuals could use this feature).

In the fall of 2024, the government launched the Unified State Electronic Permit System named ePermit. This experimental project will run for two years, after which the system will be permanently deployed. Economic agents will be able to use this system to obtain permits related to employee safety, obtain and suspend licences for various activities, and to submit complaints about actions of licensing authorities. ePermit will interact with more than ten registries, including the Unified State Electronic Database on Education (USEDE), the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Organizations, and the State Register of Property Rights to Real Estate, allowing permit or licence recipients to avoid having to re-submit documents already available in these registries. 

In September 2019, Parliament canceled licensing for telecommunications operators. According to the Association Agreement, they only need to notify the National Commission on Communications and Information (NCCI) about the start of their operations. The ban on using 4G mobile communication in the 800-900 MHz bands was also lifted, allowing operators to extend high-speed mobile internet services to almost the entire territory of Ukraine. For this purpose, access to land plots for telecommunications companies has been simplified. 

The law on electronic communications introduced a single licence for mobile operators instead of licences for each type of service. It also allowed consumers to choose individual services (if technically possible) instead of service packages and to receive full information about services from operators. At the same time, the Parliament increased the independence of the NCCI and introduced competitions for the appointment of its members, which is expected to enhance its professionalism. 

In June 2024, Ukraine began integrating into the single EU roaming zone. Thus, Ukrainians in the EU and Europeans in Ukraine will soon be able to use mobile communication services without additional charges under the RLAH (Roaming Like at Home) mode. 

Regulation of certain industries or markets

Gambling was legal in Ukraine until it was banned in 2009, and consequently, the sector went underground. Discussions on legalizing gambling started in 2014, and it was actually legalized in August 2020. However, revenues from this activity turned out to be significantly lower than expected (Figure 6.2) as most of the income from the gambling sector was hidden from tax authorities (in addition to licence fees, casinos must pay income tax, profit tax, tax on prizes, and a military surcharge). Therefore, the authorities gradually began to restrict this activity again: the government introduced real-time casino revenue tracking, the President prohibited military personnel from accessing casinos, and the NBU banned the use of credit funds for gambling. Moreover, the Commission for Regulation of Gambling and Lotteries (CRGL) maintained a registry of individuals prohibited from gambling (an individual or their relatives can request their inclusion on the registry, or can be included there by a court order), and the Economic Security Bureau (ESBU) began an investigation into tax evasion by some casinos. In December 2024, the government liquidated CRGL and introduced a number of restrictions on advertising of gambling and access to it. A new powerful regulatory agency for gambling has to be created by April 2025. 

	2021		2022			2023			Number of licences as of 01.01.2024
	licences issued	licence fees paid, million UAH	licences issued	licence fees paid, million UAH	licences revoked	licences issued	licence fees paid, million UAH	licences revoked
Offline casino	8	432	0	72	8	3	417	5	6
Gaming table	106	57.2	0	5.4	20	31	36.8	66	54
Roulette table	43	45.2	0	6.3	7	13	27.6	29	20
Online casino	13	304.2	3	286.7	4	6	486.3	2	16
Online poker	3	18	0	18	0	3	18	1	2
Slot parlors	19	171	0	5	0	4	161.2	12	11
Slot machines	3811	411.8	593	72.5	327	1713	352.4	3350	2540
Bookies	1	108	4	693	2	1	462.6	1	3
Betting outlets	0	0	0	0	0	1	0.201	0	1
Gambling service licences	18	32.55	3	7.26	0	4	6.84	3	0
Total	4 022	1 579.9	603	1 166.1	368	1 779	1 969.0	3 469	2 653

To align Ukrainian legislation in the construction sector with European standards, Parliament simplified construction regulations, allowing developers to use the European approach, which specifies certain characteristics of the buildings (e.g., resilience to natural disasters), instead of the “Soviet” approach that mandates specific materials or technologies. Subsequently, the Ukrainian construction product market was harmonized with EU Regulation 305/2011 in order to prevent counterfeit and hazardous products from entering the market (the law requires sellers of construction products to provide detailed specifications of their products and their suitability for use in structures of different levels of complexity and allows the market surveillance authority to ban the sale of substandard products). Finally, the government introduced international pricing standards for road construction, enabling the use of new technologies and materials.

Another positive step by the new government was the elimination of a rent-seeking scheme in property valuation (the so-called “Yatsenko platforms”). The law ended the need to obtain fee-paid certificates and notes on the assessment of real estate objects from certain private electronic platforms. Now anyone can get a certificate of evaluation of a real estate object online for free.

Perhaps the most significant change was the creation of the Unified State Electronic System in the construction sector (USESCS), which later began operating as a “one-stop shop” system. This system allows the electronic provision of all administrative and other services in the construction sector, including requesting construction expertise, which can only be provided by organizations that meet the criteria set by the Ministry of Regional Development. At the end of 2024, the government started an experiment to implement a system for managing multi-apartment buildings. The system will be compatible with USESCS and will make the management of buildings more transparent.

In 2023, the government allowed to implement a technical inventory of real estate within the system, and simplified the procedures for getting construction permits during martial law and one year after martial law is lifted. For instance, the construction of private houses or structures not higher than two floors can proceed without a construction permit if it complies with urban planning documentation and the project designer uploads the relevant documents into the system (if the local authorities do not object within ten days, the construction is considered approved). In 2022, the system was used to find suitable premises or sites for business relocation. However, its role will be most crucial during reconstruction.

With reconstruction in mind, the government approved the procedure for drafting spatial development plans for amalgamated territorial communities (hromadas). Such plans serve as both urban planning documentation and land management documentation for hromadas. After a plan is developed, everyone will be able to access a public cadastral map and see the information on the maximum allowed height of buildings in a given area, cultural heritage protection zones, etc. These plans will be developed with the participation of citizens. 

Moreover, the Cabinet of Ministers made several decisions to simplify construction. It allowed the use of “standard” projects in construction, which will help reduce project costs during the reconstruction process. Second, it simplified the process of changing the allowed land use from agricultural to industrial during martial law and 5 years afterwards. For land outside of settlements areas, the allowed land use will be changed without urban planning documentation and land management documents. Third, it allowed foreign companies to build objects with moderate and significant consequences during martial law without a licence (after the end of martial law, they will need to obtain licences within three months).

Finally, it introduced the protection of property rights for unfinished construction objects. This measure aims to prevent fraudulent schemes in which a developer disappears with the investors’ money after the initial stages of construction.

In recent years, the fishing industry has seen revolutionary changes. In 2020, the government mandated the installation of remote monitoring devices (GPS) on fishing vessels, and in 2023, Parliament launched a comprehensive reform of the sector. This includes electronic auctions of commercial fishing quotas on the Prozorro.Sales platform and creation of eFish, an electronic management system for the industry through which fishing permits and fish origin certificates can be obtained. The reform established legislative requirements for fish wholesale places, rules for lease and use of water objects, etc. In the first few months after the reform, budget revenues from the sale of commercial fishing licences increased by an order of magnitude, and the introduction of GPS tracking allowed to “find” over 300 vessels, resulting in a one-third increase in Ukraine’s legal fishing fleet. The next step is to implement full traceability of fish products, which will enable Ukraine to enter the European market.

In agriculture, the implementation of European standards and deregulation continued. The government reduced the number of documents and the time required to obtain them in veterinary medicine, with the option to receive them online. The requirement for re-registering veterinary drugs every five years was eliminated and replaced with post-registration monitoring of their effectiveness, which will help combat counterfeit veterinary products.

During 2022-2023, the government introduced European rules for handling pesticides and agrochemicals, along with international standards for natural food ingredients and the recognition of feed additives registered in the EU. Seed certification was simplified in line with EU rules (allowing private auditors, not just state ones, to perform this task), and the registration of plant variety rights was streamlined by eliminating the need for expertise. International organic labeling was legalized for Ukrainian organic producers, and European rules for handling GMOs were implemented. At the end of 2025, European restrictions on the use of palm oil in food products will come into effect in Ukraine (this will be beneficial for the health of Ukrainians).

In 2024, Ukraine aligned its viticulture legislation with international rules and EU regulations. This law will come into force in 2026. It establishes European standards for wine and other viticulture products, a mechanism for protecting geographic brands, and provides for the creation of a Viticulture and Winemaking Register, which will contain information about all plots where grapes are grown, all producers and products made of grapes.

In 2022, Parliament allowed private technical services and testing laboratories to participate in tractor testing procedures. Thus, official agricultural machinery dealers will be able to register equipment, which will promote competition in the market, leading to improved service quality.

The framework law on agricultural cooperation (July 2021) established principles for the formation and operation of agricultural cooperatives (democracy, voluntariness, and openness), defined the rights and responsibilities of cooperative members, etc. In European countries, agricultural cooperatives play a significant role not only in producing agricultural products and supporting farmers but also in the life of their respective communities. Hopefully, in Ukraine cooperatives will be as successful as in the EU.

At the end of 2021, the government established a partial credit guarantee fund for agricultural producers to make loans more affordable to farmers. By early September 2024, the fund had provided guarantees to nine enterprises totaling UAH 6.25 billion. In 2024, Ukraine joined the International Fund for Agricultural Development. This opens more opportunities for international cooperation and will allow for the attraction of additional resources to develop the agricultural sector.

In October 2024, Parliament adopted a law on the State Agricultural Register (SAR). The SAR has been operating since 2022. Agricultural producers register in it voluntarily, but they can obtain state support, including credit guarantees or subsidized insurance, only through the SAR. The law defines entities responsible for maintaining and updating the register, rights and obligations of its users, procedures for data exchange with other registers and for monitoring of the state support use.

In the transport and postal sectors, as in many others, Ukraine implemented European norms, although somewhat selectively. For example, the new law on postal operators introduces electronic stamps and inclusive postal services, aligning regulations with modern technologies. However, it also stipulates that only operators designated by the Ministry of Infrastructure and registered with the Universal Postal Union (currently Ukrposhta and Meest) can implement customs clearance of international postal shipments. This restriction of competition may not be entirely appropriate. 

In the road transportation industry, fines for overweight trucks were introduced (although the infrastructure for truck weighing is not very well developed), along with a road safety audit procedure and a risk-based approach to carrier inspections.

In 2024, the Ministry of Infrastructure changed the rules for bus transportation. Passengers will no longer have to purchase insurance when buying tickets; instead, carriers will be required to insure their liability to passengers. Additionally, only bus stations listed in the electronic Register of Bus Stations will be allowed to provide services to passengers and carriers. Previously, some bus stations were licensed for this activity, while others operated “in the shadow,” i.e. without licences. Now bus station owners will be required to enter information about their stations into the register, and the government will cross-check this data with information on bus stations listed in the carriers’ routes.

In 2020, Parliament significantly updated the regulation of inland water transport, specifying maintenance requirements for waterways and structures, technical requirements for vessels and crew qualifications, principles for collecting port fees, etc. 

In April 2023, in line with EU regulation, Ukraine simplified market access in civil aviation. Under the new law, certified air carriers are no longer required to obtain permits for operating air routes; they only need to coordinate airport time slots. 

Reforms in the pharmaceutical sector improved access to drugs for patients. Parliament allowed creation of mobile pharmacies to serve remote areas, and the government set requirements for companies engaged in the e-commerce of medicines (such companies must have warehouses with appropriate storage conditions, their own website, a delivery service, or a contract with a postal operator which is able to maintain proper temperature during delivery). In 2022, the government allowed compassionate drug use, which means that patients can receive free of charge drugs that are not registered in Ukraine but are undergoing at least the second stage of clinical trials in the USA, EEA countries, Australia, Canada, Japan, Great Britain, Israel or Switzerland.

In 2023, Parliament passed a new law “On Medicinal Products,” which will take effect 30 months after the end of martial law. This law comprehensively outlines the path of drugs and medical products to market — from drug development to testing, production, and sale, defines the responsibilities of authorities and the procedure for drug quality control. 

In 2024, Ukraine harmonized its rules for labeling medicines with the EU Directive 2001/83/EC (banned placing advertising on drug packaging, including claims about the uniqueness or exclusivity of a medicine). The medication verification system with 2D coding was introduced to reduce the volume of counterfeit products on the market.

Sanctions

Following the full-scale invasion, Ukraine intensified its efforts to impose sanctions on individuals and legal entities from aggressor states. It introduced a new type of sanctions — confiscation of assets that belong to or are under direct or indirect control by such individuals or entities. As of June 2024, assets from 49 individuals have been confiscated by the state, including monetary funds, various properties, and cultural artefacts. Given that sanctions have been imposed on over 17,000 individuals, this number may seem small. However, the confiscation procedure requires a decision of the High Anti-Corruption Court, making 49 a decent number. 

What next?

Better governance (Chapter 1), judicial and law enforcement reforms (Chapter 3), improvements in education, especially adult education (Chapter 13), changes to labour legislation and social support system (Chapter 12) will all benefit the business environment. Other reforms, such as sound monetary policy (Chapter 4), energy market reform (Chapter 7), and transportation improvements, also impact the business climate in Ukraine. Therefore, in this Chapter we focus on the recommendations provided by EU enlargement reports, the Ukraine Facility plan, and the IMF program specifically for business development. These are:

1. Rebuilding infrastructure, particularly energy infrastructure. Given the security situation, the best solution seems to be the decentralization of generating capacities and using “green” power plants with batteries where possible. Further simplification of procedures for connecting to the power grid is also necessary.
2. Implementing the Public Investment Management Roadmap. The main idea is that public investments can act as catalysts for developing industries or regions (e.g., an investment in the production of construction materials can reduce construction costs in a specific city and create jobs in retail and HoReCa). However, due to limited public resources, locations of such “targeted” investments should be chosen very carefully and under public oversight. The same logic should be applied to public aid provision.
3. Developing concessions and public-private partnerships. This tool is highly underestimated in Ukraine, although it can improve the management of state assets (ideally making them profitable) while also reducing risks for investors, who would not need to purchase an asset to generate profits from it.
4. Further harmonization with EU legislation in the areas of standards, quality control, market surveillance, and others to facilitate access of Ukrainian goods to the European market.
5. Work on mutual recognition of qualifications between Ukraine and the EU for integrating services markets and simplifying access for EU citizens to the Ukrainian labour market (this will also benefit Ukrainian businesses, which are currently facing a labour shortage).
6. Developing a technological solution for transferring financial reports of Ukrainian enterprises to a single state registry, enhancing transparency in financial reporting and processes related to the transfer of enterprise ownership in line with EU legislation (transparency of reporting and company ownership structure is a necessary condition for attracting foreign investors).
7. Further harmonization with EU legislation in the area of intellectual property rights protection, and the launch of the High Court on Intellectual Property.
8. Continued deregulation and digitalization, including adopting by the end of 2025 a deregulation law that will introduce electronic permits and risk-based approaches, such as insurance, instead of inspections (currently, these approaches are implemented in just a few sectors).
9. Updating bankruptcy legislation in accordance with EU Directives 2019/1023 and 2017/1132.