What Ukraine needs to do to attract more investors for its reconstruction

Investment is a vital component of the reconstruction, aiming to boost domestic production and increase competitive exports. However, building new industries and modern infrastructure in Ukraine is hindered by longstanding obstacles. These challenges affect all businesses, whether Polish, German or American.

Read more in the column by Karol Kubica, head of PAIH's Foreign Trade Office in Kyiv - Eight obstacles to the Ukrainian economic miracle: what Polish investors complain about. Kubica notes that since the start of the full-scale invasion, Poland has become the primary transport hub connecting Ukraine to the world. Advertisement:

Poland is working to expand its transport corridor capacities, he adds. "However, Ukrainian procedures related to implementing the agreement with Poland on the development of border checkpoints and infrastructure along the Ukrainian-Polish border are taking too long," Kubica writes. He stresses the need for modernisation and development of routes used to transport goods to the Polish border.

High-speed roads and railways should connect to every border crossing. Third challenge is balancing EU and Ukrainian markets. "Ukraine, Poland, and the EU as a whole need comprehensive solutions to prevent future protests from farmers and businesses," Kubica emphasises.

At the same time, he reassures that businesses have always found ways to negotiate, so this issue will likely be resolved. Additionally, Kubica highlights problems related to the recognition of import customs value. "Unfortunately, Ukraine still has a practice of tax authorities inflating the customs value of imported goods.

Sometimes, the Customs Service sets a higher valuation for calculating import duties and VAT, even when documentary evidence from manufacturers supports the actual price," he explains. According to Kubica, such short-term tax gains lead to inflation and reduce the competitiveness of products using imported components in foreign markets. Kubica also points out delays in VAT refunds for exporters.

He mentions government policies aimed at limiting European companies' access to Ukraine's goods and services markets. "The participation of experienced European companies with significant resources is currently restricted, which could hinder rapid reconstruction," warns Kubica. Moreover, Ukraine should simplify the registration process for foreign companies and increase the number of equipped industrial sites.

"Poland has become one of the largest European investors in Ukraine. Since February 2022, 244 companies with Polish capital have been established. Entrepreneurs are acting now rather than waiting for victory," Kubica states.

In his view, if Ukraine undergoes transformation, Poland will not delay its investments.

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