Vinnytsya and Frankivsk regions the best regions for doing business in Ukraine

Regional Doing Business 2018

Vinnytsya and Frankivsk regions are the most comfortable regions for doing business in Ukraine. These are the results of the “Regional Doing Business 2018” rating, prepared for the second year by the Better Regulation Delivery Office (BRDO) and the Union of Ukrainian Entrepreneurs (SUP).

The leaders got the following number of points: Vinnytsya region – 334 points, followed closely by the Frankivsk region – 332 points. The Zhytomyr region ranked third – 313 points.

The regions were assessed using the adapted World Bank’s methodology based on a survey of domestic entrepreneurs. The research was focused on 6 areas of interaction between entrepreneurs and the government, namely: starting a business; paying local taxes; obtaining construction permits; registering a plot of land for real estate purposes; connecting to electricity networks and the quality of electronic services. The maximum amount of points that regions could get was 600.

“Honestly speaking, when we presented our first rating a year ago and made recommendations to local authorities regarding improving the conditions for starting and doing business, we did not really believe in progress,” said the Deputy Head of BRDO Denis Malyuska said.“But there is progress. The Vinnytsya region achieved the greatest progress overall. The Zhytomyr region ranks the first in terms of starting a business, and now it can motivate entrepreneurs to move to them and set up a business there. The Chernihiv region is ready to compete for construction facilities and has progress in land allocation. In turn, Kharkiv and Donetsk regions are the most friendly to business regions in terms of paying taxes,” Malyuska said.

This year a new component was also added – electronic services – that turned out to be the most interesting and unexpected. When assessing them, the BRDO found three types of behaviour.

“The first one is the most popular. It is not to notice the Internet and not to provide own services over the Internet. This is common even for such large cities as Odessa or Kharkiv,” said Malyuska. “The second type is to use the nationwide system of electronic services. That’s what Dnipro and Khmelnytsky did, in joining the iGov. The third type of behaviour is to reinvent the wheel, that is develop own services. And here someone succeeded, for example, Lviv with its ‘Lviv citizen’s personal account’ or Ivano-Frankivsk with its CNAP website (centre for providing administrative services), while others were not so successful.”

“The main SUP’s objectives are to improve the business climate in Ukraine and deregulation. We hope that this year’s Regional Doing Business results will also have a positive impact on creating a comfortable business environment and attracting investments, which are so necessary for Ukraine,”the SUP’s Executive Director Kateryna Hlazkova added.

Key recommendations developed by the BRDO include:

  • Introducing electronic permits and approvals by joining national systems of electronic services or developing a local analogue;
  • Ensuring the transparency of urban planning documents by publishing them online;
  • Joining the #StartBusinessChallenge initiative;
  • Reducing the infrastructure share participation to 0;
  • Accelerating the process of registration of land plots for electricity transmission lines.

The BRDO is funded by the European Union within the framework of the FORBIZ project and the EU4Business Initiative, with the aim of simplifying the process of doing business and providing effective state regulation in key sectors of the economy.