In early 2023, despite the challenges of wartime, Ukraine launched a large-scale Deregulation Campaign. The Ukrainian government, along with international organisations supporting this important initiative, set an ambitious goal of easing conditions for entrepreneurs and introducing a new digitalised licensing system for businesses that is more time- and cost-effective, aiming to encourage entrepreneurship and boost the country’s economy.
Updated Action Plan
The first year of operation of the Interagency Working Group on Accelerated Review of State Regulatory Instruments for Business (IWG), joined by the team from the Better Regulation Delivery Office (BRDO) within the EU4Business: SME Policies and Institutions Support (SMEPIS) project, implemented by Ecorys in a consortium with GIZ, BRDO and Civitta, was primarily dedicated to analysing the current state of regulatory instruments and drafting respective proposals.
The experts concluded that out of the 1,323 regulatory instruments reviewed, almost 25% were recommended for cancellation, and approximately 500 instruments for simplification. Over the past two years, 122 outdated regulatory instruments have been cancelled based on the IWG’s recommendations.
Their work continued in 2024. Thus, in September 2024, the government approved a new version of the step-by-step Action Plan to accelerate deregulation. The plan contains 100 tasks and 140 sequenced measures aimed at simplifying the conditions for doing business in sectors like construction, energy, agriculture, transport, and logistics.
The expected economic effect of the cancellation of just four outdated, irrelevant state regulatory instruments – specifically in the procurement and storage of seeds, construction of reclamation systems, allowing electric heaters in poultry farming, and project planning for planting vineyards for winemaking –is over UAH 73 million (around EUR 1.66 million) during the first year of deregulation, while the implementation of the initiatives proposed by the IWG in their entirety is expected to save UAH 18.4 billion (or around EUR 481.5 million).
E-Licensing
In September, the Unified State Electronic System of Permit Documents (ePermit) https://e-license.gov.ua/ was officially launched. The ePermit project is funded by the European Union under the EU4DigitalUA project, implemented by FIIAPP, and aims to digitalise a significant part of license- and permit-obtaining processes required for businesses to operate.
On the day of its presentation, 16 September, the portal offered its first service to entrepreneurs: the registration of a declaration of compliance of the material and technical base with the requirements of labour protection legislation.
By late October, another crucial service was launched in cooperation with the BRDO, allowing businesses to obtain an e-permit to extend foreign currency settlement deadlines in foreign trade. This demanded painstaking work beforehand to draft and adopt a number of regulatory acts of the Cabinet of Ministers of Ukraine, along with amendments to the previous acts. The BRDO team was also involved in implementing this service under the SMEPIS project.
Currently, these efforts are ongoing. As part of the first stage of ePermit, the Ministry of Economy plans to digitalise the services most in demand by business owners, including veterinary practice, preschool education, and business activities related to the distribution of narcotic drugs, psychotropic substances and drug precursors.
Diia.Business renewed
Another significant project presented in 2024 was the updated Diia.Business Portal. The updated version is now more industry-oriented, offering users specific types of support depending on their business type and current maturity stage.
The updated portal includes new sections, such as Diia.Business Start, Diia.Business Development, Diia.Business Export, Diia.Business for Women, Diia.Business for Veterans, and a section dedicated to business digitalisation called Diia.Business Digital. Each branch of the portal is tailored to best suit the needs of specific business lines, making it easier for entrepreneurs to find relevant information on a range of topics, from starting a business to entering foreign trade.
The updated portal also features a chatbot providing content on demand. Other innovations include the Financial Opportunities Marketplace, which allows users to compare different financing options and prioritise them according to their needs.
Additionally, users can register a personal account where they can conveniently store relevant content on exports, grants, educational courses, workshops and other opportunities for growth.
Fewer inspections for businesses
Last autumn, significant progress was made in the field of business inspections, audits and regulation. On 8 October, the Verkhovna Rada, Ukraine’s parliament, voted at first reading for Bill No. 5837 “On the Basic Principles of State Supervision (Control).” The bill was developed by the Ministry of Economy along with State Regulatory Service and BRDO experts.
The bill aims to foster a more favourable environment for entrepreneurship and bolster small and medium enterprises. Once enacted, it will provide for fewer inspections of insured medium- and low-risk enterprises.
Those inspections are to become primarily a preventive measure, not a method of punishment, allowing business owners to take the initiative in involving specialists for inspections in order to find and remedy breaches of regulations without risking being fined.
The new legislation also introduces accountability for the leaders of controlling bodies regarding their subordinates’ failures to adhere to inspection procedures.
Notably, the Better Regulation Delivery Office (BRDO) has served as the implementation partner for the Interagency Working Group on Accelerated Review of State Regulatory Instruments for Business (IWG) within the EU4Business: SME Policies and Institutions Support (SMEPIS) project, which is implemented by Ecorys in a consortium with GIZ, BRDO and Civitta, funded by the European Union in Ukraine.
