Ukraine Country Profile

Snapshot of the Ukraine Country Profile


Ukraine's current president Viktor Yushchenko has made fighting corruption a top priority for his administration. However, traditions of transparent decision-making and societal understanding of corporate governance are lacking. Moreover, there is a high tolerance for corrupt practices throughout society and the mindsets of political and economic elites on the federal as well as the regional levels are slowing the country's progress towards efficient standards of opposing corruption. Both petty and grand scale corruption are thriving in Ukraine as a result, and corruption has such a sustained impact on companies, state decision-making and the daily lives of citizens that it is perceived by many as a normal part of life.

Positive developments in relation to corruption and investments:

  • A significant change in the government's attitude towards corruption has occurred based on its acknowledgement that corruption exists in Ukraine.
  • National and local authorities in Ukraine have developed nearly 200 one-stop shops intended to cut the number of standard registration procedures.
  • InvestUkraine, an independent non-profit investment promotion agency, was established in August 2005 with the support of the government and is intended to function as a parastatal one-stop shop for investors. The agency has developed a wide range of partnerships with international donors and organisations as well as domestic organisations working with anti-corruption and hosts networking conferences and events.

Risk of corruption:

  • The most frequent areas in which companies encounter corruption in Ukraine are business licensing, taxation and customs. Corrupt practices are still seen by public officials as low risk behaviour, and officials have grown accustomed to supplementing their (low) salaries through corruption.
  • There are also reports of government agencies creating fiscal targets for inspection agencies, thus creating quotas for the collection of fines instead of fining in accordance with objective criteria. This leads to the arbitrary fining of companies and greater relative risks for doing business in Ukraine.
  • On a more general level, entering the Ukrainian market will almost always require local agents or consultants who can facilitate making the necessary connections or market entry, and some of these third parties might use monetary or other inducements as a method of operation.
  • Dispute settlement is reportedly weak, unfair and biased and companies have little faith in the court's ability to work with vague laws and regulations that leave ample room for interpretation and for corruption to occur.


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