Ukraine Commercial Guide
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Ukraine 1 Table of Contents Table of Contents Doing Business in Ukraine ________________ 7 Market Overview ___________________________________ 7 Market Challenges __________________________________ 8 Market Opportunities ________________________________ 9 Market Entry Strategy ________________________________ 12 Political Environment ___________________ 13 Political Environment ________________________________ 13 Selling US Products & Services _____________ 14 Using an Agent to Sell US Products and Services _________________ 14 Establishing an Office ________________________________ 14 Franchising ______________________________________ 16 Direct Marketing ___________________________________ 17 Joint Ventures/Licensing ______________________________ 18 Selling to the Government ______________________________ 20 Distribution & Sales Channels____________________________ 21 Distribution Channels ______________________________________ 21 Sales Channels __________________________________________ 22 Express Delivery ___________________________________ 23 Selling Factors & Techniques ____________________________ 25 eCommerce ______________________________________ 25 Trade Promotion & Advertising ___________________________ 26 Pricing _________________________________________ 27 Pricing _______________________________________________ 27 Pricing Regulations _______________________________________ 28 Pricing and Value Added Tax (VAT) ______________________________ 28 Sales Service/Customer Support __________________________ 29 Protecting Intellectual Property __________________________ 30 Due Diligence _____________________________________ 31 Local Professional Services _____________________________ 32 Principle Business Associations __________________________ 33 2 Limitations on Selling U.S. Products and Services ________________ 34 Web Resources ____________________________________ 34 Leading Sectors for U.S. Exports & Investments __ 35 Agricultural Machinery _______________________________ 35 Overview ______________________________________________ 35 Leading Sub-Sectors _______________________________________ 37 Opportunities ___________________________________________ 38 Web Resources __________________________________________ 38 Education _______________________________________ 39 Overview ______________________________________________ 39 Leading Sub-Sectors _______________________________________ 40 Opportunities ___________________________________________ 40 Web Resources __________________________________________ 40 Civil Nuclear ______________________________________ 41 Overview ______________________________________________ 41 Leading Sub-Sectors _______________________________________ 42 Opportunities ___________________________________________ 43 Web Resources __________________________________________ 43 Defense Equipment __________________________________44 Overview ______________________________________________ 44 Leading Sub-Sectors _______________________________________ 45 Opportunities ___________________________________________ 46 Web Resources __________________________________________ 46 Food Processing & Packaging Equipment _____________________ 47 Overview ______________________________________________ 47 Leading Sub-Sectors _______________________________________ 49 Opportunities ___________________________________________ 49 Web Resources __________________________________________ 50 Medical Equipment __________________________________ 50 Overview ______________________________________________ 50 Leading Sub-Sectors _______________________________________ 53 Opportunities ___________________________________________ 53 Web Resources __________________________________________ 54 Oil & Gas ________________________________________ 55 Overview ______________________________________________ 55 Leading Sub-Sectors _______________________________________ 57 Opportunities ___________________________________________ 57 Web Resources __________________________________________ 57 Safety & Security ___________________________________ 58 Overview ______________________________________________ 58 Leading Sub-Sectors _______________________________________ 60 3 Opportunities ___________________________________________ 60 Web Resources __________________________________________ 61 Customs, Regulations & Standards __________ 62 Trade Barriers _____________________________________ 62 Import Tariff _____________________________________ 62 Import Requirements & Documentation ______________________64 Labeling/Marking Requirements __________________________69 U.S. Export Controls _________________________________ 70 Temporary Entry ___________________________________ 70 Prohibited & Restricted Imports __________________________ 71 Customs Regulations _________________________________ 72 Standards for Trade _________________________________ 73 Overview ______________________________________________ 73 Standards _____________________________________________ 73 Testing, inspection and certification _____________________________ 75 Publication of technical regulations ______________________________ 76 Contact Information _______________________________________ 77 Trade Agreements __________________________________ 78 Licensing Requirements for Professional Services ________________ 79 Web Resources ____________________________________ 80 Investment Climate Statement ____________ 81 Executive Summary __________________________________ 81 Positive and Negative Aspects of Ukraine’s Investment Climate _____________ 81 Ukraine’s Key Sectors ______________________________________ 82 Key Watch Items: Crimea and Donbas ____________________________ 83 Openness To, and Restrictions Upon, Foreign Investment (FDI) _______ 83 Policies toward Foreign Direct Investment __________________________ 83 Limits on Foreign Control and Right to Private Ownership and Establishment _____ 85 Other Investment Policy Reviews _______________________________ 86 Business Facilitation _________________________________ 86 Outward Investment _______________________________________ 87 Bilateral Investment Agreements and Taxation Treaties ____________ 87 Legal Regime _____________________________________ 87 Transparency of the Regulatory System ___________________________ 87 International Regulatory Considerations ___________________________ 89 Legal System and Judicial Independence ___________________________ 89 4 Laws and Regulations on Foreign Direct Investment ____________________ 90 Competition and Anti-Trust Laws _______________________________ 91 Expropriation and Compensation _______________________________ 91 Dispute Settlement ________________________________________ 91 Bankruptcy Regulations _____________________________________ 93 Industrial Policies___________________________________94 Investment Incentives ______________________________________ 94 Foreign Trade Zones/Free Ports/Trade Facilitation _____________________ 94 Performance and Data Localization Requirements _____________________ 94 Protection of Property Rights ____________________________ 95 Real Property ___________________________________________ 95 Intellectual Property Rights __________________________________ 96 Financial Sector ____________________________________ 97 Capital Markets and Portfolio Investment __________________________ 97 Money and Banking System __________________________________ 98 Foreign Exchange and Remittances ______________________________ 99 Sovereign Wealth Funds _____________________________________ 100 State-Owned Enterprises _____________________________ 100 Privatization Program ______________________________________ 102 Responsible Business Conduct __________________________ 103 Corruption ______________________________________ 104 Resources to Report Corruption ________________________________ 106 Political and Security Environment _______________________ 107 Labor Policies and Practices ____________________________ 107 OPIC and Other Investment Insurance Programs _______________ 110 Foreign Direct Investment and Foreign Portfolio Investment Statistics __ 110 FDI by Country __________________________________________ 110 FDI by Industry Sector Destination ______________________________ 111 FDI from Ukraine _________________________________________ 111 Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy _____________ 112 Table 3: Sources and Destination of FDI ______________________________ 113 Table 4: Sources of Portfolio Investment _____________________________ 113 Contact for More Information___________________________ 114 Trade & Project Financing _______________ 115 Methods of Payment ________________________________ 115 Banking Systems __________________________________ 115 Foreign Exchange Controls ____________________________ 116 US Banks & Local Correspondent Banks _____________________ 117 5 Project Financing __________________________________ 117 Financing Web Resources _____________________________ 118 Business Travel _____________________ 119 Business Customs __________________________________ 119 Travel Advisory ___________________________________ 119 Visa Requirements _________________________________ 120 Currency _______________________________________ 120 Telecommunications/Electric ___________________________ 121 Transportation ___________________________________ 121 Language _______________________________________ 122 Health ________________________________________ 123 Local Time, Business Hours and Holidays____________________