Business news from Ukraine

KYIV CITY AUTHORITIES PLAN TO EXTEND BENEFITS TO SUPPORT SMALL, MEDIUM-SIZED BUSINESSES

The Kyiv city authorities initiate the extension of benefits and simplification of procedures to support small and medium-sized businesses, which were adopted by Kyiv City Council in March 2020.
They will be submitted for consideration by the deputies of the newly elected Kyiv City Council, the press service of Kyiv City State Administration reported.
“Today we have gathered with business representatives to discuss problematic issues that have arisen in connection with the weekend quarantine. I want to note that the city is interested in keeping the quarantine as low as possible. The city budget, like business representatives, incurs losses due to restrictions on the activities of entrepreneurs and non-payment of taxes. In the spring, within the limits of our authority, we introduced a set of measures to support small and medium-sized businesses. Our main task now is to continue these benefits until the end of quarantine. We are honest with our entrepreneurs, we are partners. By joint efforts we will be able to achieve the desired result,” deputy chairman of Kyiv City State Administration Oleksandr Kharchenko said.
At the same time, he reported that in order to reduce the rate of the virus spread, it is necessary that patients and contact persons strictly adhere to quarantine and self-isolation.
In turn, representatives of the restaurateur community reported that the benefits introduced by the city in March 2020 made it much easier for them to bear the first quarantine restrictions.
Participants in the meeting also discussed the main problematic issues, and based on its results, clear positions were formed, on the basis of which the relevant department will develop a plan for further actions.

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30% OF SMALL AND MEDIUM-SIZED BUSINESSES IN UKRAINE GO ONLINE DURING PANDEMIC

Around 30% of small and medium-sized businesses (SMEs) in Ukraine went online during the pandemic, Director of the Department for Transaction Business of TAScombank Yevhen Zakalata has said.
“As for Ukraine, quite a lot of enterprises are developing online. We can see a growth in carriers, and not just under conditions of the pandemic, carriers grow by 20-40% annually in principle. Around 30% of all SMEs went online and every second business expects an increase online sales,” he said during an international conference titled “Online Banking – the Time of Innovation.”
Zakalata presented data from the Shop Express platform, a partner of the bank whose core business is development of websites for online shops. According to the data, 92% of 1,271 new online shops developed by the platform in March-May 2020 did not practice online sales before the pandemic.
“This does not mean that all of these clients today receive online payments, but at least they have started selling online, which is the first step taken by these clients towards carrying out transactions online,” he said.
According to the National Bank of Ukraine (NBU), as of January 1, 2020, the main owner of TAScombank was Sergiy Tigipko (99.93066% of shares).
According to NBU data as of June 1, 2020, TAScombank was ranked 18th in terms of total assets (UAH 20.675 billion) among 75 banks operating in the country.

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UKRAINIAN PRESIDENT: WE ARE DOING OUR BEST TO PROVIDE BUSINESSES WITH CHEAP LOANS

Ukrainian President Volodymyr Zelensky has said he will do his best to provide domestic businesses with cheap loans.
The president’s press service reported that on Friday the head of state met with farmers in Kherson region and the latter again complained about high interest rates for loans.
“The interest rates have been reduced to 8-10% per annum, but this is not enough to do business in a normal way. We understand everything and we will tackle the issue. At least the national banks will work for domestic entrepreneurs,” Zelensky said.
He recalled that the Affordable Loans at 5-7-9% program has already been launched and it will be improved.
“We are doing the utmost to provide [interest rates at the level of] 5-7-9%. I came from business, we took [loans] at 18-25% and that was terrible. The figures I am speaking about – we are doing our best to ensure these figures. And we will win,” the president said.
The entrepreneurs also touched upon the issue of cutting the VAT rate for a range of farming products, including livestock products.
Winemakers suggested the head of state to develop a comprehensive development program for winemaking.
Head of Kherson Regional State Administration Yuriy Husiev asked the entrepreneurs to collect their proposals and send them to the government so that it can develop a support program.
“We will consider the issue. Let’s send them [the proposals] to the government and the President’s Office – we’ll consider them simultaneously,” Zelensky said.

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BUSINESSES IN UKRAINE FORECAST FOREX RATE UAH 28 PER U.S. DOLLAR IN 2020

Businesses plan their 2020 budgets with the forex trade set at UAH 28 per U.S. dollar, according to the “Global Outlook” study by the European Business Association (EBA).
“When planning the budget for next year, owners use the average forex rate at UAH 28 per U.S. dollar. According to investors, the hryvnia will continue strengthening, as last year the rate was at UAH 30 per U.S. dollar,” EBA Executive Director Anna Derevyanko said while presenting the findings of the study in Kyiv on Monday.
As many as 104 top managers of EBA member companies were surveyed in August 2019 during the study. Some 77% of those polled expect their business will develop in 2020, with 45% of CEOs forecasting revenue growth by 10-20%.
At the same time, compared with the forecast for 2019, the number of companies that intend to expand staff has decreased. As the survey showed, 47% of companies plan to leave the number of employees at the level of last year, and 46% of CEOs shared plans for expanding their staff (last year their share was 58%), Derevyanko’s cited the results of the survey.
Only 33% of companies intend to launch new investment projects in Ukraine in 2020, the study indicates.
At the same time, more than 90% of CEOs are going to raise employees’ salaries by 5-10%, the survey showed.
The study was conducted for the fourth year in a row.

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UKRAINIAN BUSINESSES PREDICT ECONOMIC GROWTH AND CREATION OF NEW JOBS IN 2019

Ukrainian businesses predict further economic growth and the creation of new jobs in 2019 for the second year in a row, according to a survey of company heads conducted by the National Bank of Ukraine (NBU) in the fourth quarter of 2018. According to the website of the central bank, the growth of business activity is expected at enterprises of all types of economic activity, while the most optimistic enterprises are in the processing industry.
In the regional context, optimistic moods are preserved by companies from all regions, except for Kirovohrad. Enterprises from Ternopil and Lviv regions have the highest expectations.
“Expectations of high growth rates of economic activity are based primarily on the forecast of an increase in the total volume of sales of own produce, as well as investment spending on machinery and equipment,” the report said.
According to the National Bank, one-third of respondents expect that production will grow, and every second company believes that it will at least remain at the current level. The growth of the total sales of products and the improvement of the financial and economic state is predicted by respondents of all types of economic activity, except for enterprises of power and water supply sectors. Trade and processing enterprises have the highest expectations.

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