Rebuilding Ukraine: Today’s challenges and opportunities
The day to day, gruelling and extremely demanding struggle of Ukrainians against their Russian invaders is now nearly three years old, and the world hears almost daily of new attacks, casualties and destruction, adding to the damage already estimated at hundreds of billions of dollars.
And while faith and hope for peace remain strong, the protracted war makes it difficult to develop a unified plan for the reconstruction process, for securing sources of funding and international engagement. Pragmatism dictates that several scenarios should be considered, depending on circumstances, developments or election results. Today, discussions about what will happen resemble an equation with many unknowns. But one thing is certain. The whole civilised world unequivocally supports the rebuilding of a new, strong, European and democratic Ukraine. And when that reconstruction does take place, it will be a challenge on an unprecedented scale.
Ambitious reconstruction plans for Ukraine
In 2022, the Ukrainian government presented an impressive 10-year, USD 750 billion reconstruction plan. The aim, however, is not to return to pre-war conditions, but to create a new, technologically advanced country ready for full integration into the European Union.
The key points of the reconstruction plan are:
- Modernisation of infrastructure
- Development of modern technology
- Support for small and medium-sized enterprises
- Investment in energy and construction
And although details are not yet available, many companies are already investing in the Ukrainian economy, particularly in the energy and construction sectors.
Opportunities for investors
Although about 20 % of the country is affected by the hostilities, the remaining 80 % is relatively stable and enable people to live, work, study and develop. Surprisingly, the Ukrainian economy shows signs of resilience with the country’s GDP consistently growing (at around 5-6 % per year), despite difficulties such as shelling, power cuts and labour shortages.
Visits to cities such as Lviv and Kyiv reveal a surprising normality. Businesses are open, industry is functioning and life goes on in cafes, restaurants and shopping centres. But it should not be forgotten that the economy needs external investment and international support to stay afloat and continue this upward trend.
The future of the Ukrainian economy lies in the hands of small and medium-sized enterprises. They are the ones who will drive progressive economic growth and attract human capital. For investors, this means a number of opportunities such as:
- Investing in local companies with wartime experience
- Participating in infrastructure reconstruction projects
- Supporting innovative business start-ups
- Investing in the energy and technology sectors
The construction sector appears particularly promising, with current investment estimated at around USD 500 million.
Investment protection mechanisms
Aware of the risks associated with investing in a conflict-ridden country, the Ukrainian authorities are working to create a comprehensive war insurance system. The system will have three levels:
- Local insurers
- Institutions with agency functions
- State war risk insurance agency
With the support of the Ukrainian government, this system should provide the necessary sense of security to investors.
Legal support for investors
The legal and economic situation in Ukraine is complicated, so companies that decide to invest there need the best and most effective support. Such support should be available both in Poland and in Ukraine, where the projects will be physically implemented.
When it comes to providing legal services for investments in Ukraine, I can confidently say that we are the largest player in the market implementing such complex and challenging projects, says Markiyan Malskyy.
That’s because we have not only the legal knowledge and practical know-how, but also a deep understanding of local realities and the unique challenges of doing business in a war zone. We also have a multilingual team to help set up and manage companies, navigate Polish, Ukrainian and EU regulations, and advise on tax or tendering issues. Our aim is to make it easier for investors to enter the Ukrainian market and to play an active role in the country’s reconstruction. To date, we have completed more than 40 such wartime projects, adds the head of our Ukrainian Desk.
Our support includes:
- Corporate and commercial law
- Immigration matters
- Tax advice
- Dispute resolution
- Handling real estate transactions
- Facilitating international trade and investment
Summary
Despite the ongoing conflict, Ukraine offers a number of opportunities for the bold investor. Proper preparation, understanding local conditions and working with experienced partners are the keys to success.
By investing in Ukraine, Polish and European companies not only open the door to potential profits, but also contribute to the rebuilding and development of a country that demonstrates its steadfastness and determination to the world every day.
If you are considering investing in Ukraine, or need assistance and expertise in this area, we encourage you to contact us. Together we can help build a new, stronger Ukraine.
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