Vinnytsya and Frankivsk regions are the most comfortable regions for doing business in Ukraine

11-10-2018

These are the results of the “Regional Doing Business. 2018” rating, prepared by the Better Regulation Delivery Office (BRDO) and the Union of Ukrainian Entrepreneurs (SUP) for the second time.

The leaders got the following number of points: Vinnytsya region – 334 points, followed closely by the Frankivsk region – 332 points. The Zhytomyr region ranked third – 313 points.

The regions were assessed using the adapted World Bank’s methodology based on a survey of domestic entrepreneurs. The research was focused on 6 areas of interaction between entrepreneurs and the government, namely: starting a business; paying local taxes; obtaining construction permits; registering a land plot for real estate purposes; connecting to electricity networks and the quality of electronic services. The maximum amount of points that regions could get was 600.

“Honestly speaking, when we presented our first rating a year ago and made recommendations to local authorities regarding improving the conditions for starting and doing business, we did not really believe in progress. But there is one. The Vinnytsya region achieved the greatest progress overall. The Zhytomyr region ranks the first in terms of starting a business, and now it can motivate entrepreneurs to move to them and set up a business there. The Chernihiv region is ready to compete for construction facilities and has progress in land allocation. In turn, Kharkiv and Donetsk regions are the most friendly to business regions in terms of paying taxes,” the Deputy Head of BRDO Denis Malyuska said.

According to Denis Malyuska, this year a new component was also added – electronic services that turned out to be the most interesting and unexpected. When assessing them, we found out three types of behavior of regions.

“The first one is the most popular. It is not to notice the Internet and not to provide own services over the Internet. This is common even for such large cities as Odessa or Kharkiv. The second type is to use the nationwide system of electronic services. That’s how Dnipro and Khmelnytsky that joined the iGov did. The third type of behavior is to reinvent the wheel, that is own services. And here someone succeeded, for example, Lviv with its “Lviv citizen’s personal account” or Ivano-Frankivsk with its CNAP website (center for providing administrative services), while someone was not so successful – “Personal account of the Vinnytsya transparent office” is not so convenient-to-use as the mentioned above. And the personal account at the Kyiv web portal of administrative services was the only one that required to read the instructions to work there, but still these instructions didn’t help to use any of the requested services without a Kyiv citizen’s card,” the BRDO expert said.

“The main SUP’s objectives are to improve the business climate in Ukraine and deregulation. We hope that this year’s Regional Doing Business results will also have a positive impact on creating a comfortable business environment and attracting investments, which are so necessary for Ukraine,” the SUP’s Executive Director Kateryna Hlazkova added.

“In spite of the positive dynamics, Ukrainian regions have two global problems, and unfortunately, the situation is not changed. The first one is to connect to electricity networks. By this criterion, Ukraine ranks 128th in the world. This situation worsened in all regions over the last year. And the second problem is a share participation component that has become corrupt while being a kind of “stopping point” for investments in construction, especially for foreign investors,” the head of the BRDO Construction sector and SUP’s Vice President Olena Shulyal said.

“We compared leaders in the rating with other cities in the world, which are the leaders of the World Bank’s global DOING BUSINESS rating. That’s unexpected, but true for some components. For example, to obtain a construction permit in Zagreb (Croatia), it will take 146 days, in Almaty (Kazakhstan) – 123 days and in Chernihiv – only 67 days. You can start a business in Kosice (Slovakia) in 19.5 days, in Brazil (Portugal) – in 6.5 days and in Zhytomyr – in 7 days. We hope this trend will continue and we are glad to be involved in these changes,” the EU4Business|FORBIZ senior expert Joshua Badakh added.

Key recommendations of 2018 developed by the BRDO Office for regions:

Introducing electronic permits and approvals by joining national systems of electronic services or developing a local analogue;

Ensuring the transparency of urban planning documents by publishing them online;

Joining the #StartBusinessChallenge initiative;

Reducing the infrastructure share participation to 0;

Accelerating the process of registration of land plots for electricity transmission lines.

The presentation of the “Ease of Doing Business. Regional Doing Business” rating:

The rating’s landing is available at http://rdb.brdo.com.ua/

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