INNOVATION & OPPORTUNITY June 2020 Kyiv, Ukraine - - PowerPoint PPT Presentation

Ukraine is INNOVATION & OPPORTUNITY

June 2020 Kyiv, Ukraine

UkraineInvest

Your Investment Matters

About UKRAINE

UkraineInvest

Your Investment Matters

Ukraine

42 M (2019) 603,700 km2 Kyiv

Ukraine THE BASICS

Government

Unitary Parliamentary Presidential

Currency

Ukrainian hryvnia (UAH)

Exchange rate

USD/UAH 26.7 (June 2020)

GDP (PPP)

$390 billion (2018)

Real GDP growth

↑3.3% (2019)

Economy

Major industries: : energy, metallurgy, chemical industry, manufacturing, massive high-tech industrial base, world player in agriculture, fast developing IT sector

Foreign relations

17 FTAs with 46 countries (EU, EFTA, Canada, Israel, etc. Strategic goals: European and Euro-Atlantic Integration) 3

Sources: World Bank, State Statistics Service

• f Ukraine, Dragon Capital

Predictable & stable EMERGING MARKET

Ukraine’s economy has been steadily growing for 4 years

GDP Growth, , %

(comparing to respective period in previous year)

Ease of Doing Business Index by WB EBA Investment Attractiveness Index

(index, as at year end)

76 71 64

2016 2017 2018 2019 2020

80 81 96

2015 2016 2017 2018 2015

2.6 2.9 3.0 3.1

“UKRAINE IS OPEN FOR BUSINESS because of THE SUCCESS OF REFORMS”

EBRD President Suma Chakrabarti, in Davos 2019

• 9.8

2.3 2.5 3.3 3.3

2015 2016 2017 2018 2019

Sovereign credit RATINGS GROWTH

2019 2018 2017 2016 2015 2014

B B- B- B- CCC CCC B B- B- B- CCC CCC Caa1 Caa1 Caa2 Caa3 Caa3 Caa3

5

UkraineInvest

Your Investment Matters

B3

2020

B B

Ukraine is responding TO GLOBAL TRENDS

Invest st

6

supplier of organic nic products to EU Ukraine is Top-5

• wned by

multinational corporations 110+ R&D centers in Ukraine including DCFTA with EU 17 FTAs with 46 countries new engine ineeri ring ng graduates annually Over 130,000

Ukraine’s COMPETITIVE ADVANTAGES

Invest st

8

Ukraine competitive ADVANTAGES - LABOR

Competitive Labor Costs

Average Salary*, USD (as of Dec 2019)

1

*salary includes employee social security tax, personal income tax and/or other employee taxes, if any

Skilled Human Capital

2

Top European Countries by Number of Engineering Graduates, thousand people

130 105 93 75 71 66 56 Ukraine France Germany Turkey UK Poland Spain 48 39 Italy Romania 1460 520 570 1230 1295 1315 1315 Ukraine Serbia Romania Hungary Slovakia Poland Czech Republic Ukraine

Ukraine competitive ADVANTAGES - LABOR

Sources: http://www.tradingeconomics.com

Shrinking Work Force in CEE

3

• historically low unemployment rates
• dependence on seasonal workers

from Ukraine (~2 mln Ukrainians temporarily work in Poland)

• migration of CEE natives

to Western Europe

9

PROBLEM

• f work force

availability in CEE

Unemployment Rate, %

(as of Oct 2019)

10

Ukraine competitive ADVANTAGES - UTILITIES

Sources: https://ec.europa.eu/eurostat; http://www.nerc.gov.ua/; https://tradingeconomics.com (data for 2019) Ukraine Serbia Romania Hungary Slovakia Poland Czech Republic Ukraine Serbia Romania Hungary Slovakia Poland Czech Republic

Natural gas, EUR/gigajoule

7.50 7.16 0.0767 0.0821 0.0801 0.0757 0.0656 0.0921 8.60 7.78 9.14

Electricity, EUR/KWh

0.0861 10.85 9.37 9.14

Ukraine competitive ADVANTAGES - TAXES

11

Sources: https://ec.europa.eu/eurostat; http://www.nerc.gov.ua/; https://tradingeconomics.com

Hungary Czech Republic Slovakia Poland Romania Serbia Ukraine Ukraine Serbia Hungary Romania Poland Slovakia Czech Republic 19 21 19 9 16 15 18 20 20 19 27 23 20 21

CPT Rate, % VAT Rate, %

12

Ukraine competitive ADVANTAGES - TAXES

Payroll tax rates

22 18 17.15 19.9 10 2 35 10 24 19 15 35.2 13.4 25 22 14 32 34 11 22

Ukraine Serbia Romania Slovakia Hungary Poland Czech Republic

Social Security Tax (Employer) Rate, % Social Security Tax (Employee) Rate, % Personal Income Tax Rate, %

Key sector OPPORTUNITIES

INNOVATION TECHNOLOGIES in Ukraine

create their

• wn product

work as an in-house center for the parent company

70 %

provide IT services to a wide range of clients

15 % 15 %

work as an in-house center for the parent company

> 4,000

tech companies

$510 M

total value of venture capital deals in 2019

100+

Fortune 500 companies have chosen Ukrainian IT services

184k+

software developers (the number is expected to rise to 250k by 2025)

3 The ITC industry is now a major driving force of Ukraine’s economy

IT industry has grown nearly 40 times over the last fifteen years – from $110 million in 2003 to about $4.5 billion in 2018

21

IT service providers with offices in Ukraine in the 2019 Global Outsourcing-100

2

largest export service industry nd the

INNOVATION TECHNOLOGIES in Ukraine

15

LARGE IT COMPANIES In Ukraine Dnipro

170 + 9 K+ K+

Kyiv

300 300 + 40 40 K+ K+

Kharkiv

40 400 + 25 25 K+ K+

Odesa

150+ 150+ 8 K K+

Lviv

250 50 + 20 20 K+ K+

16 IT companies IT specialists

From more concentrated to lessIT clusters

• Export of rapeseed
• Export of honey
• Export of corn
• Production & export of barley

Land reserves

33 mln ha of arable land Huge reserves unused

Efficiency upgrade

Modern management practices New equipment High quality seed and inputs Logistics and distribution

Growth potential

№ 3 in world food production by 2020 Potential for tripling of outputs. Huge export potential

Value added

Food processing potential

• plant oils
• beverages
• dairy products
• frozen foods

Opportunities

17

Key Sector opportunities - AGRIBUSINESS

Ukraine’s Place in the Global Food Market

• Production

Sunflowers seeds

• Production & export
• f Sunflowers oil

1 3 4

AGRI-INVESTMENT

in Ukraine 2015-2019

1.8 $

billions

25

New production facilities

2.5 k

New jobs since 2015

$ 670

Agri-logistics

million

$ 280

Farming

million

$ 350

Seed oil production

million

$ 280

Seeds production

million

$ 180

million

Food production

18

Manufacturing ground-base for Europe, Asia and Middle East markets 17 FTAs with 46 countries – swift integration into the global value chains Highly skilled and cost competitive workforce Availability of industrial parks with preferential fiscal regime and other local investment incentives Wide selection of greenfields and brownfields

Opportunities

19

Key Sector opportunities - MANUFACTURING

150+

launches of Ukrainian rockets since independence in 1991

15+

global fashion brands have production facilities in Ukraine

60 K

engineers, specialists and workers employed in automotive industry

115

companies licensed to manufacture medicine

Key figures OF UKRAINE`S MANUFACTURING

MANUFACTURING INVESTMENT

in Ukraine 2015-2019

1.8 $

billions

36

new production facilities

29 K

jobs created since 2015

$ 1,030

Metallurgy million

$ 355

Furniture production million

$ 40

Other million

$ 140

Automotive million

$ 100

Sports equipment million 20

Proven reserves

10.3 41.9 123.2 10 5 19

Key Sector opportunities –

Years of production Annual production

Opportunities

Launch of e-auctions for oil and gas E&P licenses and PSA tenders Open access to geological data Deregulation in oil and gas sector Attractive gas transmission tariff for upstream companies Competitive tax regime for oil and gas production Single payment for license 21 21

OIL & GAS

22

Major foreign companies IN UKRAINE’S GAS SECTOR

Trading Services E&P

Ukraine’s GROWTH AGENDA

Invest st

24

Ukraine’s GROWTH AGENDA

Attracting $50 Billion FDI in 5 years

EoDB LAND MARKET REFORM PRIVATIZATION & CONCESSIONS

KEY DRIVERS

AGRI-FOOD 25

Investment climate IMPROVEMENT

PASSED LAWS

During the work of the Verkhovna Rada of Ukraine of the 9th convocation, a number

• f important laws aimed at unlocking Ukraine’s investment potential were adopted

*’Split’ law dissolves the National Commission for State Regulation of Financial Services Markets and splits up its regulatory functions between the NBU and the National Securities and Stock Market Commission. The law was welcomed by Ukraine’s international partners and will ensure transparency, reliability, and effectiveness of nonbank financial sector

ENERGY SECTOR

Law on unbundling

• f Naftogaz

FINANCIAL SERVICES

Law on protection of the rights of financial services consumers Split’ law*

INFRASTRUCTURE

Concession law

PUBLIC PROCUREMENT

Law on improvement

• f public procurement

TECHNICAL BARRIERS TO TRADE

Law on the joint transit regime and introduction of the national electronic transit system Law on authorized economic operator Amber mining legalization

INVESTMENT

Demonopolization

• f alcohol industry

Law on reducing pressure

• n business by market

surveillance authorities

26

Investment CLIMATE IMPROVEMENT

A number of investment related legislative initiatives are high

• n the agenda of the Ukrainian

Government and Parliament INITIATIVES INFRASTRUCTURE

Law on inland waterways Law on railway transport

ENERGY SECTOR

Initiatives to stimulate natural gas production Law on the Incentives of the Production and Use of Liquid Biofuels

INVESTMENT

Launch of large privatization Gambling legalization Land market reform

AGRI-FOOD

We are the government’s investment promotion office created to attract and support investment in Ukraine.

NAVIGATION & GUIDANCE KEY SECTOR EXPERTISE INTRODUCTIONS INFORMATION & INSIGHT REGIONAL SUPPORT ADVOCACY

Your investment

Cabinet of Ministers of Ukraine 12/2 Hrushevskoho St., Office 148 Kyiv-01008, Ukraine www.ukraineinvest.gov.ua +38 044 256 7832

MATTERS

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Invest st