Bureaucracy in Ukraine: a moderate obstacle to business, but better than in some neighbors

Does bureaucracy hinder business in Ukraine? A new study shows that our country is inferior to Poland in terms of simplicity of regulatory procedures. Find out how Ukraine compares to other countries in terms of regulatory burden, why starting a business is more difficult but running a business is easier, and what reforms can improve the situation

Legal assistance in starting and doing business in Ukraine

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Bureaucracy has always been one of the main challenges for entrepreneurs, especially in transition economies. Does Ukraine really suffer from an excessive regulatory burden, and how do we compare to our neighboring countries? The new Bureaucracy Index 2024, developed by European experts, helps to put the record straight.

💡 Do you want to start or run a business in Ukraine without unnecessary bureaucratic hassle?

Legal nuances, permits, taxes, registration - all this may seem complicated. Our lawyers will help foreign nationals set up a business quickly and safely, in compliance with all legal requirements. Get a consultation and start your business without any difficulties!

How was the bureaucracy assessed?

The Bureaucracy Index is an international study that has been assessing the administrative burden on small and medium-sized businesses (SMEs) since 2016. In 2024, it was calculated for six countries:

Ukraine

Poland

Slovakia

Czech Republic

Hungary

Georgia

The methodology involves estimating the time that entrepreneurs spend starting and running a business. The study is based on two simulated companies - a small industrial firm and a small hotel.

The results of the Index show that Ukraine has one of the best scores in the region, second only to Poland.

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Bureaucracy when starting a business: Ukraine lags behind

The highest regulatory burden in Ukraine is observed at the stage of starting a business.

🔹 Starting a small industrial enterprise: 64 hours (the worst indicator among the countries surveyed)

🔹 Launching a hotel: 79 hours (also the slowest among competitors)

For comparison, in Poland, you can register an industrial SME in just 19 hours and a hotel in 24 hours. In other countries, this process takes 37-46 hours.

Why does it take so long? The main reasons are complex regulations, bureaucratic procedures, and strict sanitary requirements for hotels.

Starting a business correctly is not only about registration, but also about legally competent management. Many entrepreneurs face difficulties in choosing the optimal form of ownership, tax regime or formalizing labor relations. To avoid risks and penalties, it is worth consulting with lawyers who know all the intricacies of Ukrainian legislation in advance.

Doing business: one of the best positions in the ranking

But when the company is already operating, the bureaucratic burden in Ukraine is much lower than in most of its neighbors.

🔹 Administrative costs for industrial SMEs - 192 hours per year (second only to Poland - 148 hours)

🔹 Administrative costs for hotels - 200 hours per year (also second after Poland)

For comparison:

❌ Slovakia - 272 hours (34 working days)

❌ Georgia and the Czech Republic have significantly higher rates

Ukraine is also ahead of other countries in terms of ease of operational management. We spend 22% of the total administrative burden on these processes, while in Poland and the Czech Republic this figure is much higher.

However, there are some weaknesses:

❌ 40% of all time is spent by entrepreneurs on personnel management

❌ High time spent on statistical reporting

Legislative changes: a record level in Ukraine

Businesses have to constantly adapt to new laws. In 2024, Ukraine recorded the largest number of changes in legislation - 35!

These changes affected:

🔸 Income taxation

🔸 Labor Code of Ukraine

🔸 Commercial Code of Ukraine

A large number of new laws creates an additional burden for entrepreneurs, as each change needs to be understood, adapted and complied with.

Overall rating: Ukraine is second after Poland

Despite all the difficulties, Ukraine was ranked second in the ease of doing business ranking.

Final results:

1st place - Poland (lowest bureaucratic burden)

2nd place - Ukraine

3rd place - Czech Republic

The worst situation is in Slovakia

Experts note that this is an unexpectedly positive result, as four of the countries surveyed are EU members.

According to experts, reducing the bureaucratic burden should be a constant priority for the government, as excessive regulation

❌ Reduces business profitability

❌ Scares away investors

❌ Stifles innovation and economic growth

Even the European Union already recognizes the problem of excessive bureaucracy. The Letta-Dragi report notes that stringent regulatory requirements hinder the competitiveness of European companies against the US and China.

Why should you contact our lawyers to start and run a business in Ukraine?

🔹 Assistance to foreign and Ukrainian entrepreneurs - registration, licenses, contracts

🔹 Legal support at all stages - from start-up to business development

🔹 Minimizing risks and bureaucracy - work without unnecessary obstacles

🔹 Up-to-date solutions in accordance with legislative changes

🚀Start a business in Ukraine with professional legal support! 

We remind you! Visit Ukraine now offers professional translation of documents of any complexity with notarization by experienced translators in Ukraine. Read about the full range of services for the translation of passports, diplomas, certificates and other documents, as well as the terms and prices in our previous article.

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