Last year, just over 4,000 companies were closed in Ukraine, which is half as many as in 2021, but the quantitative figure does not reflect the full picture. Find out which businesses were most often closed during the war and which Ukrainian cities are leading in terms of the number of liquidated companies

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During the full-scale war in Ukraine, agricultural enterprises suffered the most. This is evidenced by the results of YouControl.Market's analysis. However, this is not the only sector with a large number of business closures. In total, more than 4,000 companies were closed in Ukraine in 2023, which is half as many as in 2021. However, this figure is not representative of the market, as the number of newly established companies in 2021 was almost twice as high as in 2023.

Read this article to find out how the number of cafes, restaurants, and coffee shops in Ukraine has changed since the beginning of the war and who has become the leader in the number of newly established establishments.

How many companies have been opened by foreigners in Ukraine during the war is described in this article.

Which business was closed most often?

In total, 1261 agricultural enterprises closed during the war, which is the highest rate among all industries. The share of closures of agricultural enterprises among all those closed in 2023 was a record 14.9%. In the first quarter of 2024, the closure of agricultural companies increased even more and already accounts for 18% of all closed companies in Ukraine.

Agricultural companies are followed by wholesale trade, real estate and construction. The share of closures of companies providing legal services has increased especially significantly. 

In the wholesale trade sector, 440 companies closed, and 340 real estate companies closed. Another 260 construction firms ceased operations in 2023. In the legal sector, 224 companies closed, which is more than in pre-war 2021, when 197 firms closed. Negative dynamics among law firms is also observed in the first quarter of 2024, with 104 companies closed. While in 2021 the share of closed companies in the sector was only 2.3%, in the first quarter of 2024 it more than tripled to 9.8%.

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Geography of business closures: where are companies liquidated most often?

Kyiv became the leader in terms of the number of closed companies in 2023, with 650 closed enterprises. Companies were also actively closing in Odesa region - 371, Dnipropetrovska region - 297, and Lviv region - 292. These data show that the absolute number of closed companies is closely correlated with the total number of operating companies and the level of economic development in the region, so this indicator is not very informative, unlike indicators of the dynamics of changes.

Roman Kornyliuk, financial analyst at YouControl, explains: “The growth of the share of these regions in the liquidation of businesses was partly influenced not only by the deterioration of the business climate as a result of hostilities, but also by the tendency of financially weakened companies to relocate from neighboring occupied communities to the territories of these regions controlled by Ukraine.”

On the other hand, a significant decrease in the share of business closures in the total number of business closures was observed in such regions as Kherson, Kharkiv and Donetsk. Unfortunately, this trend is related to the occupation of some regions, not to the improvement of business conditions. After all, the fewer companies that remain in the legal field of the region, the proportionally lower the number of bankruptcies and business closures will be compared to the period before the occupation.

In which industries are businesses being closed less intensively?

Despite the overall negative dynamics, some industries have seen a decrease in the number of liquidations. The water supply, woodworking, retail and wholesale trade sectors showed a decrease in the level of business closures. This is due to industry specifics: water supply, construction, and catering are critical infrastructure, which is of particular importance in times of war.

We remind you! The State Agency for Tourism Development has calculated taxes from the tourism industry for the first quarter of this year. Thus, the total amount of budget revenues increased by 61%. In this article, we will tell you how much money we are talking about and which industry paid the most.

Want to know more? Read the latest news and useful materials about Ukraine and the world in the News section.

Ihor Usyk is the Head of Legal Department at Visit Ukraine

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