Foreign direct investment in Ukraine is growing even during the war. Find out more about the current investment climate and prospects, as well as who is investing in Ukrainian companies and what challenges investors face

Legal assistance in starting and doing business in Ukraine

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In 2023, the volume of foreign direct investment (FDI) in Ukraine exceeded the figures of some pre-war years. And in January-May 2024, net FDI inflows to Ukraine amounted to $2.2 billion, of which $1.5 billion was reinvestment of earnings. For comparison, in the same period in 2023, FDI inflows amounted to $2.1 billion.

At the same time, according to the NBU, as of the end of the first quarter of 2024, the total volume of foreign direct investment in Ukraine amounted to $55.8 billion.

We told you where Ukrainians invested in 2024 in this article.

Foreign investment statistics and investment climate in Ukraine

Despite the increase in investment in 2023, most of the funds are reinvested earnings of foreign companies already operating in Ukraine. The European Business Association assesses the investment climate in Ukraine as restrainedly negative. Most foreign investors are currently observers, in part because of the high risks involved.

We have described in detail how to obtain a permanent residence permit in Ukraine through investments in this article.

Sources of foreign investment: from which countries do they invest the most?

According to delo.ua, the largest amount of foreign direct investment in 2024 came from the following countries:

– The Netherlands - $1.19 billion.

– Cyprus - 1.13 billion dollars.

– The United States - $361 million.

– United Kingdom and Ireland - $297 million.

– Luxembourg - $284.5 million.

– Austria - 276.8 million dollars.

– France - 263.7 million dollars.

– Poland - $191.6 million.

– Switzerland - $189.2 million.

– Hungary - $101.9 million.

It should be noted that since the beginning of the war, foreigners have established more than 2,600 companies in Ukraine. Read this article to find out who most often starts a business.

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What are the challenges for businesses and investors in 2024?

It is clear that the main challenges for business in Ukraine are currently related to military risks. Other key issues include stable energy supply, employee safety, asset preservation, labor shortages, rising prices for raw materials and energy, high logistics costs, and lack of affordable financing.

To find out what industries foreigners consider the most profitable and what risks stop them from investing there, please follow the link.

Prospects for investing in Ukrainian companies

Despite the risks, foreign investors see prospects in Ukraine. And government support for projects with significant investments, particularly in energy, transportation, agriculture, and critical materials, helps attract investment.

So, despite the difficult situation, Ukraine continues to attract the attention of foreign investors who see great opportunities for development. Government support, a favorable investment climate and prospects for recovery from the war create conditions for further growth of investment in Ukraine.

If you need advice on various issues related to starting and running a business in Ukraine, including attracting foreign investment, we recommend that you seek professional help. Visit Ukraine lawyers will help you with all the nuances and pitfalls. To apply for a consultation, please follow the link.

We remind you! A study was conducted in Ukraine on the number and type of businesses with foreign capital. Read our previous article to find out which regions have the most such organizations and where investments come from.

Photo: Freepik

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Ihor Usyk is the Head of Legal Department at Visit Ukraine

If you want to start your own business in Ukraine, you can get advice from my colleagues.
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