President of the American Chamber of Commerce in Ukraine
Is it easier for business to communicate with public authorities for the last 2 years?
Ukrainian State authorities have become more open, showing more transparency in their actions and declare their readiness to have an active and effective dialogue with business. The American Chamber of Commerce in Ukraine holds meetings with state officials on a regular basis; in 2016 we had 719 policy events, including 119 meetings at the highest level and all our efforts resulted in 50 high-priority Chamber-driven success stories that became key factor for the improvement of doing business in Ukraine as well as resulted in positive transformations of Ukraine’s economy. We appreciate that today Ministers and Heads of state agencies are positively responding to the initiatives to organize joint activities and ready to cooperate with the business community to improve the Ukrainian economy.
What do you think are the main obstacles for business in Ukraine?
In December 2016, I commented for the Financial Times and said that «tectonic shifts» took place in Ukraine, to the betterment of the business environment. And that is true. But a lot still needs to be done in Ukraine to improve the conditions of doing business. Nowadays, the main obstacles for business remain corruption, flawed judicial system and, above all, lack of investors’ confidence in this system. The sooner we solve these problems, the quicker business will come.
You said a lot regarding simplification of tax system in Ukraine. What would you like to see ideally?
Tax policy is very important for our Member Companies. We were an active participant of the process of drafting amendments to the Tax Code of Ukraine in the Working Group of the Ministry of Finance of Ukraine last year. Thus, the Chamber welcomes the final adoption of the respective Draft Law by the Verkhovna Rada of Ukraine on December 21, 2016 as it reflects numerous proposals from the Chamber Members, in particular introduction of a Single Public Register of VAT refund and simplifying the procedure of VAT refund at all, introduction of full e-cabinet of taxpayer, improvement of transfer pricing provisions, etc. Now following signing of this Act by the President and its entering into force, it is expected that proper implementation of this Act will reduce unreasonable pressure on business while increasing the transparency and quality of tax administration in Ukraine. On a separate note, I would like to stress that business community needs predictability of tax legislation. As a first quick win for this year we see the solution of the problem with CIT advanced payments offset, including those made by branches, and start of the process of negotiating and signing of Advanced Pricing Agreements for transfer pricing purposes.
You said in interview that the best time for investments to our state is right now. Why?
I am sure that now is a good time to invest in Ukraine, because moving in the right direction, last year Ukraine was making steps towards implementation of European standards and harmonization of Ukrainian legislation with the European one, successfully implementing reforms in various fields with the help of continuous efforts of business community and the Government. And we saw the first signs of economic growth. Of course, the situation now is challenging for business, but nevertheless has many opportunities to offer. It is all about perception. In 2016, two investment bodies have been launched in Ukraine in order to promote investment opportunities of Ukraine — Ukraine Investment Promotion Office and National Investment Council under the President. I am pleased that the Government as well as Chamber Member Companies make efforts to attract investors here in Ukraine and are ready to present Ukraine on the international arena.
What areas of Ukrainian economics are the most interesting for foreign investor?
Ukraine is an agricultural powerhouse, so, no doubts it’s first of all the agricultural sector. IT and energy sectors are also popular among the investors, because according to experts’ views, these are two sectors in which they are ready to invest. Meanwhile, a large number of foreign investors simply do not see where they can invest, so we have to show them. The main thing is to ensure direct foreign investments. That is not a surprise that investors are investing in real projects, not in a particular sector of economy, so it is important to create competitive investment proposals.
What are the main tasks for The American Chamber of Commerce in Ukraine today?
The American Chamber of Commerce in Ukraine focuses its activities on 3 main directions: B2G — driving the dialogue between business and Government, B2B — continuously creating opportunities for business to business partnerships and B2U — promoting Ukraine internationally as an attractive investment destination. Our vision is to be the key driver of positive changes in the Ukrainian community and business environment. We seek for real fundamental changes to be done here, in Ukraine. This year we have to spend all our energy, persistence and efforts on real actions to help the Government to finally outfight corruption and implement extremely important and vital reforms in Ukraine. Striving for improvement of investment climate and revival of Ukraine’s economy, we will continue our activities in various fields and sectors of economy including healthcare, in particular — registration and reimbursement of medicinal products and increasing the transparency of public procurements; in infrastructure, banking and energy sectors it will still be crucial to ensure transparency of all processes based on balance between state interests and business needs; in the sphere of intellectual property rights protection, contributing to the development of comprehensive legal and institutional framework related to Intellectual Property Rights issues and promoting innovations and creativity in Ukraine. Among other priorities stand timely and transparent process of VAT refund and further improvement of tax administration, improvement of procedures for obtaining sanitary and hygienic conclusions, as well as seeds’ certification and pesticides registration. The bottom line stays solid and clear — business demands decisive reforms, smart deregulation, and corruption-free environment. In this context successful and efficient judicial reform is of utmost importance.