InvestUkraine

An upcoming event about the benefits of investing in Ukraine will showcase the country’s opportunities for interested investors. The event will feature opening remarks from US Congressman Michael Grimm (R-NY) as well as presentations on the country’s investment climate, legal requirements for investments, and Ukraine’s national projects such as gas, recycling, and wind and solar energy projects, as well as the country’s developing sports and tourism infrastructure in order to potentially host the Winter Olympic Games in 2022.

Small businesses looking to invest in foreign markets, especially developing foreign markets, should take Ukraine into consideration. “Foreign nations with emerging markets are growing, and so is their middle class, opening up a new consumer market with spending power,” says Congressman Grimm. “These markets also provide an opportunity for a company to build a global brand with less competition and lower costs.” In a country like Ukraine, for example, there are also opportunities to expand into the surrounding markets in neighboring European countries, as well as Russia and the Middle East.

Businesses that would benefit most from investing in Ukraine include companies whose focus is environmentally based, such as waste management and recycling, as well as industries such as travel, tourism, and hospitality. Agriculture industries could also potentially benefit from investing in the country.

Investing in Ukraine, while potentially beneficial for an American company, is not a decision to consider lightly. “We think it’s a long term, bullish market. Anybody coming to Ukraine should look at is as such. It’s not a place to get rich quick,” says NY Report contributing editor Alexander Gordin. Gordin is also the managing director of Broad Street Capital Group, one of the hosts of the InvestUkraine event.

If you and your company are interested in investing in the country, says Gordin, it’s incredibly important to understand the country’s political, regulatory, and business climates. This is particularly important because of Ukraine’s complex politics. Doing research on the country beforehand is imperative. “The more time spent preparing, the better served a company will be prior to going in,” he says. For research, Gordin recommends using the CIA.gov website, the U.S. Commercial Service website, The American-Ukrainian Chamber of Commerce and Industry, and the U.S.-Ukraine Business Council. Gordin also recommends visiting the country beforehand and spending time there in order to understand the country’s people. “Ultimately, businesses transactions take place between people,” he says. “It’s a very proud nation with a long, rich history.”

Because politics and businesses are so closely aligned in Ukraine, it’s also important for investors to understand the country’s political system. Prudent investors should not align their business with a particular party, however, but respect the party in power.

Also, says Gordin, “patience is important. It is important to realize the bureaucracy is very well entrenched.” Investors should also make sure to follow through at all times and all levels of their projects. “Even though an agreement is reached at high levels, unless it’s followed through thoroughly, its implementation may get bogged down in midlevel bureaucracy.”

However, for a company that invests the time and research beforehand, the rewards can be plentiful. “Ukraine is a great place to do business. It’s a country with tremendous potential with a lot of people in the middle of Europe. It’s a very attractive marketplace,” says Gordin.

Congressman Grimm agrees. “Last year, the United States exported $240 billion worth of goods to the EU, and had a $281 million positive trade balance with Ukraine,” he says. “It has tremendous growth potential and there are benefits to deepening our economic ties. With Europe poised to enact a historic free trade agreement with Ukraine, we don’t want to be left behind.”

InvestUkraine takes place on Monday, November 7th 2011. For more information, please email rsigalus@broadstreetcap.com.