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Ukraine: Market Profile

Picture: Ukraine factsheet
Picture: Ukraine factsheet

1. Overview

The government has committed to an ambitious and wide-ranging reform agenda that has resulted in significant fiscal consolidation, a move to a flexible exchange rate, reformed energy tariffs, more transparent public procurement, simplification of business regulations, stabilising and restructuring the banking sector, a package of health reforms and the establishment of anti-corruption agencies. These reforms will need to be advanced further for Ukraine to achieve a sustainable recovery, a process that the World Bank's 2017-2021 Country Partnership Framework has been established to support. Ukraine needs stronger institutions to bolster the business environment and investment climate. If the country does not lower various barriers to entry and make business-friendly changes, it will continue to lag its international competitors. Institutional weakness also means that Ukraine is recognised as having one of the world's largest shadow economies, and formalising just a portion of that would benefit recorded economic growth. Despite the ongoing security crisis, Ukraine's proximity to the European Union (EU) and countries such as Russia and Kazakhstan, its large consumer base and its physical size are key factors that boost its long-term investment attractiveness. The country's main asset is its extensive human capital: a well-educated workforce provides a competitive advantage, producing more than 130,000 new engineers each year. Although poverty remains above pre-crisis levels, it has declined slightly owing to modest economic recovery and wage growth. In May 2019 the World Bank reported on strong consumption growth in Ukraine, but argued that to accelerate economic growth for an extended period of time the country should, among other reforming measures, unbundle the energy sector and open the agricultural land market.

Sources: World Bank, UkraineInvest, Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

March 2016
Ukraine joined the World Trade Organization (WTO) Agreement on Government Procurement, giving Ukrainian companies the right to participate in public procurement in 45 countries, including (EU) countries, Canada, Hong Kong, Japan, South Korea, Singapore, Taiwan and the United States. The agreement requires that Ukraine follows WTO rules for public procurement.

June 2017
The 2017-2021 Country Partnership Framework between the World Bank and Ukraine began with a focus on creating the conditions for fiscal and financial stability that will enable Ukraine to achieve a lasting economic recovery that benefits the entire population.

July 2017
Ukraine's association agreement with the EU was ratified by all signatories and came into force on September 1, 2017.

May 2018
Ukraine officially withdrew its representatives from all the statutory bodies of the Commonwealth of Independent States (CIS).

July 2018
The Ukraine State Fiscal Service published a guidance letter noting that Ukraine's tax treaty with Mainland China applied to all the territory of Mainland China where its legislation on taxation applies. The treaty did not apply to territories with a separate tax system, including Hong Kong. Based on this, a Hong Kong resident would be taxed in accordance with the Ukraine Tax Code on income sourced from Ukraine, regardless of whether or not residence certification is provided, because the tax treaty did not apply.

July 2018
Ukraine signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Multilateral Instrument, or MLI), committing the country to participate in the international tax cooperation network.

November 2018
The European Court of Human Rights ruled that Ukraine needed to pay compensation to those whose rights have been violated by the country's moratorium on the sale of farmland. In this month, Germany and Ukraine signed a social security agreement.

December 2018
The International Monetary Fund (IMF) approved a new USD3.9 billion loan agreement for Ukraine.

April 2019
The incumbent Petro Poroshenko was heavily defeated in the presidential election by anti-establishment reformist Volodymyr Zelenskiy.

May 2019
President Zelenskiy called a snap parliamentary election by bringing forward an election originally scheduled for October to July.

June 2019
Ukraine was the target for a large-scale government infrastructure cyberattack that affected the national bank, transport networks and manufacturers.

July 2019
In the Parliamentary election, President Zelenskiy's party Servant of the People won an absolute majority. The victory bolstered Zelenskiy's legislative mandate.

Sources: BBC country profile – Timeline, Reuters, Fitch Solutions

3. Major Economic Indicators

Graph: Ukraine real GDP and inflation
Graph: Ukraine real GDP and inflation
Graph: Ukraine GDP by sector (2018)
Graph: Ukraine GDP by sector (2018)
Graph: Ukraine unemployment rate
Graph: Ukraine unemployment rate
Graph: Ukraine current account balance
Graph: Ukraine current account balance

e = estimate, f = forecast
Sources: IMF, World Bank, Fitch Solutions
Date last reviewed: August 3, 2019

4. External Trade

4.1 Merchandise Trade

Graph: Ukraine merchandise trade
Graph: Ukraine merchandise trade

Source: WTO
Date last reviewed: August 3, 2019

Graph: Ukraine major export commodities (2018)
Graph: Ukraine major export commodities (2018)
Graph: Ukraine major export markets (2018)
Graph: Ukraine major export markets (2018)
Graph: Ukraine major import commodities (2018)
Graph: Ukraine major import commodities (2018)
Graph: Ukraine major import markets (2018)
Graph: Ukraine major import markets (2018)

Sources: Trade Map, Fitch Solutions
Date last reviewed: August 3, 2019

4.2 Trade in Services

Graph: Ukraine trade in services
Graph: Ukraine trade in services

e = estimate
Source: WTO
Date last reviewed: August 3, 2019

5. Trade Policies

  • Ukraine has been a member of the WTO since May 16, 2008.

  • Trade bureaucracy and customs delays are a significant hindrance to foreign investors. In recent years, Ukraine's trade flows have benefitted from low tariffs which have an average rate of 2.1%.

  • The size of import duties is variable and often depends on whether the item being imported is similar to a domestically produced item, in which case the duty is usually higher. Import tariffs range from 2% to 50%. Excise taxes can be up to 300%, with alcohol, tobacco, petroleum products and automobiles generally subject to higher excise duty.

  • Tariff charges are mostly lifted for trade between members of the Commonwealth of Independent States (Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan). A free trade agreement (FTA) is also in place with this group.

  • In 2015 Ukraine introduced an export ban on pine and unprocessed timber for a period of 10 years. There are export quotas in place for copper slag, ash and residue (waste) containing primarily zinc and raw minerals. There are also licensing requirements for the exports of certain goods containing alloyed ferrous metals, non-ferrous metals and their alloys.

  • Ukraine replaced export quotas on certain agricultural products with export tariffs (9% but not less than EUR17/tonne for wheat, 14% but not less than EUR23/tonne for barley and 12% but not less than EUR20/tonne for maize).

  • There are also import licensing requirements with respect to insecticides (except veterinary medicinal products), fungicides, herbicides, means to prevent germination and plant growth regulators, rodenticides (except veterinary drugs) and similar products (except disinfectants).

  • Ukraine has imposed various anti-dumping measures on a wide range of products, predominantly in the areas of textiles, vehicles, steel, some electrical goods, wood-fibre boards and machinery on goods coming from Russia, Mainland China and a few other Asian nations to protect domestic industries.

  • In November 2015, the Ukrainian authorities imposed a definitive countervailing duty on the import of cars from Russia. The rate of duty imposed is between 10.4% and 17.6%, depending on the company. The duty is in force from January 2016 for a period of five years.

  • Ukrainian exports have been hurt by Russia's ban on imports of dairy, chocolate, fruits and vegetables, which has contributed to Russia having fallen behind the European Union (EU) as Ukraine's largest export destination in recent years. However, the ongoing trade dispute between the United States and Mainland China is beneficial for Ukrainian exports of cereals.

Sources: WTO – Trade Policy Review, Global Trade Alert, Fitch Solutions

6. Trade Agreement

6.1 Multinational Trade Agreements

Active

  1. Ukraine-Israel: Signed in January 2019 during Ukrainian President Petro Poroshenko's state visit to Israel. Israel's import profile of Ukrainian goods is largely made up of agricultural goods such as wheat, corn, soybean and barley, as well as some metal products (such as raw iron bars). Ukraine's biggest import from Israel is pesticides, which is regulated through the need to obtain an import licence.

  2. Armenia-Ukraine: This agreement became effective in December 1996. Ukraine's exports to Armenia include meat, dairy products, vegetables and cereals. Armenia's exports to Ukraine include electro-technical products, alcoholic beverages and mineral water.

  3. Azerbaijan-Ukraine: This agreement on goods became effective in September 2006. The goods imported by Azerbaijan from Ukraine are meat, dairy and confectionery products, construction materials and medicines. The main goods exported from Azerbaijan to Ukraine are generally products of the fuel energy industry, chemical industry products and agro-industrial products. The trade turnover between the two countries amounted to more than USD700 million in 2018.

  4. Georgia-Ukraine: This agreement on goods became effective in June 1996.

  5. Georgia, Ukraine, Azerbaijan, Moldova (GUAM)(FTA): This agreement on goods and services entered into force on December 10, 2003.

  6. Kazakhstan-Ukraine: This agreement on goods became effective in October 2008. Ukraine's exports to Kazakhstan consist mainly of machinery, mechanical appliances, some cooking products and dairy produce. Kazakhstan's exports to Ukraine consist of mineral fuels, mineral oils and products of their distillation, zinc and articles thereof, iron and steel, and fertilisers.

  7. Kyrgyzstan-Ukraine: This bilateral agreement on goods became effective in January 1998. Ukraine's exports to Kyrgyzstan include pharmaceutical products, machinery, sugar and sugar confectionery, and cocoa. Kyrgyzstan's exports to Ukraine consist of raw hides and skins, mechanical appliances, electrical machinery and equipment, and glass.

  8. Tajikistan-Ukraine: This bilateral agreement on goods became effective in July 2002. The main items Ukraine exports to Tajikistan are sugar and sugar confectionery, cocoa and products thereof, paper and cardboard, and pharmaceutical products. Tajikistan's exports to the Ukraine consist mainly of fruits and nuts.

  9. Turkmenistan-Ukraine: This bilateral agreement on goods became effective in November 1995. The main items Ukraine exports to Turkmenistan are sugar, dairy produce, cocoa and cocoa preparations, and articles of iron and steel. Turkmenistan's exports to the Ukraine consist mainly of mineral fuels, mineral oils and products of their distillation, plastics and articles thereof, cotton, and machinery.

  10. Uzbekistan-Ukraine: This bilateral agreement on goods became effective in January 2006. Uzbekistan's imports from Ukraine mainly consist of iron and steel, the products of the light and chemical industries, as well as agricultural products. Uzbekistan supplies various types of engineering products, chemical products, pharmaceuticals and agricultural products to Ukraine.

  11. CIS Free Trade Area: After it came into effect in September 2012, this agreement created a trade area between eight of the 11 CIS states – Russia, Ukraine, Belarus, Moldova, Armenia, Kyrgyzstan, Tajikistan and Kazakhstan. Uzbekistan became the ninth member to join in April 2014. CIS states remain key trade partners, but Russia has suspended the application of the FTA for bilateral trade with Ukraine, meaning that barriers have been raised with the country's largest trade partner.

  12. European Free Trade Association (EFTA)-Ukraine FTA: Signed in June 2010, this comprehensive FTA with the four member countries (Iceland, Liechtenstein, Norway and Switzerland) of the EFTA came into force in June 2012 and includes trade in goods (industrial and processed agricultural goods, fish and other marine products), trade in services, investment, protection of intellectual property rights, government procurement and provisions on competition. Bilateral arrangements on agricultural products between the individual EFTA states and Ukraine also form part of the instruments establishing the free trade area on both sides.

  13. Canada-Ukraine: After the agreement's entry into force in August 2017, Ukraine eliminated tariffs on approximately 86% of its recent imports from Canada, with the balance of tariff concessions to be implemented over periods of up to seven years. This includes the elimination of tariffs on all Canadian exports of manufactured goods, fish and seafood, and the elimination of the vast majority of Ukraine's agricultural tariffs. Key product areas benefitting from either immediate or eventual duty-free access include beef, pulses, grains, canola oil, processed foods, animal feed, frozen fish, caviar, certain articles of iron and steel, industrial machinery, plastic products and cosmetics. Tariffs will also be eliminated on fresh and chilled pork, while frozen pork as well as certain pork offal and fat will benefit from an annual duty-free tariff rate quota that exceeds current exports by a large margin. Canada will eliminate tariffs on 99.9% of imports from Ukraine. This includes the elimination of tariffs on all manufactured goods, fish and seafood, and 99.9% of agricultural imports into Canada from Ukraine. Key products from Ukraine that will benefit from this duty-free access include sunflower oil, sugar and chocolate confectionery, baked goods, vodka, iron and steel, apparel, ceramics and minerals. The trade flows currently are not high, but the agreement will facilitate greater trade.

  14. EU-Ukraine Deep and Comprehensive FTA (DCFTA): This agreement established a free trade area between the EU and Ukraine. A DCFTA is part of each country's EU Association Agreement, and this particular one allows Ukraine access to the European Single Market in selected sectors and grants EU investors in those sectors the same regulatory environment in the associated country as in the EU. The agreement with Ukraine was provisionally applied since January 1, 2016 and formally came into force on September 1, 2017. Ukraine exports raw materials (iron, steel, mining products and agricultural products), chemical products and machinery to the EU. The main EU exports to Ukraine include machinery and transport equipment, chemicals, and manufactured goods. The EU has banned the import of goods originating in Crimea and Sevastapol, as well as investments and a number of services there until at least June 23, 2020.

Under Negotiation

Ukraine is currently discussing potential bilateral FTAs with Turkey, Serbia and Singapore.

Sources: WTO Regional Trade Agreements database, EFTA, Ministry of Foreign Affairs of Ukraine, Fitch Solutions

7. Investment Policy

7.1 Foreign Direct Investment

Graph: Ukraine FDI stock
Graph: Ukraine FDI stock
Graph: Ukraine FDI flow
Graph: Ukraine FDI flow

Source: UNCTAD
Date last reviewed: August 3, 2019

7.2 Foreign Direct Investment Policy

  1. Foreign companies are restricted from owning agricultural land, manufacturing rockets, producing bio-ethanol as well as some publishing activities. The presence of state-owned, often heavily subsidised, enterprises in many areas of the economy, particularly energy and mining, is also a deterrent to foreign involvement in those sectors.

  2. There are local content requirements in wind, solar and biomass power plants, certified as completely built-up and compliant with building regulations after July 1, 2013.

  3. Ukrainian law authorises the government to set limits on foreign participation in strategically important areas. In 2013 Ukraine prohibited foreign ownership of media. There is also a moratorium on agricultural land sales to foreign investors, which was introduced with the Land Code in 2001. This land moratorium has been temporary since 2002 but repeatedly extended, most recently in February 2019 and to remain in effect until January 1, 2020. The World Bank has stated that Ukraine land values would triple if restrictions on land ownership were cancelled.

  4. Ukraine has bilateral investment treaties (BITs) in force with 66 countries or economic unions, such as the Belgium-Luxembourg Economic Union. It has signed a further seven BITs that have not yet come into force.

  5. Ukraine signed a Trade and Investment Cooperation Agreement with the United States in April 2008. The agreement established a joint council on trade and investment which addresses a wide range of related issues, including market access, intellectual property, labour and environmental laws. Ukraine also has treaties with investment provisions in force with Canada, the EU and EFTA and through the Common Economic Zone Agreement with Belarus, Kazakhstan and Russia.

Sources: WTO – Trade Policy Review, ITA, United States Department of Commerce, UNCTAD, Kyiv Post, Fitch Solutions

7.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
Ukraine does not maintain special or free economic zones- Ukraine offers generous depreciation rates for most fixed assets, including property, plants and equipment for both foreign and domestic investors.

- The state is trying to facilitate the development of certain industries by providing some VAT and customs duty exemptions and/or a simplified tax regime in the priority areas of renewable energy, the IT industry, agriculture, shipping and aircraft manufacture.

- Until the end of 2022, new and modernising enterprises in qualifying industries can benefit from certain tax incentives as long as their investment value exceeds EUR3 million for large busineses, EUR1 million for medium businesses and EUR0.5 million for small businesses, and if they meet a series of additional requirements. These include the creation of new jobs (150, 50 and 25 for large, medium and small enterprises respectively) and that salary levels per employee must be at least 2.5 times the statutory minimum wage, which in 2019 means UAH10,432 per month.

Sources: United States Department of Commerce, UkraineInvest, Fitch Solutions

8. Taxation – 2019

  • Value Added Tax: 20%
  • Corporate Income Tax: 18%

Source: State Fiscal Service of Ukraine

8.1 Important Updates to Taxation Information

  • Transactions performed between a non-resident and its permanent establishment (for example, commercial representative office) in Ukraine are now considered controlled for transfer pricing purposes if their value exceeds UAH10 million (net of indirect taxes) for the corresponding tax (reporting) year.

  • On July 23, 2018, Ukraine signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Multilateral Instrument, or MLI) and this has been ratified by Ukraine's parliament, confirming the country is committed to participation in the international tax cooperation network. The provisions of the MLI may apply instead of any double taxation treaty currently in effect. In February 2019 Ukraine implemented currency reforms, liberalised cross-border transactions and simplified inward investment rules.

8.2 Business Taxes

Type of TaxTax Rate and Base
Resident company: Corporate Income Tax (CIT) rates18% on profits (insurance companies additionally pay 3% on income from certain insurance premiums)
Resident company: Capital Gains TaxTaxed as CIT
VAT20% on the sale of most goods and services, but a reduced rate of 7% applies to medicines and specific medical goods, whereas export of goods, the supply of international transport services and the supply of software products are all zero rated.
Withholding Taxes (applied to non-residents unless a double taxation treaty provides otherwise)- 15% on dividend income
- 15% on royalties
- 15% on interest
Social security contributions (all employers)Locally paid salaries are subject to the unified social contribution (USC) tax, borne by the employer at a flat rate of 22% (reduced to 8.4% for disabled workers) and capped at 15 times minimum monthly salary. Effective from January 1, 2019, the minimum monthly salary increased to UAH4,173, which in turn increased the monthly employer social security contribution cap to UAH62,595 for 2019. USC is not payable on the salaries of foreign citizens working in the representative offices of foreign companies located in Ukraine.
Stamp dutyStamp duty is levied at a rate of 1% on a variety of things, including filing court documents, notarisation of contracts, operations at commodity exchanges and sales of real estate.
Property TaxReal estate tax (RET) rates are set by local governments and cannot exceed 1.5% of the minimum salary per square metre. Based on the example of the USC, the maximum property tax rate for 2019 is UAH63 per square metre. However, many types of properties are exempt from RET, including industrial buildings, agricultural production buildings and non-residential small and medium-sized business premises such as street kiosks, stalls and markets. In addition to RET, when acquiring real estate a 1% special charge is levied that is payable to the state pension fund.

Source: State Fiscal Service of Ukraine
Date last reviewed: August 3, 2019

9. Foreign Worker Requirements

9.1 Foreign Worker Permits

A work permit is normally issued for the period of employment indicated in the employment contract, but for not more than one year. A work permit can be renewed for the same term for an unlimited number of times and free of charge. The employer secures the work permit and bears the cost, which in 2019 is UAH7,684 for a work permit valid for six months to one year. Regulations on employment conditions and access to basic social services are somewhat discriminative against regular migrant workers, and they are virtually non-existent for undocumented migrant workers. The Labour Code of Ukraine prescribes heavy penalties for employers who fail to comply with the requirements for the employment of foreign nationals.

9.2 Localisation Requirements

Foreigners can only be employed in positions for which no suitable candidate can be found domestically or from within the region. Work permits are required for employees of a foreign company performing work or services in Ukraine (provided that not more than 50% of employees engaged in fulfilling this contract are foreign nationals). The salary of a foreign worker cannot be less than 10 times the national minimum wage rate, although this requirement is not applied to preferred categories of foreign employee such as IT professionals.

9.3 Visa/Travel Restrictions

Citizens of Mainland China and Hong Kong, Australia and New Zealand require a visa, but citizens from some countries, including Armenia, Azerbaijan, Belarus, Georgia, Moldova, Russia and Uzbekistan, face no travel restrictions at all. EU citizens and those from Canada, the United States, Japan and the EFTA can stay for up to 90 days in any 180-day period.

Sources: Ministry of Foreign Affairs of Ukraine, Fitch Solutions

10. Risks

10.1 Sovereign Credit Ratings


Rating (Outlook)Rating Date
Moody's
Caa1 (Stable)21/12/2018
Standard & Poor'sB- (Stable)19/10/2015
Fitch Ratings
B- (Stable)08/03/2019

Sources: Moody's, Standard & Poor's, Fitch Ratings

10.2 Competitiveness and Efficiency Indicators


World Ranking
201720182019
Ease of Doing Business Index
80/19076/19071/190
Ease of Paying Taxes Index
84/19043/19054/190
Logistics Performance Index
N/A66/160N/A
Corruption Perception Index
130/180120/180N/A
IMD World Competitiveness60/6359/6354/63

Sources: World Bank, IMD, Transparency International, National Sources

10.3 Fitch Solutions Risk Indices


World Ranking
201720182019
Economic Risk Index RankN/A144/202139/202
Short-Term Economic Risk Score43.153.350.6
Long-Term Economic Risk Score40.843.945.7
Political Risk Index RankN/A179/202179/202
Short-Term Political Risk Score41.545.645.6
Long-Term Political Risk Score47.142.642.6
Operational Risk Index RankN/A117/201109/201
Operational Risk Score46.245.748.3

Source: Fitch Solutions
Date last reviewed: August 3, 2019

10.4 Fitch Solutions Risk Summary

ECONOMIC RISK
While Ukraine's economy is gradually recovering from the severe economic contraction of 2015, the economic and political situations remain precarious. Serious reforms are under way to address the fundamental problems in the Ukrainian economy. While the country has seen inflation gradually cool, the devaluation of the hryvnia has placed severe pressure on households, leaving savings and purchasing power significantly subdued compared with pre-crisis levels. Ukraine also faces high debt-servicing costs and the banking sector has experienced a sharp deterioration in asset quality on its foreign exchange loan books.

OPERATIONAL RISK
The operating environment in Ukraine has been severely dampened by the weak security situation in the east of the country as well as the accompanying deterioration in trade and diplomatic relations with Russia. However, with the shift in leadership since 2014, some key structural reforms have been undertaken. These reforms include significant fiscal consolidation, moving to a flexible exchange rate, reforming energy tariffs and social assistance packages, making public procurement more transparent, simplifying business regulations and restructuring the banking sector. The country has also moved towards establishing anti-corruption agencies and mandating asset disclosures for public officials. The country's main assets are its strategic location and extensive human capital. Ukraine's well-educated workforce provides a significant competitive advantage for firms, particularly if the risk of conflict eases in the quarters ahead. Ukraine will need to advance reforms on multiple fronts to achieve sustainable recovery and shared prosperity.

Source: Fitch Solutions
Date last reviewed: August 6, 2019

10.5 Fitch Solutions Political and Economic Risk Indices

Graph: Ukraine short term political risk index
Graph: Ukraine short term political risk index
Graph: Ukraine long term political risk index
Graph: Ukraine long term political risk index
 
Graph: Ukraine short term economic risk index
Graph: Ukraine short term economic risk index
Graph: Ukraine long term economic risk index
Graph: Ukraine long term economic risk index

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Economic and Political Risk Indices
Date last reviewed: August 3, 2019

10.6 Fitch Solutions Operational Risk Index


Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Ukraine Score48.358.5
49.0
52.0
33.6
Central and Eastern Europe Average62.1
57.563.566.361.2
Central and Europe Position (out of 11)11
7
11
11
11
Emerging Europe Average57.455.959.158.655.9
Emerging Europe Position (out of 31)26
13
26
23
28
Global Average49.6
50.349.849.049.2
Global Position (out of 201)109
51
106
81
154

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index

Graph: Ukraine vs global and regional averages
Graph: Ukraine vs global and regional averages
Country
Operational Risk Index
Labour Market Risk Index
Trade and Investment Risk IndexLogistics Risk IndexCrime and Security Risk Index
Estonia
71.462.9
76.3
72.174.3
Lithuania69.660.2
71.4
75.671.0
Czech Republic
69.560.067.873.776.5
Poland68.958.469.375.072.8
Lativa
66.760.767.171.567.4
Slovakia62.851.866.563.4
69.6
Hungary62.7
55.662.066.966.3
Belarus58.058.758.663.451.3
Russia56.563.658.663.040.6
Moldova48.741.751.752.249.3
Ukraine48.358.549.052.033.6
Regional Averages62.157.563.566.361.2
Emerging Markets Averages46.948.645.447.446.1
Global Markets Averages49.650.349.849.0
49.2

100 = Lowest risk; 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: August 3, 2019

11. Hong Kong Connection

11.1 Hong Kong’s Trade with Ukraine

Graph: Major export commodities to Ukraine (2018)
Graph: Major export commodities to Ukraine (2018)
Graph: Major import commodities from Ukraine (2018)
Graph: Major import commodities from Ukraine (2018)

Note: Graph shows the main Hong Kong exports to/imports from Ukraine (by consignment)

Graph: Merchandise exports to Ukraine
Graph: Merchandise exports to Ukraine
Graph: Hong Kong imports from Ukraine, HK-Ukraine trade
Graph: Hong Kong imports from Ukraine, HK-Ukraine trade

Graph: Merchandise imports from Ukraine
 

Note: Graph shows Hong Kong exports to/imports from Ukraine (by consignment)
Exchange Rate HK$/US$, average
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
7.83 (2018)
Sources: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: August 3, 2019


2018
Growth rate (%)
Number of Ukrainian residents visiting Hong Kong51,093
0.2

Source: Hong Kong Tourism Board


2018
Growth rate (%)
Number of European residents visiting Hong Kong1,961,448
1.7

Sources: Hong Kong Tourism Board
Date last reviewed: August 3, 2019

11.2 Commercial Presence in Hong Kong


2018
Growth rate (%)
Number of Ukrainian companies in Hong KongN/A N/A
- Regional headquarters
- Regional offices
- Local offices

Sources: Hong Kong Census and Statistics Department, Fitch Solutions

11.3 Treaties and Agreements between Hong Kong and Ukraine

  • Hong Kong and Ukraine do not have a comprehensive double taxation agreement.
  • Ukraine does not have a BIT with Hong Kong but does have one with Mainland China that entered into force on May 29, 1993.
  • Ukraine has a tax treaty with Mainland China that has been applicable since December 17, 1996, for dividend, interest, royalty payments and individual income tax, and since January 1, 1997 for CIT.

Sources: UNCTAD, State Administration of Taxation of The People's Republic of China

11.4 Visa Requirements for Hong Kong Residents

HKSAR passport holders can enter Ukraine without a visa for up to 14 days.

Source: Embassy of Ukraine to Mainland China
Date last reviewed: August 3, 2019

Content provided by Picture: Fitch Solutions – BMI Research
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