Doing Business--2006 in Ukraine

In the World Bank survey Doing Business-2006, Ukraine ranked 124 out of 155 countries on ease of doing business, significantly below Russia (79), Moldova (83), Kyrgyzstan (84), and Kazakhstan (86). While the country faired well on enforcing contracts (39), getting credit (75), and trading across borders (79), it lagged behind in the areas of property registration, investor protection, and tax payment procedure.

In fact, in terms of paying taxes Ukraine ranks 151. Ukrainian firms must make 84 payments, spend 2,185 hours to comply with tax requirements, and pay 51% of the firm's gross profit in taxes (see table). While the total tax payable is similar to the average paid in countries in the European and Central Asian region (50.2%), the number of payments and hours far exceeds the region's averages.

Protecting investors is an important condition for business development. For this factor, the indices vary between 0 and 10, with higher values indicating greater disclosure, greater liability of directors, greater powers of shareholders to challenge the transaction, and better investor protection.

On this last index, Ukraine compares unfavorably to all other Commonwealth of Independent States (CIS) countries, including Kyrgyzstan (5.7), Russia, and Kazakhstan (both 5). In enforcing  commercial contracts, Ukraine compares fairly well with its peers in Central and Eastern Europe and the CIS. It takes fewer days to resolve a dispute than in Bulgaria, Czech Republic, Hungary, and Kazakhstan. Costs in court and attorney fees, or the costs of an administrative debt recovery procedure in Ukraine are much lower than in Russia, Slovenia, and Kyrgyzstan.