One of the first questions asked by foreign clients is the return of investment or of dividends received from the investments. Today, despite numerous guarantees from the state, returning funds invested or receiving dividends is extremely difficult.
First, because of the well-known NBU (National Bank of Ukraine) monetary Regulation of March 14, 2016 № 410 “On the settlement of the situation on the monetary and foreign exchange markets of Ukraine”, the complication in purchasing foreign currency for the payment of dividends to foreign investors is “temporarily-permanent”.
Second, in case of company liquidation or termination of work in Ukraine, a foreign investor may face difficulties in returning invested funds due to these currency restrictions.
Thus, the question is whether the foreign investor wants to invest money without having the opportunity to make a profit from it. Of course, there is a variety of options for solving this issue, ranging from semi-legal methods to loans (when a foreign investor lends money himself and returns it, receiving funds at least in that way), but for a healthy investment climate, the state should not be in any way complicated. Sanctions, although they are aimed at counteracting the money laundering from Ukraine, instead of point-based application to law-breakers, cause problems for everyone.
Other issues some often mention are the political-military and economic situation in Ukraine. But these problems also can be solved: it is possible to insure the political risks of the loss of foreign investments within the territory of Ukraine (Political Violence Insurance). Various institutions, for example, Overseas Private Investment Corporation (USA), can insure such risks.
It is worth mentioning the lack of unified rules of the game for business, bureaucracy and corruption, cause delays in business processes. As a result, the investor is less competitive than the local entrepreneur, who is more flexible on the market. As well, the situation is not hopeless. Numerous governmental and non-governmental organizations and government officials really promote investment and protect investors from any negative influences.
At the national level there exists the Investment Attraction Office (UkraineInvest), which was created under the Cabinet of Ministers to help the investors; The European Business Association (EBA), which is really concerned with the business of its members, promotes their legal and political lobby, etc. Among the regional authorities one can mention the Foreign Investment Attraction Office of Lviv State Regional Administration, which is open to any foreign investor and provides assistance and protection; Lviv IT cluster (branch association) and many other business associations (in which participants can see both shareholders, and representatives of medium or small businesses) that can effectively influence the resolution of investors’ crisis issues.
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