Business in Ukraine

[Travis]

I'm considering opening an office in Ukraine, Kiev specifically I think. Roughly 6 to 12 months from now. I really don't know what the business climate in Ukraine is at this time. Any ideas on how to start, what to look out for, who to hire, do I seperate it from the American company??? Taxes I'm sure will be a nightmare. Any cooments and suggestions will be welcome.

I figure once I start this, I will need to be there about 6 months a year to oversee it. Is that doable? A business visa? How expensive is the office space there? What can I expect to pay a month for an apartment? For office space here we pay between $1 and $1.50 per square foot...I expect it would be much less there, but I really don't know for sure.

[wsbill]

... in response to Business in Ukraine, posted by Travis on Oct 3, 2004

I thought you went there and know the rules of the road.

It's like the wide west over there, go to the corner deli and point out what you want from behind their counter where everything is at...(just like our general stores 100 years ago).

Tell ya what ya need to do.  Is get you one of those IRON-On T-shirt machines and melt historical Kiev photo/images on to T-shirts and operate a tourist trap.

I tellya when I was there I couldn't find a one.  I went down to Andresky Street and saw a bunch of shirt that looked like they'd been worn for a year and then put up for sale.  What a bad joke.

[TimInUkraine]

... in response to Business in Ukraine, posted by Travis on Oct 3, 2004

If you are opening an off-shore tech assistance center, then you will have a lot less headaches than opening up a business that sells a product to Ukrainians. Your main problem will be the telephone/internet set up. DSL is a little pricey here, and sometimes it takes a while (and a lot of palm greasing) to install extra telephone lines.

Office space in Kiev ranges between $20-30 per square meter per month (I am assuming you don't want first floor in walking distance to Independence Square).

One of the biggest problems doing business in Ukraine is employee dishonesty and the general lack of work ethic. Fortunately, your business will probably only handle cash stateside, so the most you will have to worry about is your equipment. As for hiring employees, you should make a trip here to hire your office manager before you try to start anything else. Put an ad in the Kyiv Post (in English), come to Kiev and spend a week or so interviewing for your manager. A good office manager (fluent in English with work experience) in Kiev should set you back about $250-300 a month. During this time, you should also find a good accountant, a good attorney, and an office space. Once you have these, you can start the process of hiring and setting up your business.

As far as the mafia goes--maybe they would bother you if you opened a night club, certainly if you opened a casino, but they won't even know what a technical assitance center is. Your chosen business will also not meet with many obstacles from the government.

As far as taxes go, I would set up another company (ie Ukraine Computer Assistance Co.) and award that company the contract (or subcontract) from your American company. Just enough to pay your Ukrainian expenses and a little extra that you will pay tax on. You will need to set up the company here, which means either you have to get a tax ID number or you need to have a registered representative. Your attorney and accountant will help you with these decisions and processes. Remember, however, technically, if you are in Ukraine for 180 days a year or more, your worldwide income is subject to Ukrainian taxes.

Because you are not relying on Kiev as a market, have you considered setting up your business in another city, where wages, office space, and the cost of living while you are living in Ukraine will be lower, maybe even significantly so?

[Travis]

... in response to Re: Business in Ukraine, posted by TimInUkraine on Oct 6, 2004

Thanks! I think I'm just fixated on Kiev because I'm going to need a heafty internet connection (E1). My plan is to put in a VoIP system. I'm not sure if this would be readily available in other parts of Ukraine...I'm not even sure if it would be readily available in Kiev.

Is office space really that expensive? Here in Houston were paying between $1 and $1.50 per square foot ($1.50 in the nicer areas though I think downtown is a bit more). I won't need anything too upscale, but I also won't put the office in a crime ridden location...I wouldn't want employees getting ripped off just going to work.

[TimInUkraine]

... in response to Re: Re: Business in Ukraine, posted by Travis on Oct 6, 2004

You're right about the internet connection. Maybe in Kharkov, but definitely in Kiev.

Yes, office spaces are quite expensive (the figures I gave you were averages for downtown, but not premium downtown). You can probably find less expensive office space in the suburbs.

Don't worry about your employees getting robbed...they are probably experts at avoiding this

[wsbill]

... in response to Re: Re: Business in Ukraine, posted by Travis on Oct 6, 2004

Problems with that I guarantee you.  The Gov't & Mafia will want their cut.  And you being American is icing on the cake.

[LP]

... in response to Business in Ukraine, posted by Travis on Oct 3, 2004

[This message has been edited by LP]


Uh Travis, not to rain on your parade but why exactly would you do this? What is your motivation? To make money or meet chix? Both? What kind of business? And why would anyone be considering doing business in Ukraine (it's not easy btw) when they "really don't know what the business climate in Ukraine is at this time"?

No offense Sport, I'm just curious. You haven't exactly had the best luck in the past and by your own admission some of it was due to faulty judgement on your part. Call it a little reality check.

Btw, forget Ukrainian taxes. As a US citizen you have to pay taxes on income made abroad (not that you're likely to  make a killing or anything). Means you pay twice. I'm told America is one of the few countries in the world to impose this nonsense upon their citizens.

[Oatmeal]

... in response to Re: Business in Ukraine, posted by LP on Oct 4, 2004

Actually,

The American Gov't and Ukrainian Gov't have an agreement to only tax once.  I don't know all the particulars of this and if it applies to every type of business or only some but I can assure you that this is true as my wife and I have a business in Ukraine.

[Travis]

... in response to Re: Business in Ukraine, posted by LP on Oct 4, 2004

It's business taxes that I'm interested in, not personal income. The point is to make money, not meet chicks. I don't have any lofty dreams of selling anything in Ukraine and making a killing there, all I'm interested in is the workforce potential. Don't worry Sport, you didn't rain on my "parade".

[LP]

... in response to Re: Re: Business in Ukraine, posted by Travis on Oct 5, 2004


...Go slow and do the research. Money is probably the only other thing that can warp a guy's judgement as much as women. Just didn't want to see you jumping in and maybe taking another beating. Contrary to popular belief I take no pleasure in the demise of another man

[Travis]

... in response to OK..., posted by LP on Oct 5, 2004

I have a mandate to put together an offshore technical assistance center (phone support for computer systems). No time too soon so I have time to get my ducks in a row. Most US companys are doing these sort of ventures in Mexico or India. I think Ukraine would be a better choice because I think the education system is better and I also wouldn't be competing with other American companies for assets...at least not at first. Besides, I speak Russian a lot better than Spanish :-)

Also, since I'll be running it, I'll have to live there at least part of the year; I really have no desire to live in Mexico or India but Kiev would be cool, at least on a part time basis.

[LP]

... in response to Re: OK..., posted by Travis on Oct 5, 2004

...me started on that stuff. I was amazed to learn if I call everyone from Dell to AMEX the phone rings in India. Shame on you, I don't think even the The Donald stoops that low

I even had a gal call me the other day to do a political survey and ask me how I was going to vote. Since she had an accent I asked her where she was located. India. I then asked her if she was a US citizen and she replied no. I was so pissed I cut her short without finding who she was representing. Why is a non-US citizen calling from a foreign country to ask how I'll vote? Not to mention she interupted me while I was occupied. Grrrr...

Living in Kyiv is cool as long as you learn to control yourself, unlike some other guys I've seen. It's not gonna be cheap though, at least not in the center.

[Travis]

... in response to Jeez, don't get...., posted by LP on Oct 5, 2004

Like I said, it's a mandate...not my choice. I'd keep everything state-side myself but it ain't my call.

[CS767]

... in response to Business in Ukraine, posted by Travis on Oct 3, 2004

Sounds like a lot of work and rewarding if you are sucessful---Good luck.cs

[Oatmeal]

... in response to Business in Ukraine, posted by Travis on Oct 3, 2004

Well,  

It really sounds to me that you have an idea to start a business in Ukraine.

HOWEVER, From your query here I should say that if you are asking these types of questions here you are not ready to even begin to start business in Ukraine.  I think you really need to try to find a solid contact in Ukraine.  If you don't have enough personal experience with the ins and outs of doing business in Ukraine then you are just asking to be taken advantage of.  

I don't mean to quash your dream but doing business there can be risky.  If you have any questions about this then you should do research on what happened to the Polish company who built the underground mall on Khershatik.

My first pointer would be to contact the local Mafia/Government official and ask them what will financially be required from you to do business there.

However, if you let them know that you are an American starting this business then I believe that they will certainly be predisposed to ask you for a very high fee for operating business there.

Please do a lot of intense research before you invest any cash and also you must make absolutely sure to cover your rear end 100% if that is at all possible.