31 May 2010

Ukraine - Euro 2012 - Proposed Tax Incentives

Profits of 3,4 and 5-star hotels are exempt from corporate profits tax for a period of 10 years startingfrom January 1st 2011. This exemption applies to all hotels (including new and reconstructed ones)that will open before September 1st 2012 (draft law #6309)

This is good news.
Well Ukraine is always full of suprises. If this law is introduced it's one great incentive to hotel oweners/developers and operators in Ukraine.
A big boost for Euro 2012

Kyiv Day & Amway

An interesting weekend in Kyiv city centre. Celebrating Kyiv Day was spread across both days where the city was invaded on Saturday,firstly by cyclists. I swear I have never seen so many cyclists in one place. Secondly followed by motorcycles. Some of the very best bikes I have seen. It gave riders and passangers a great opportunity to show off at the weekend riding their bikes down the main street of the city. How on earth can people get the impression that Ukraine is a very poor country?

Sunday.The street is full of thousands of walkers and runners, but this year with a noticable difference. All wearing T-shirts provided by the sponsor AMWAY. Moreover, many groups of walkers were 'chanting' the words Amway...Amway...Amway. Which indicates that many of these volunteers were probably Amway Distributors.
I just wonder if Ukrainian people understand what AMWAY stands for and how funny it sounded to foreign people hearing the Amway..Amway chant?

AMWAY......(The Amercian Way) is well known to AMWAY people and in some parts of the world Amway is more of a religion than just a business opportunity.
But lets face it. I take my hat off to those Amway people, who have proved it can be a success in Ukraine also. Well done.

28 May 2010

Sometimes its like pushing water up hill......

It's not all good news. When I hear that companies like IKEA and HP and Cargills are pulling out of investments in Ukraine its like taking backward steps.

See the article in the Kyiv Post: http://www.kyivpost.com/news/business/bus_general/detail/67908/

IKEA has been here long enough to be no stranger to the unpredictable environment. Having opened an office in 2005, the retailer obtained a land plot on the Black Sea coast in Odesa. With the potential for some 25 outlets across the country, the company planned to debut in 2011. But not anymore, said Ukraine’s country manager Frida Malmquist.

“IKEA has decided to postpone its plans for establishing shopping centers in Ukraine. IKEA will follow the development in the country, and at some point re-evaluate its decision,” she said.

Leaving the Odesa plot empty for now, IKEA Group also sold three plants in western Ukraine at the end of April. They used to manufacture IKEA’s famous furniture for Russian markets. Danish lumber company DDS bought wood-processing firm Sten in Ivano-Frankivsk region. Romania’s Plimat took over Proza furniture factory and Karpaty wood-processing plant from Swedwood, IKEA’s daughter company.

“Ukraine has suffered more than any other western and eastern European countries in terms of main economic indicators,” said Klimenko. “It means that Ukrainian incomes tumbled further than others, so IKEA’s target group has diminished significantly. Klimenko predicted, however, that IKEA would return in the next three or four years.

27 May 2010

Doing Business in Ukraine - BBCU Meeting 26 May

Last night we held another successful BBCU networking meeting at the Opera Hotel in Kyiv. My thanks to Benoit Kuborn the Hotel Manager for providing an outstanding service for our meeting. Our speakers included Clive Hunter-Dunne from Energy Capital, Peter Burningham from Clarus Europe, Vasiliy Artazey from Ukrmoto Group and Irina Neduzha from Intercomp Global Services.

The good news is that the majority of people at the meeting shared our positive enthusiasm about doing business in Ukraine for 2010 and beyond.
We still have too much corruption in government, to much red tape and too many rules and regulations, but one thing for sure is that there is never a dull moment in Ukraine. Opportunities need to be taken when they arise.

Its very interesting that the Opera Hotel is enjoying a near 90 percent occupancy rate these days. Not bad when you consider its a 5 star and one of the most expensive hotels in Ukraine (maybe in Europe.The service provided by the hotel staff is just outstanding and a great example to others in Kyiv. I think we will have many more meetings there.

25 May 2010

Closer co-operation with the EU

Ukraine’s parliament is to adopt a legislation package for closer cooperation with EU
In June the Ukraine parliament is to pass a legislation package necessary for launching a free trade zone with the European Union and start visas liberalisation process, President Yanukovych told Ukraine’s leading TV channels.


“We have a cooperation plan with the European Union for 2010 and we are fulfilling it. First of all we are working towards liberalization of visa procedures which would result in visa-free zone between Ukraine and Europe. Secondly, we are aimed at free trade zone with Europe. In June the parliament is going to pass a legislation package that would give us a green light for more substantial negotiations with the European Union” – Yanukovych said.

This will be interesting. If it works, it will be a great result for Ukraine.
Moreover, it could open the door for more EU based companies to enter and serve Ukraine markets. I just hope the government will not create too many barriers.
If the visa situation is agreed it will be a very big step. Lets think positive.

22 May 2010

Investing in Ukraine

It’s been a busy week for people talking about the future of Ukraine.
On the political front we had the Russian President visiting Kyiv on the first official state visit for a long time. Many people fear that the Russians want too much influence in Ukraine. We will see. Moreover, a certain video clip on YOUTUBE attracted a lot of attention showing the President of Ukraine being hit on the head by a wreath. Its funny, but I think it will only do him good as people begin to empathise with him.

Regarding business, the annual Ukraine Investment Summit took place in London at the start of the week. Feedback indicates that investors are still ‘considering’ Ukraine as a potential investment location but as ever the legal environment in Ukraine still creates problems for potential investors. Corruption is still a problem and let’s face it will continue to be. For those who intend to wait for large scale changes to take place in the business environment in Ukraine, they will be a waiting a long time.

It’s sad that many investors are put off by the lack of transparency, lack of legal protection and overall lack of confidence in the safety factors when considering a major investment in Ukraine. I’ve only been here seven years and recently I was talking to friends who have been here 15 years plus and they are STILL waiting for corruption to stop. But they still carry on with business as best they can. I still remember one Ukrainian friend telling me “Why should we make it easy for foreign investors, this is our country”.
Maybe he has a point. Ukraine is not in the EU so does not have to conform to too many rules and regulations. However steps are afoot to draw up a Free Trade Agreement between Ukraine and the EU, which I’m sure will contain many demands from the EU regarding level playing field activity.

The banking and property markets are still flat here but there are signs that the retail sector is picking up. Ukrainians do like spending money, so they need to find an outlet.
As said many times before this year can only be better than last year. But so far things appear to be picking up slowly, which may also be a good thing. The boom years are certainly over and behind us. My main concern is that we do not start to witness to much economy activity which turns out to be just ‘smoke and mirrors at work’.

16 May 2010

Golf in Ukraine

10.00am this morning in Kyiv it was raining hard. So many people called or sent me an sms to say "Sorry, cannot play golf today". BUT, a few of us would not be put off by a drop of rain, so we drove out to Royal Kyiv Golf Club (40km from Kyiv).
For the first three holes it was like, 'Why are we doing this?" its belting down with rain and we are playing golf. But the rain stopped and we went on to the end.
Fresh air,driven rain,sunshine what more do you need on a Sunday? Bad play from yourstruly also does not help, but things can only get better as more and more people discover the game of golf in Ukraine. Problem is the aches and pains will be difficult in the morning. But, GOLF...what a great game.

15 May 2010

The BEST Dentists are in Ukraine

I visited a dentist twice this week in Kyiv. Going to a dentist here is actually a pleasurable experience. Since I have lived here, I have had really good dental treatment.
Dentists and hygienists work together here like a true team.
I heve never had a bad experience with a dentist in Ukraine. Moreover, the prices are very low compared to the rest of Europe. In Kyiv we have some very good Dental Clinics and I would go as far to say that the Dentists are BETTER than ones you will find in the UK. If anyone is looking for good dental treatment at an affordable price, please contact me and I would be happy to put you in contact with the best Dentists in Kyiv.

Europe Day in Kyiv - Sat 15 May 2010

Today it is Europe Day in Kyiv city centre. This gives Ukrainains an opportunity to learn more about the EU and EU-Ukraine relations.
I still think that membership of the EU for Ukraine is a very long shot.
'Tents' are erected along the main street eahc representing a member country within the EU. Let seee what's interesting this year. From previous year The Irish usually attract a large crowd, probably due to the facty that they usually ask people to sample FREE Guinness. The Greeks also usually have a good display, but maybe it will not be the same this year. Lets hope its a great day anyhow.

12 May 2010

Conservatives return to Government in the UK

After a very interesting day in British politics, the Conservatives have returned to power in the United Kingdom, although in a coalition with the Liberal Democratics.

This can only be good for the British economy and very good for British companies around the world.

13 years of socialism are now over. Perhaps we can start to put the GREAT back into BRITAIN once more. The Labour party will be back where they feel most comfortable, in opposition.

Lets hope we can start to see a refreshed and more confident United Kingdom emerging during the next few years. Lets hope we see a country where people feel they can actually express their fears and concerns openly and without redress by any politically correct groups under the previous direction of socialism.
Lets hope that British people can stand up and be proud once again to be BRITISH.

See: http://www.youtube.com/watch?v=fOG6jzcjoZM

11 May 2010

The death of an old friend

Received a message today from England to inform me about the death of a woman whom I have known since we were 5 years old and went to school together. She was a very important part of my childhood and early years. Although it was not unexpected, due to the advances of cancer, it still hurts when someone from your life dies at an early age. Gillian Travis was one of those people who always enjoyed a good laugh about everything and her network of old friends will always remember her as a very happy person. Sad that cancer always seems to take these kind of people early.
It made me stop work early today to go and think about the really important things in life.

Hung Parliament in the United Kingdom

Last weekend it seemed that the Conservatives would be forming a coalition government with the Liberal Democrats. But today the 'circus' goes on and the LibDems may even form a coalition with Labour. The LibDems are acting like prostitutes (I can say that because I am a non PC person.

How on earth can the Labour party remain in government in an alliance with the Lib Dems? Its an outrage and the majority of people who actually voted for the Conservative party will not be amused. This was an election where the electorate have rejected the Labour party. THE CONSERVATIVES WON THE MOST SEATS AND THEY SHOULD BE FORMING THE NEXT GOVERNMENT.

Is it any wonder I receive so many emails from Brits asking my advice about leaving the country.

10 May 2010

The REAL Ukraine

Having spent the weekend in the west of Ukraine, it reminded me of how different the rest of the country is from living in Kyiv. I suppose you could say this about most capital cities when compared to the rest of any country.
Those of us who live and work in the city centre of Kyiv lead a different life than those living in what I call the REAL Ukraine.

Kovel is a small city in western Ukraine near the border with Poland. Its one of those places where it is rare to see a foreign visitor. Indeed most visitors would not have any good reason to visit Kovel. However, a group of us stayed there last weekend to celebrate a birthday and we enjoyed a break from big city life. The ‘best’ hotel in Kovel supplied us with ‘delux rooms’ for just UAH 295 per night (that’s GBP 24.50 or USD 37).
The hotel featured a wonderful outside bar, restaurant and entertainment complex. The rooms also provided a ‘mini bar’, but not the kind of mini bar you expect to see in a western hotel. Oh no, here they give you a whole king sized refrigerator in the room. Plus the contents are not priced as per normal mini bar prices. This hotel deserves an award for common sense. The prices of the drinks and snacks in the mini bar are exactly the same as the low prices in the bar/restaurant downstairs. Low prices? Yes, I ordered four large beers on our arrival just to blow away the dust of our six hour journey. I gave the barman UAH 100 and he gave me UAH 76 change!!!. As I walked away I assumed he must have made a mistake. But he hadn’t.
That’s just UAH 6 per beer (in our language that is GBP 0.50 or USD 0.75)
Prices of other services were also very low. We had a great weekend

Victory Day - 9th May

Yesterday was the 65th anniversary of ‘Victory Day’ on 9th May 1945.
Known throughout the former soviet union as the Great Patriotic War, the day marks the signing of the surrender document from Germany. Victory Day is a national public holiday in Ukraine and in most other FSU countries.
Although I ‘escaped from Kyiv’ for the weekend, I did get to see the highlights of the parade in Kyiv on TV.
One thing that still annoys me is that many people in the west of Europe including the UK, have very little idea how many people from the soviet forces died in what we know as World War 2. The soviet forces lost 25 MILLION people. Plus many westerners still regarding everything back then as ‘Russian’, when in fact Ukraine and Belarus played a major role in the war. But then again, I would say that most Ukrainians don’t really understand how we Brits were involved in the war. In the UK I think we moved on from showing all those old war films, documentaries and war stories around the late 1970’s or early 1980’s but here in the FSU, they are only just starting to really examine what happened in their Great Patriotic War. So many films are still being made to show this.

06 May 2010

Thursday 6th May 2010 - Decision Day

British citizens will go to the polls today to exercise their democratic right to decide which political party will form a government to lead the country during the next five years. I hope that we do not see a hung parliament. I hope that we see a Conservative government back in power. After the election when the dust has settled, I am sure we will hear from the LibDems about the unfairness of the British political system.. Even if the Conservatives gain (for example) 51% of the vote and Labour 29% and LibDems 20% this would demonstrate that 49% of the people did not vote for the winning side, but they would have no say in government. The first past the post system could be considered unfair. But what Britain needs right now, like most other countries also need, is strong and clear leadership in government.

Like many of my friends, I hope that we can soon put the GREAT back into Britain
I am still very proud to be British and I will always support my country, provided I and others can see common sense prevailing. We await the result with great interest.

Why are British people afraid?

Yesterday, I was accused of not being ‘politically correct’ in my opinion on freedom of speech. The accuser obviously didn’t know me well enough to understand that one of my pet hates is the business of being PC all the time. I am not a diplomat. I do not work for or get paid by any government organisation. Therefore, I believe I have the right to say what I like when I like without any fears of being ‘held to account’ by any organisation.
Moreover, I am not in the habit of saying anything wild or offensive to people. If I did the members of the BBCU would soon tell me.

Obviously, there is a line to be drawn concerning what you actually say and one must remember to not cause offence or insult to any individual or group. However, I do feel that this PC business has gone completely over the top particularly in the United Kingdom. Why do I mention this?

Well, just to show I am not getting too old, I have been using Facebook to keep in contact with old friends, some of who still live in the UK and others who now live in other parts of the world. I have recently exchanged messages and emails with many people, some of whom I have not been in contact with for over forty years or more.
Each and every one of these people expressed their concerns over the issue of ‘freedom of speech’ in the United Kingdom. Many have told me how they feel afraid to say what they really want to say. This fear is as a result of the likely or maybe certain consequences that follow for someone who says something to a colleague in a work environment or in a public place and it is considered to be ‘not correct’.

All these comments make me think…’What’s happened to British people’.
This PC ‘system’ is like something you would expect from a country in the former USSR. But those of us who live and work in former soviet countries all agree that we do not live in fear of any PC environment. In former soviet countries we have freedom to say whatever we like. Who would have thought this? (Admittedly the freedom of the press/media in many former soviet countries is another issue).

The Australians have been demonstrating recently how they will ‘say what they like’ when discussing the thorny subject of immigration. Many in the Australian government have voiced openly how they intend to protect Australian culture and if immigrants coming to Australia do not like it…then don’t come to Australia is what they are told.
This is refreshing. Why can’t British people do the same?

01 May 2010

British Embassy Meeting 29 April 2010

The UK Foreign and Commonwealth Office operate a system called LOCATE.
This is a database which allows British citizens around the world to register and tell the the FCO where they are. This applies if you are a short term visitor to a country or even a long term expat etc. So, during the past months the British Embassy in Ukraine has been trying to find British citizens to register on the LOCATE system.
We at the BBCU also did our bit to help and sent messages to our members and contacts to persuade them to register. Some long term expats in Ukraine,did indeed register but some still view government databases as not a safe place to put their details.

Anyhow, the reward from the British Embassy in Ukraine for registering on LOCATE was an invitation to a reception hosted by the British Ambassador - Mr Leigh Turner at the wonderful Ambassadors House in Kyiv.

I estimate that about 60 people turned out. I was happy to attend as I actually saw many new faces. It made me realise that there is a life outside the world of business. All the meetings I attend are always business related, as there is a bunch of British expats that meet each other at some event on a regular basis. But this was different as many of the British citizens were people from the teaching profession, writers, support organisations (NGO's etc)and there were many 'non business' people. I met Mr Richard Shirt who has spent the past two years writing a book, just published entitled "Among The Ukrainians". I always envy but also admire those who can take time off to write a book. It's like a dream for many of us, as we know that we will probably never get around to actually doing it. See details about Richards book here: http://amongtheukrainians.co.uk

I observed one man standing on his own and I suspected he was not British. Due to the fact that he was very well dressed. Many Brits still do not know how to wear clothes and many still do not have any care about how they look.
So, I introduced myself and discovered him to be Mr Dmitry Ermolenko, not a typical British name. Dmitry has British citizenship but stays and conducts his business in Ukraine and Russia. Turns out he runs his own retail fashion company and has the licenses for over eleven well known international clothing brands for Ukraine, Russia and Kasakhstan.One smart guy.

Also had a conversation with a man from the Embassy Visa Section. Not an easy job working in an environment where he gets to decide who gets a visa and who doesn't. Well that was my introduction to him, but he sees thing in a different way in a world of systems, points, audits, getting the documents in the correct order etc.
He explained the process of always making sure he made a decision based on the knowledge that he may have to answer to an auditor at a later date. Although a nice man, after a few minutes of conversation I realised he and I live in different worlds. He also made me realise why I am a British EXPAT.

BBCU Meeting 28 April 2010

The feedback from our meeting this week has been very good.
Our networking meeting - Banking, getting back to business was a great opportunity to hear from people about what is happening in the banking sector in Ukraine.
Unfortunately, these days most bankers are not so eager to be speakers at events as they are tended to be regarded as prime suspects/public enemy number one, for many ills in society.
This was our first meeting at the new Intercontinental Hotel in Kyiv and the panorama view provided on the top floor is probably the best view you can get of Kyiv. Our new 'style' of meeting was also introduced, where people remain standing for the short speeches provided by members and guests. The new format allowed people to get talking and meet more new contacts than before.
However, I will have to drop a note to the management of the hotel as is usual in Ukraine, the staff in hotels still forget to understand how important the customer really is. We may continue to have more meetings at this hotel, if we can get things better.