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Ukraine is situated on the Black Sea, between Poland, Moldova and Romania in the west and Russia in the east. Its location is one of strategic importance as it lies at the crossroads of Europe and Asia.

According to the CIA Factbook, Ukraine covers a total area of 603,550 square kilometres and is the 45th largest country in the world. Estimates in 2010 put the population at 45,415,596 with 78% Ukrainian, 17% Russian and the remainder Moldovan, Belarusian, Crimean Tatar, Hungarian, Polish and Romanian. The official language of the Ukraine is Ukrainian, although Russian is also widely spoken.

The country has a population density of 77/km2 ranking it 115th versus other countries across the globe.

Ukraine gained independence from the Soviet Union in 1991 and a new constitution was adopted in 1996. As a unitary state, it has 24 provinces known as oblasts, the autonomous republic of Crimea, and two cities with special status, Kiev its capital and Sevastopol. As a republic under a semi presidential system, it operates separate judicial, executive and legislative branches. The current chief of state is President Viktor Yanukovych who was elected by national vote in February 2010.

The currency of the Ukraine is the Hryvnia (UAH) which is comprised of 100 Kopiyok.

The Ukraine participates in a number of international organisations including The United Nations, WTO and IMF.


The CIA estimated Ukraine’s GDP in 2009 at $117 billion and a GDP (PPP) $294.3 billion, ranking it 40th in comparison to the rest of the world.

Ukraine has many of the components of a major European economy with fertile land, a strong industrial base, skilled labour force and modern education system. The country enjoys rich natural resources and is one of the world’s most important mineral producers in terms of both the range and size of its reserves. Ukraine also maintains a good supply of energy sources including coal, nuclear fuel raw materials and hydroelectricity.

The country’s main industries are coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals and food processing. It also produces a wide range of transportation vehicles from cars, to aircraft and spacecraft.

Formally known as the bread basket of the Soviet Union, agriculture continues to play a large role in Ukraine’s economy with grain, sugar beets, sunflower seeds, vegetables, milk and beef all being produced.

Ukraine’s commodities are exported primarily to Russia 21.1%, Turkey 5.3% and China 3.8%.

Ukraine also imports a number of products, primarily oil, natural gas, machine equipment and chemicals with 28% coming from Russia, 8.6% Germany, China 6.1%, Kazakhstan 4.9% and Poland 4.9%.

In recent years tourism has played a key role in driving the economy forward. The World Tourism Organisation placed the Ukraine in the top 25 most visited destinations in the world, with over 20 million visitors arriving each year.


Ukraine has a well developed transportation system and is much less reliant on private automobiles than Western Europe or the United States. The country is primarily connected by a large railway network which runs over 21,655 kilometres. It also has 169,422 kilometres of roadways of which almost all is paved and 2,176 kilometres of waterways flowing along the Dnieper River.

Ukrainian Railways is a national state owned railway company of the Ukraine and its largest company. Each city has a railway station, which acts as the main transportation hub for the population, moving over 518 million passengers per year. In 2008 the railway transported around 498.5 million tonnes of domestic freight and 69.8 million tonnes of International freight. In terms of freight volumes Ukraine ranks fourth, behind only China, Russia and India.

Currently the railway system is undergoing an extensive upgrade to not only improve reliability and comfort, but also make it more competitive for transit freight.

Each Ukrainian town and city also has extensive public transport network consisting primarily of trolleybuses, trams, buses and subway systems. In addition to public transportation, taxis are readily available at lower prices than found in the rest of Europe.

Ukraine has over 425 airports across the country, 30 of which are civilian, with each regional capital having an airport on the outskirts for domestic flights. The largest airport is Boryspil International Airport situated 29 kilometres east of Kiev and serves the majority of International flights. In 2008 Boryspil operated over 96,000 flights, moving over 6,700,000 passengers.


The CIA Factbook in 2009 estimated Ukraine’s labour force at 22.15 million. 67% of the labour force work in services sector which is comprised of banking, tourism, real estate, education, transportation and communication. 18.5% work in the industrial sector which is dominated by the iron and steel industry, but also includes petroleum products, power generation, chemicals and food processing. The remaining 15.8% work in agriculture producing vegetables, grain, dairy products and beef.

The labour force is predominantly Ukrainian with 23% being made up of Russians, Belarusian, Crimean, Bulgarian, Hungarian and Polish workers.

Ukraine benefits from a skilled workforce that is a result of an established education system. The Ukrainian constitution grants free education to all of its citizens, and it is compulsory for children to complete secondary education. State schools make up the majority of secondary schools throughout the
country, although there are a small number of private accredited institutions. The government’s emphasis on education has resulted in a high literacy rate of 99.4%.

A unique feature of the higher education system is that qualifications combine both academic and professional qualifications. There are six types of Higher Education Institutions in Ukraine ranging from Universities, Academies, Institutes, Conservatories, Colleges and Technical schools.

Due to the global economic downtown in 2009, levels of unemployment in Ukraine grew to 8.8%, yet the economy is steadily recovering and unemployment is expected to reduce throughout 2010.

Business Costs

The Ukrainian tax system has been the subject of much change over recent years. Although there are frequent revisions to the tax laws, reforms have mostly been positive.

Taxation accounts for 73% of government revenues, which is collected primarily through corporate income tax, personal income tax and VAT.

Residents are taxed on worldwide income, whilst non residents are taxed only on income from Ukrainian sources. Individuals are taxed a low flat rate of 15%, whilst VAT is set at 20%.

Corporate profits are subject to a set basic rate of 25%. This is a standard rate from the clean income (i.e. gross income) for entities and private entrepreneurs. An interesting feature of the Ukrainian tax system is a simplified or unitary tax available for many small businesses. Qualifying sole proprietors opting to use the system pay a fixed amount of tax, while eligible entities pay a fixed rate of 6% based on their revenues.

In 2009 the State Statistics Commitee of Ukraine estimated that the average monthly salary at around $280 per month.

According to Cushman & Wakefield research Kiev office rental had an average cost of $37.2 per square ft per year inside the CBD.
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