After three and a half years in Luxembourg working as a consultant to the European Investment Bank, Ukrainian lawyer Evgenia Paliy realised there was plenty of interest in opportunities for investment in her native country.
But there was no formal set up to provide those potential investors with the right information or advice. The lack of an embassy, trade office or country specific chamber of commerce in Luxembourg prompted Paliy and her fellow board members--Arnaud Lumet and Maria Dobrostamat--to set up the Ukraine-Luxembourg Business Club.
A Ukrainian association already existed to help out expats and promote cultural and social events. There are around 1,000 Ukrainians in the grand duchy, says Paliy. “But there are many more people here who used to live in Ukraine who also wanted information about the challenges and opportunities between the two countries.”
The Ukrainian embassy in Brussels soon got on board to offer support, as did the Luxembourg Chamber of Commerce. “We are starting step-by-step and we have plenty of ideas and ambition.”
The club launched a survey to find out what its potential members wanted, and to judge market reaction. “There are plenty of different sectors that are ripe for investment. The IT sector is very rich. [Ukraine] is the European India, so to say, and it’s just 2,000 kilometres from here.”
Known for its fertile soil, Paliy says that Ukraine is also attracting a host of international agricultural companies who are eagerly waiting for a change in the law that will allow them to purchase farmland.
Paliy also reveals that the EIB is providing guarantees to Ukrainian banks which are providing loans to small and medium size businesses in the country. “This is wonderful, and not many people know about this.”
In addition, adult literacy is one of the highest in the world at 99.8% (in 2015) and labour costs are very cheap. “So, possibilities for outsourcing are super great, not just in IT but also in human resources.”
On the other hand, the high level of education and a strong showing in English-language skills mean that a sort of brain drain has been occurring. “Lots of foreign companies just cherry-pick the best students from Ukraine universities,” Paliy explains. The current political climate has not helped retain talent in the country.
The club is now planning a busy programme for 2018, which will include policy networking and educational events. Using their local contacts, the club will host speakers who will address the impact of the new Payment Services Directive, PSD2, for example, which comes into effect in January 2018, and the double taxation treaty between the two countries that became effective in 2017.
On the board
Evgenia Paliy is joined on the ULBC management board by Arnaud Lumet and Maria Dobrostamat. Lumet is a financial controller with over ten years’ experience in six countries in business development. He was a co-founder of the Ukraine Music Export Office. Dobrostamat is a consultant who has worked in both the public and private sectors and has a diverse background in strategy development, improving business delivery and also in fundraising and reporting.