“We are looking to hire,” declared Naadem Saadeh, president and founder of Tech Trend, a French company that specialises in electrical engineering and installations and has been operating in Ukraine since 2016. Saadeh was one of the panellists during a session on the reality of running a business during the Rapid Recovery of Ukraine forum, organised by the Luxembourg-Ukraine Chamber of Commerce in Kirchberg on 21 May 2024.

Working in Ukraine during the war is, of course, is very challenging on the human side. The company lost one of its employees a year and a half ago, added Saadeh, and providing moral support, as well as a secure working environment and giving colleagues a “future perspective” is important. “Even if the war will be long, we will continue working and will have more and more projects.”

So how did this French firm end up in Ukraine in the first place?

Founded in Paris in 1993, Tech Trend works with large-scale international projects. While visiting an expat friend in Ukraine, Saadeh said he visited a Globus shopping centre, where he “immediately noticed,” of all things, the engineering work in the ceiling. “I looked, I looked, I looked, more and more and more, and so the idea came to me: why not Ukraine?”

From six horses to a Ferrari

An HR company introduced several engineers to Saadeh, and “honestly, I was impressed.” He took the decision to set up an engineering hub in Ukraine, and the first office opened in Dnipro with six engineers. “In 2016, we had six horses. In 2019, we had a Ferrari. Our activity became bigger and bigger.” The people are highly skilled--especially in technical fields--and they’re flexible, motivated and ready to learn.

“Everything is easy in Ukraine,” Saadeh added. “If you need a teacher in your office, you have a teacher in your office Monday,” he said, offering the example of getting a language coach. “If you need an IT guy, or [to respond to] anything that can happen by surprise, it’s very easy. Two phone calls!” The payroll system, for instance, is much simpler than in France. “A lot of things are now computerised,” making it easy to pay salaries or do taxes. “Even between 2016 and now, the difference is huge.”

War risk insurance

Bertrand Barrier, a lawyer and president of the governing board of the French-Ukrainian Chamber of Commerce and Industry, was another of the panellists. He noted that France is one of the largest investors in Ukraine and is the largest foreign employer, with companies present in a range of sectors, from banking to agriculture. The last few years have been difficult, but the French companies have remained. “That’s important, in the sense to say that business continues.”

The French export credit agency Bpifrance Assurance Export, in addition, in October 2023 said that it would investing in Ukraine’s reconstruction. The insurance would cover up to 95% of the loss of investor assets or receivables. It’s a “very strong commitment” from the French government to encourage companies to invest in Ukraine, said Barrier.

Need to activate the private sector

There’s a massive need for investment. To encourage this, “we’re working with Ukraine to improve” the business climate, ensure predictability and a level playing field, said Alberto Fernandez-Diez, head of the trade and economic section of the EU delegation to Ukraine. When the full-scale war started in February 2022, the national bank of Ukraine restricted foreign currency outflows, which is something that caused issues for foreign companies, who were unable to repatriate dividends. But these currency controls were eased, he noted, starting in May 2024.

Ukraine has a deficit of around $40bn, Fernandez-Diez added, though budget support from the EU, US and International Monetary Fund are expected. “This is helping Ukraine for the time-being, but they need to have fiscal income. And fiscal income comes mostly from economic activity.” The private sector needs to be mobilised to generate this fiscal income.

Ukraine is a country rich with raw materials, and is involved in the , which aims to boost sustainable critical minerals projects and promote ESG standards in supply chains. That’s one potential avenue of investment.

But the green transition is another key priority. “Ukraine is a massive producer of steel,” said Fernandez-Diez, and the green production of steel will be important in the near future. The agricultural sector is a “massive powerhouse,” and the country also has a lot of talent in the digital sector. “All these areas are what we’re looking at,” he said. “You can see the big picture of what make a nice investment plan for Ukraine that would lock in investors from the EU to invest and drive the potential of Ukraine’s massive export capacity.”

For Fernandez-Diez, three main reasons to invest in Ukraine are: access to the EU internal market; the competitiveness of the country and its raw materials; and the need for climate action. Ukraine has traditionally been an industrial country and it will need investment to transition towards greener modes of production.

Opportunities are indeed in the energy sector, said Alina Konovalchenko, COO of the UN Global Compact in Ukraine, a voluntary initiative that aims to get businesses to adopt sustainability principles. “It’s very important to prove that our private sector really knows how to work transparently with investors, even in the most challenging times,” she added. “We have examples of international businesses investing in Ukraine; we have examples of local businesses that attract international investments; and we also have very good cases of local companies that go international, even after the full-scale invasion.” An example is Nova Poshta, a Ukrainian postal and courier company.

Over 2,600 new companies

Andrii Sysoiev, a board member at CFO Club Ukraine, shared some advice for people interested in doing business in Ukraine. “First of all: have good lawyers,” he said. His second piece of advice was to hire Ukrainian professionals (it’s cheaper); the third was to join a business club to have opportunities to exchange with people when you encounter issues. The country is split into different zones by risk, he added, according to their distance from the frontline.

There have been 2,652 companies set up by foreigners in Ukraine since the start of Russia’s full-scale invasion, said Sysoiev, referring to figures from the open data platform Opendatabot. The largest share from a single country (13.1%) came from Turkey, followed by Uzbekistan (10.1%), Poland (7.1%), US (6.6%), Kazakhstan (5.6%), Germany (4.5%), Azerbaijan (4.5%), Israel (4.2%) and the United Kingdom (3.5%); other countries made up the remaining 40.7%.

Ukrainian GDP dropped nearly 30% from $200bn in 2021 to $161bn in 2022, before growing by 5.3% in 2023 to roughly $169bn in 2023. It’s projected to grow by 3% in 2024, according to a in mid-May.

In conclusion: companies are being established; the economy is growing; and there are opportunities to be seized.