Ukrainian business in the conditions of war and why businessmen are forced to open companies abroad

Ukraine, like many other countries, is influenced by domestic and foreign political factors. The most significant factor today is war. It led to the introduction of a number of restrictions that have a significant impact on the business environment in Ukraine. Read the new article from the Antwort Law team about which restrictions lead to the fact that Ukrainian businesses have to open a company abroad.

The introduction of a number of restrictions in connection with military events has an impact on the business environment in Ukraine. These restrictions can hinder business development in the domestic market.

For example, on the first day of the military conflict, the National Bank of Ukraine adopted Resolution No. 18 dated February 24, 2022 "On the operation of the banking system during martial law", which established the following set of restrictions:

• the official rate as of February 24, 2022 is recorded;
• cash withdrawals are limited;
• issuance of funds in foreign currency is prohibited;
• the operation of the foreign exchange market was stopped, except for the sale of foreign currency;
• prohibited cross-border currency transfers;
• replenishment of electronic wallets with electronic money and distribution of electronic money are suspended.

For the first time during the years of existence of the market economy in independent Ukraine, the business faced currency restrictions of such a scale. In fact, all currency transactions and money transfers abroad have been stopped.

In this regard, for many Ukrainian enterprises, opening a company abroad has become the only option that would preserve the business's ability to operate. Antwort Law has a team of specialists who can help in this matter. What are the advantages of opening a business abroad? We suggest you familiarize yourself with the following list:

• Ability to work freely with foreign currencies and suppliers: in many countries, there are no restrictions on making payments in any currencies or opening accounts in foreign banks.
• Economic advantages: opening a business abroad opens up new opportunities for attracting investments and expanding sales markets. Countries with more favorable economic conditions can become attractive for business location.
• Access to new markets and customers: Opening a business abroad allows businesses to gain access to new markets and customers, which helps to expand the audience and increase sales.
• Increased sales and revenue: Opening a business abroad can lead to increased sales and revenue through access to new markets and customers.
• Tax benefits: Some countries offer favorable tax conditions for foreign investors, which can reduce the financial burden on businesses and provide additional financial benefits.
• Financial opportunities: developing a business abroad opens up new financial opportunities, such as access to foreign investment and financing.
• Logistics processes: Placing a business in strategic locations abroad can improve logistics processes and reduce transportation costs.
• Investment opportunities: starting a business abroad opens up a wide range of investment opportunities that can be particularly attractive in the context of today's domestic market constraints.

Opening a business abroad can be an important step for Ukrainian companies looking for new opportunities for development and growth. The general assessment of profitability and opportunities for Ukrainian business consists in the analysis of specific conditions and markets of each individual country, as well as in the study and development of risk management strategies. Business development abroad requires a comprehensive approach and systematic analysis, but with proper planning, it can be an important step for achieving success in the conditions of modern restrictions on the domestic market of Ukraine.

Therefore, opening a company abroad can be an important step for achieving success in the conditions of modern restrictions on the domestic market of Ukraine. Antwort Law is ready to provide comprehensive support in this process!

Namely - "Where is better to open a business in Europe, Asia or the USA and advice on this" you can read in the next article from our team.

Olena Deilid

Junior Legal Secretary