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flag Ukraine Ukraine: Selling and Buying

In this page: Market Access Procedures | Reaching the Consumers | Distributing a Product | Organizing Goods Transport | Identifying a Supplier

 

Market Access Procedures

International Conventions
Member of World Trade Organisation
Party to the Kyoto Protocol
Party to the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora
Party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
Party to the Montreal Protocol on Substances That Deplete the Ozone Layer
Party to the Wassenaar Arrangement on Export Controls For Conventional Arms and Dual-Use Goods and Technologies
Main International Economic Cooperation
Ukraine is member of WTO since 2008.
Non Tariff Barriers
Non-tariff barriers include non-transparent standards, costly certification and cumbersome procedures for phytosanitary certification, and import licenses. The other important barrier to trade and investment in Ukraine is the country's difficulty in transiting from a planned economy to a market economy. Following economic reforms, the country experienced a relative success concerning export and investment. In the beginning of January 2011, the Government of Ukraine signed Order #971, approving a list of food products that require monitoring for genetically engineered or genetically modified organism (GMO) content.

There are real structural barriers putting a brake on trade and investment in Ukraine : corruption, lack of protection in terms of intellectual or industrial property, lack of foreign exchange, an ill defined or too bureaucratic hierarchy, an inefficient and little developed banking system, law, license and tariff changes... Investment is precisely curbed by the absence of private property and a coherent privatization program, non convertibility of the country's currency and lack of financial liquidity, change of legislation relating to investment, lack of quality, lack of competitive prices for hiring or purchasing representative offices, poor infrastructures, political instability...

Customs Duties and Taxes on Imports
Average customs duties are between 10 and 15%.


Customs Classification
Ukrainian customs follow the recommendations of the WTO and apply the Harmonized System.
Import Procedures
The import duties to be paid by a foreign importer in Ukraine vary according to the type of product: alcohol, tobacco, motor cars, tires, jewelry and other luxury products. The payment of these duties must be effected in the country's currency. Excise duties are also paid in the local currency and are calculated as follows: for non luxury products, a percentage is applied and for luxury products the excise duty is not calculated on the customs declared value but according to volume, number of units or weight of the import.
 
Three procedures exist for import: customs control, customs formalities and the payment of taxes where applicable. Several documents are necessary, on the basis of imported goods: customs declaration, declaration of value of goods, business and transportation documents, test certificates, origin, compliance. These documents must be submitted within 10 days after the arrival of the products at their destination. For more information, consult Investukraine.
Importing Samples
The customs' regime regarding samples is strict and only allows this kind of importation on condition that the sample will be re-exported in its entirety to the country of origin or will be destroyed by customs.
 
 
For Further Information
KMU
Ministry of Economy of Ukraine
Ministry of Finance of Ukraine

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Reaching the Consumers

Marketing Opportunities

Consumer Behavior
The price factor has most value for Ukrainian consumers. In addition, they are greatly attracted by western products, which are of higher quality than national products, and are often difficult to obtain in the hinterland. The quality of after-sales service is a criterion which can set a foreign company apart, for in Ukraine shops very rarely exchange defective goods, and for this reason consumers have a very poor image of this aspect of sales in the country.
Locally-produced promotional advertising is an effective method to inform Ukrainians about new products. Moreoover, including the name of a Ukrainian or Russian distributor and local address on original packaging increases consumer confidence.
Consumer Profile and Purchasing Power
A household's average income is estimated at 4EUR 50, and 90% of the average Ukrainian's budget is devoted to primary expenses (food and housing). The middle class, in the western sense of the term, represents about 9% of the population, and its number is growing at the same time as the country's economy; it is strongly attracted by western products. A large proportion of the popular classes also identifies with the middle class, since a third of the population feels it belongs to this group. Most Ukrainian consumers belong to the 35-49 age bracket, and to the 10-20 one. This latter category stands out for its greater consumption of western products, while the former contribute most to the real estate and ready-to-wear markets.
Consumers Associations
Ukrainian consumer association
Main Advertising Agencies
Leo Burnett Ukraine
Saatchi & Saatchi Ukraine
Havas Worldwide Ukraine (in Ukrainian)
Sahar
Inart

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Distributing a Product

Evolution of the Sector
The distribution and warehousing resources in Ukraine are weak. With slightly more than 10% of Ukraine's population living in the three largest cities, establishing a reliable distribution and warehousing network is of great importance. However, Ukraine’s commercial infrastructure has matured in recent years.

Few structures carry out distribution and the follow-up of imports. The distribution sector remains very traditional and fragmented, but the arrival of foreign competitors could widen the range of products and services, contribute to stabilizing prices and stimulate competition. Franchises are growing, but there is a legal vacuum as far as intellectual property is concerned, and barriers to the development of small companies.

The most developed distribution circuit is retail trade. Food shops can either be non-specialized or specialized in a single range of products. There are also department stores especially in Kiev such as the Department Store Ukraine, the Zum which is the equivalent of Printemps in Paris (Selfridge's in London), the department toy store, Dytiachy Syit - Children's World, the large jeweler's Koschtan, and for perfume and cosmetics, Lancôme.

The market share of non-organized retail is increasingly encroached upon. Retail superstore chains are appearing in major cities and primarily specialize in food and consumer electronics.

Market Shares
Non-organized retail shops have 43% of the market, local shops control 25%, while supermarkets have approximately 12% market share.
Organizations in the Retail Sector
Association of Ukrainian Distributors

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Organizing Goods Transport

Ports
The port of Odessa
WPS - Index of ports in Ukraine
The port of Illitchevsk
The port of Nikolaev
The port of Yuzhny (website in Russian)
Location of the main ports in Ukraine
Airports
Boryspil international airport, Kiev
Donetsk international airport
Dniepropetrovsk international airport
Lviv international airport (only in Ukranian)
Odessa international airport
Sea Transport Organizations
Ministry of Infrastructure of Ukraine
Air Transport Organizations
National Civil Aviation Administration (website in Ukrainian)
Road Transport Organizations
National Road Department
Rail Transport Organizations
National Railway Administration

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Identifying a Supplier

Type of Production
The last few years, Ukrainian industry benefited from to the rise in production of automobiles (+60%), machines for the mining industry (+34%), and wagons for rail transport (+31%).

Metallurgy and metal processing represent 20% of the country's GDP. Mechanical construction represents 13% of Ukraine's GDP. The agrifood sector represents 17% of Ukraine's GDP (the country has a very strong agricultural potential with lands which are among the most fertile in the world). The chemical and petrochemical industry represents 6.7% of the country's GDP. Ukraine is a big exporter especially of fertilizer.

Business Directories

Multi-sector Directories
Ukrainian Exporters Database - Search guide provided by the website State Export Support from the Ukrainian Ministry of Economic Development and Trade.
All.biz - Ukraine - Directory of companies in Ukraine.
American Chamber of Commerce in Ukraine - Association representing the interests of present and potential US investors in Ukraine.
Bizukraine.com - Ukrainian importers & suppliers.
Business UA - Database of Ukrainian companies.
Trade Board Ukraine - Ukraine's online business directory.
Ukraine Today - Catalogue of leading enterprises in Ukraine.
Ukraine Yellow pages - Find a business in Ukraine.
 
 
Manufacturers Associations of the Main Industries
8 professional associations listed for Ukraine.
 
Trade Agencies and Their Representations Abroad
Ukrainian Chamber of Commerce and Industry
Enterprises Federation
Catalogue of leading enterprises in the Ukraine
 
 

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Last Updates: February 2015