Why Consider Investing in Ukraine?

Ukraine’s Investment Landscape: Reforms and Opportunities

Ukraine's investment environment is evolving rapidly, driven by international support, structural reforms, and large-scale reconstruction efforts. In 2024, foreign direct investment (FDI) inflows showed signs of recovery, with over $4.2 billion recorded, despite challenges related to global economic conditions. Key developments, such as the European Union's commitment to financial assistance and Ukraine's push for economic modernisation, are reshaping the business landscape.

Recent reforms have focused on enhancing investor protections, simplifying tax policies, and strengthening financial market regulations to align with EU standards. Notably, Ukraine's progress towards European Union accession has led to the initiation of screening processes for various acquis chapters, including 'Free Movement of Goods' and 'Company Law', as of early 2025. This alignment is unlocking new funding opportunities and trade benefits, making the market more attractive for long-term investors.

Strategic sectors such as energy, technology, infrastructure, and agriculture continue to drive investment interest, particularly with government-backed incentives and international financing. For instance, the US-backed mining company TechMet has expressed intentions to develop a significant lithium project in Ukraine, potentially under the nearly finalised US-Ukraine minerals deal.

Infrastructure Investments and Economic Recovery

The reconstruction of Ukraine is one of the largest rebuilding efforts in modern history, with an estimated $486 billion required to restore key infrastructure. Recent developments, such as the €2 billion EIB-EC agreement, are aimed at rebuilding and modernising the country’s energy, transport, border infrastructure, and urban areas.

These investments will support the recovery of the energy sector by restoring thermal power plants, hydroelectric stations, and power grids, strengthening Ukraine’s energy resilience. The modernisation of transport and railway networks will improve logistics and enhance Ukraine’s integration with the European transport system. Investments in export corridors and border infrastructure will further ensure Ukrainian businesses remain competitive in global markets, with the development of "Solidarity Lanes" logistics routes and upgraded border crossings with the EU. Finally, urban and community reconstruction efforts will focus on rebuilding schools, hospitals, universities, and essential water and heating supply systems damaged by war, ensuring long-term stability and improved quality of life.

Ukraine’s Rich Natural and Energy Potential

Ukraine’s natural resources and energy sector remain highly attractive for investment. As of recent years, Ukraine has ranked among the world’s top agricultural producers and exporters, often referred to as the ‘breadbasket of Europe.’ The country is one of the world’s largest producers of grain exports, contributing nearly 10% of global wheat trade and playing a key role in maize, barley, and sunflower oil exports.

Additionally, Ukraine possesses one of Europe’s largest untapped lithium reserves, including the Shevchenko deposit in Donetsk Oblast, which is among Eastern Europe’s largest hard-rock lithium resources, estimated at around 1.2 million metric tons of lithium oxide. This makes it a critical resource for the battery industry, attracting increasing interest from international mining firms amid growing global demand for lithium-ion batteries.

The country is also actively expanding its green energy sector, with a target of generating 25% of its electricity from renewables by 2030. This commitment reflects Ukraine’s focus on energy diversification and sustainable development, positioning it as an emerging player in Europe’s clean energy transition.

What Legal Protections Exist for Foreign Investors in Ukraine?

Established in 2016, UkraineInvest serves as a one-stop shop to attract and support foreign direct investment, guiding investors through regulatory processes. Also, The Ministry of Economy of Ukraine developed the Investment Guide Ukraine, a comprehensive resource specifically designed for the Ukrainian Recovery Conference held in Berlin in June 2024, with BDO playing an active role in its creation.

The Ukrainian government has introduced tax incentives and streamlined business registration to attract foreign investors. The latest EIB-EC financing reinforces opportunities in energy, infrastructure, and transport, positioning these sectors as top investment priorities in 2025.

To navigate these opportunities effectively, investors should rely on a business consulting company and qualitative research to assess risks, maximise returns, and align their strategies with Ukraine’s evolving economic landscape.

Who Invests in Ukraine?

Major investors in Ukraine include the European Union and the United States, both playing pivotal roles in financial support and reconstruction initiatives.

As of the third quarter of 2024, Ukraine's foreign direct investment landscape was characterised by significant contributions across various sectors. Manufacturing led with 19.6% of the total investment stock, followed by wholesale and retail trade at 15.5%, financial and insurance activities at 11.8%, mining and quarrying at 10.9%, and information and communication at 8.5%. The primary sources of these investments were Cyprus (26.1%), the Netherlands (22.6%), Switzerland (6.2%), the United States (5.1%), Germany (3.7%), and Austria (3.5%).

Notably, during the first 11 months of 2024, FDI in Ukraine experienced a 14% year-on-year decline. Data from the National Bank of Ukraine indicates that reinvested profits constituted a substantial portion of FDI—75% in 2023 and 64% in November 2024.

How Stable is Ukraine's Financial Market?

Ukraine's financial market has faced significant challenges due to geopolitical tensions and the ongoing war. The National Bank of Ukraine (NBU) has implemented capital controls and exchange restrictions to maintain economic stability during martial law. These measures include general prohibitions on cross-border foreign currency payments without NBU permission, with specific exceptions for certain loan obligations and international debt issued after June 20, 2023.

However, the Organisation for Economic Cooperation and Development (OECD) has launched a four-year Country Program with Ukraine to support reform, recovery, and reconstruction efforts. This program aims to align Ukraine's regulatory framework with international standards, potentially enhancing investor confidence.

Does Ukraine Have a Stock Market?

Yes, Ukraine operates a stock market, with the PFTS Index serving as one of its primary benchmarks. However, due to the war and economic challenges, stock trading activity remains limited. As of early 2025, the PFTS Index has shown modest growth, but the market remains in a nascent stage.

The bond market, particularly government securities (OVDPs), has seen increased foreign participation, supported by favourable yields and Ukraine’s gradual easing of currency restrictions. However, investors should be aware of ongoing capital controls, which can impact the repatriation of profits. While the National Bank of Ukraine has been liberalising certain foreign exchange restrictions, full capital mobility has not yet been restored.

Which Companies Will Benefit from Rebuilding Ukraine?

With billions in international aid allocated to reconstruction, infrastructure and construction companies are set to gain the most. Additionally, engineering, logistics, and renewable energy firms will benefit as Ukraine modernises its energy grid and transport networks. Companies specialising in railway modernisation, border logistics, and urban infrastructure will see significant demand. Business consultants in Ukraine will play a crucial role in guiding investors through regulatory and market challenges.

Is Ukraine Crypto-Friendly?

Ukraine has shown a progressive stance toward cryptocurrency adoption. The government has been working on regulatory frameworks to integrate cryptocurrencies into the financial system, aiming to attract tech-savvy investors and promote innovation. Interestingly, during Russia's invasion of Ukraine in 2022, Ukraine accepted cryptocurrency donations to fund its resistance, with officials reporting that 40% of the country's military suppliers were willing to accept cryptocurrencies without converting them into euros or dollars.

However, the current legal status and regulatory environment are still developing, and investors should stay updated on the latest policies.