MBS Blog

Is it time for investors, entrepreneurs and foreign residents to leave Ukraine? Just at the point in history where Ukraine was starting to open up and grow beyond the limited expectations of those that do not wish to see her strong and independent, along comes another idiotic decree from the government in Kyiv.

Do the “powers that be” in Ukraine believe that making it more difficult and expensive for people to work, live and do business in Ukraine is in the best interest of this nation? Is Ukraine still Soviet?

Ukraine limits labour market for foreigners

The Ukrainian government has introduced severe limitations on the accessibility to the country’s labour market for foreigners – especially as concerns foreign managers, Polskie Radio reported.

“This is a huge slap in the face for Polish investments. Without Polish managers, controlling investments in the country will become practically impossible,” stated Marian Przezdziecki, Deputy Head of the International Society of Polish Companies in the Ukraine (MSPPU).

The legislative changes, going into effect in May, are meant to increase the number of spaces on the labour market for Ukrainians, claims Ludmil Denisova, the Minister of Labour and Social Policy of Ukraine.

According to the decision made by Prime Minister Yulia Tymoszenko’s government, on May 1, the number of required documents for obtaining a work permit in Ukraine will be greatly increased. Not only will an employer need to prove the necessity of hiring a foreigner, but the employee will have to provide notarized copies of educational and professional documents as well as sworn statements proving that one holds no debts or a criminal record.

The Ukrainian daily Kommiersant-Ukraina highlights the fact that the most important changes in the regulations affect managers and directors claiming that current regulations allow foreigners to have work permits for as long as the contract requires. The changes will limit work permits to a three year period for managerial positions and one year for lower-level positions.

Violating the new regulations will incur heavy fines – current law dictates a fine of about 100 USD, but new regulations increase the number to 1500 USD.

Polish Labour Minister Denisova added that, according to new regulations, foreign workers found to violate the laws will be deported from the country at the cost of their employer.

“Whoever thought up this law does not know exactly what they are doing. No foreign company working in the Ukraine will hire anyone to high-level positions that does not have the proper experience or high-tech knowledge necessary in, for example, our firm. And finding such people [in the Ukraine] is a problem,” stated Zyslaw Krowiak, financial director of Cersanit, the Polish manufacturer of sanitary facilities that recently opened a factory in the country.

There are currently about 400 Polish companies located in the Ukraine with about 700 million USD invested in the country at the end of 2008.

From Polskie Radio

The tension between Europe and Ukraine is increasing on another front. This article at www.unian.net seems to confirm some of the rumours swirling about; Ukraine is threatening to end the visa free regime that Europeans enjoyed over the last several years.  No word on how or if this will affect citizens of the United States or the U.K.

Several years ago, Ukraine broke with the cumbersome and expensive Soviet visa scheme still practiced in Russia. This has brought a small but measurable wave of investment, new business and tourism into Ukraine.

It has certainly made it easier for entrepreneurs to work and develop new businesses here. The continuation would certainly go a long way towards increasing further investment when the global economic crisis eases, and will facilitate an even greater transfer of wealth from West to East.

Many companies in Europe will relocate their manufacturing in the next decade. A positive atmosphere as evidenced by a visa free regime, would help with this process just as a streamlined visa process did in China during the 1990s. This does not take into account the agricultural sector which will see a flood of Euro investment when laws regarding the sale and leasing of land change.

As expats who look towards the future with optimism and hope for even more business and opportunities, let’s hope that this latest threat is merely a negotiation ploy designed to get the attention of bureaucrats in Brussels.

The Ukrainian government is certainly correct about the lack of reciprocity from the EU in terms of visa issues as well as immigration. The EU continues to treat Ukraine more as a threat than as an asset and until this mentality changes within the councils of Europe, Ukraine will have to swallow some pride, be tough and creative with regards to policy, and walk the “tightrope” between the EU and Ukraine’s powerful neighbor to the East.

Ukraine considers re-introducing visas for Europeans soon - official

Kiev, Apr 04, 2009 (BBC Monitoring via COMTEX) – 

Visa-free travels between Ukraine and Europe will be cancelled soon, maybe even before 7 May, the deputy head of the presidential secretariat, representative of the president [Viktor Yushchenko] in the Supreme Council [parliament], Ihor Popov, said in an interview with the Radio Liberty on Saturday [4 April].

“We will cancel visa-free regime with Europe soon and we will benefit from this. This will happen very soon, maybe even before the summit in Prague on 7 May 2009,” Popov said.

He said that “law-enforcement agencies complain that since Europeans come to Ukraine without visas, every three months police catch some kind of a ‘paedophile’ or a ‘maniac’”.

“Entering Ukraine, a foreigner shows a passport on the border, 10 seconds and off he goes. Later it appears that the man should not have been let in. As a result, he is put on the national wanted list since he entered without a visa and is not registered in the database,” Popov said.

Popov also said that this action can “push Europeans to cancellation of visas for us”.

Source: UNIAN news agency, Kiev, in Ukrainian 1843 gmt 4 Apr 09