The EBRD has launched a quarterly newsletter for Ukraine’s small businesses, tracking regulatory changes introduced since Russia’s invasion in February 2022.
The first issue covers major business-related regulatory changes, such as currency controls, tax breaks and rate changes, adjustments to the labour code, including provisions for the relocation of businesses and employees, and corporate legislation.
The legal and regulatory updates for micro, small and medium-sized enterprises (MSMEs) in Ukraine are prepared by the EBRD’s Legal Transition Team in partnership with Arzinger, one of the leading law firms focusing on Ukraine, in a continuation of an earlier small and medium-sized enterprises (SME)-focused project, Business Guide. The newsletter is available here.
Catherine Bridge Zoller, Senior Counsel, Legal Transition Team at the EBRD, and project leader said: “With the Business Guide website initiative and newsletters, we hope to support the efforts of Diia.Business and help Ukrainian businesses navigate what is a fast-changing and challenging legal landscape.”
Kateryna Rigg, Principal Manager, SME Advisory at the EBRD, Ukraine, said: “This initiative is a response to the needs expressed by our business clients. SMEs lack a dedicated source of timely and accessible information on the key legal and regulatory changes related to their activity during the war. Thanks to the EBRD Shareholder Special Fund, and our partners at Arzinger, the new quarterly newsletter will fill this gap.”
According to preliminary data from an upcoming report on Ukrainian SMEs, commissioned by the EBRD, an estimated 30-50 per cent of businesses have stopped or suspended their operations. While micro-companies in the services sector have been less affected, at larger industrial SMEs, up to half of all employees may have lost their jobs and income.
However, early research results also indicate some room for optimism. The majority of surviving businesses have been gradually resuming their activities in the second half of the year. Some are beginning to enter new contracts, others are rebuilding supply chains. These positive signs are very fragile and their realisation will depend on safety levels, the overall level of business activity in the country and stable demand. Many SMEs still need to relocate to safer operating environments – mostly within, but sometimes outside, Ukraine. They also need to access new markets; and adapt their business activity and human resources to the new reality.
In addition to regulatory updates, the new EBRD newsletter provides information on Business Ombudsman Council support for Ukrainian SMEs during the war, including a dedicated helpline, support with relocation within and outside Ukraine, and information and assistance on taxation and customs issues. The office of the Business Ombudsman in Ukraine is an EBRD initiative, launched in 2014 and actively working today.
The EBRD legal support initiative for SMEs was launched in 2021 with the Business Guide for Georgia, Moldova and Ukraine following the Covid-19 pandemic with funding from the UK government.
To date, the EBRD has invested €18.3 billion in Ukraine. In partnership with donors, it has committed €900 million of funding to projects across the country since the Russian invasion in February 2022. The EBRD has undertaken to commit €3 billion of financing to Ukraine in 2022-23 in equal partnership with international donors.