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The consumer

Consumer Profile
The total population of Ukraine is 43.5 million, with a growth rate of -0.5% (2022 est.). There is 0.86 male(s) per female (CIA, 2022). The ethnic groups repartition is the following: Ukrainian 77.8%, Russian 17.3%, Belorussian 0.6%, Moldovan 0.5%, Crimean Tatar 0.5%, Bulgarian 0.4%, Hungarian 0.3%, Romanian 0.3%, Polish 0.3%, Jewish 0.2%, other 1.8% (CIA, latest data available).
69.9% of the population lives in urban areas; the rate of urbanisation is -0.27%. (2020-25 est.). The densest settlements are in the eastern (Donbas) and western regions; notable concentrations in and around major urban areas of Kyiv (3 million people), Kharkiv (1.4 million), Odessa (1 million), Dnipropetrovs'k (952,000) and Donetsk (893,000) (CIA, 2022). People aged from 0 to 14 years account for 16% of the population, people aged 15 to 64 years for 67%, and people aged 65 and over represent 17% of the population (World Bank, 2021). The median age is 41.8 years (Data Reportal, 2022). The average household size is 2.58 people, 18.2% of household only count 1 person, 35.4% 2 persons, 26.6% 3 persons, and 19.8% 4 persons or more (Statistics Office, 2021).

Despite the fact that the government spends more than 5% of GDP on education — one of the highest rates of public spending on education in the world — Ukrainian schools often lack adequate facilities, modern equipment or quality textbooks, according to a report from the World Bank. Rural schools may sometimes lack indoor restrooms, to speak nothing of their outdated classrooms.
According to the same report, unofficial payments are common in education. It is not a secret that many schools collect money from parents for classroom remodelling and flowers or gifts for teachers. Some parents also pay bribes to get their children accepted to a school, for better grades, or for mandatory tutoring. These practices adversely affect students’ understanding of fair competition and the need to study. Further, the teaching profession’s low social status and even lower salaries demoralize hard-working men and women. A lack of opportunities for personal and professional growth stifle creativity, dynamism and, ultimately, motivation.
Since 2018, Ukrainian school education has been extended from 11 to 12 years. It now includes four years of elementary education, five years of middle school education, and three years of upper secondary education.

14% of the labour force works in agriculture, 25% works in industry and 61% in services (World Bank, latest data available).
Purchasing Power
The Gross Domestic Product per capita in Ukraine (PPP) stood at USD 14,219.8 in 2021 (World Bank). In January 2022, the average nominal salary in Ukraine amounted to UAH 14,577, which represented 83.5% of the previous month value (Ukraine Statistics Office). In the context of the Covid-19 crisis and the war against Russia, household real income has ended its three-year growth streak. The key underlying reasons are the deceleration in business activity, lower wages, and growth in unemployment. Consumer sentiment deteriorated sharply alongside a decline in incomes (National Bank of Ukraine). At the end of Q4 2021, consumption money expenditure of households stood at UAH 10,124.83 per month on average per household (Ukraine Statistics Office).
The Gini index was at 25.6 in 2020 (World Bank, latest data available), with an ascending trend in recent years. Ukraine ranks 81st out of 146 countries in the Global Gender Gap Report 2022, which represents a sharp drop compared with previous years. According to the United Nations, despite the existing gender equality and women’s empowerment frameworks, Ukraine still faces challenges affecting the enjoyment of equal opportunities and rights by women in general and those facing compound discrimination in particular. The root causes can be found in patriarchal attitudes and stereotypes, but also in deeply rooted systemic gaps, which have not been addressed. These include weak rule of law, low capacity of the institutional mechanisms for gender equality and lack of political will. Some examples of systemic gender inequality in Ukraine include low level of participation by Ukrainian women in political and civic processes, especially in higher positions, patriarchal culture and deeply entrenched gender stereotypes, widespread gender-based violence, etc.
Consumer Behaviour
Price is the most important factor for Ukrainian consumers. In addition, they are greatly attracted to Western products, which are considered 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, given that shops very rarely exchange defective goods. For this reason, consumers have a poor image of this aspect of sales in the country. According to a study published on the Baltic Journal of Economic Study, "highly rational, cautious, and demonstrative behaviours" can be observed in case of high consumer involvement in the buying process. “Rationally confident, comfortable, adaptive behaviour" can be observed in the case of low involvement.

According to Euromonitor International, low consumer confidence is affecting consumer-shopping habits. Ukrainians are generally reluctant to shop for groceries online because of trust issues. Many consumers are afraid that they would get products of lower quality if ordering online. Young consumers are driving substantial growth in internet retailing and young adults in online shopping. Mobile internet retailing showed double-digit growth in recent years, while continuing the long-term trend of shifting to “mobile first” internet use amongst the population. The development of the mobile internet infrastructure in Ukraine, driven by the expansion of 3G/LTE network coverage across the country, was a major influencing factor for the channel.

Locally produced promotional advertising is an effective method to inform Ukrainians about new products. Including the name of a Ukrainian or Russian distributor and local address on original packaging increases consumer confidence. Second-hand shopping is also growing in popularity.

Consumer Recourse to Credit
According to the National Bank of Ukraine, the growth in household income seen in recent years somewhat decreased the debt-service-to-income ratio (around 20%); however, falling incomes during the quarantine made debt servicing much more difficult. A survey of banks showed that customers with monthly income of up to UAH 7,000 spend about a third of what they make on loan servicing. The debt burden of many individual entrepreneurs also increased in 2020. Despite the rapid lending growth in recent years, the debt burden of low-and middle-income households has increased only slightly, with the debt-to-income (DTI) ratio for borrowers ranging from 13–14%.

The ratios of total debt burden to GDP and to net disposable household income have been stable in recent years. However, the debt burden is expected to increase following the COVID-19 related crisis.
According to the latest figures from Ukr Stat, the weighted average on interest rates on loans in local currency stood at 29.5% at the end of Q2 2020.

Although credit cards are commonly used in Ukraine, cash is more preferred among locals. Nevertheless, the pandemic and quarantine restrictions have accelerated the shift in households’ payment habits towards cashless settlements, including online payments. In the first nine months of 2020, the total number of transactions (cashless payments and cash withdrawals) involving payment cards issued by the Ukrainian banks was UAH 4,310.2 million, with the value of these transactions totalling UAH 2,807.9 billion (National Bank of Ukraine). The total number of payment cards issued in Ukraine as of 1 October 2020 stood at 73.4 million.Although credit cards are commonly used in Ukraine, cash is more preferred among locals. Ukraine's household debt accounted for 5.8 % of the country's Nominal GDP in Dec 2017, compared with the 6.8 % in the previous year.

According to a report posted on the central bank's website, 62% of respondents (bank managers) predicted the growth of consumer loans. In the fourth quarter of 2018, the demand for loans from the public continued to increase. Consumer lending contributed to growth in the retail loan portfolio in the fourth quarter of 2018. The demand for respective loans was linked to an improvement in consumer confidence and a rise in spending on durable goods.

Growing Sectors

The economising trend has been very influential in consumer preferences in apparel and footwear. This has been successfully exploited by large international retailers such as LPP, Inditex and H&M, which can deliver cheap clothing and footwear in a variety of styles. Despite the strong competition, some Ukrainian clothing and footwear brands that were launched over the last five years have found their niche. Brands such as Staff, Urban Planet and Syndicate Original are well-known amongst young urban dwellers in Ukraine.

During the economic downturn, 2015-2016, Ukrainian consumers often refrained from purchasing electronics and appliances. The more economically successful period that followed was marked by significant growth in volume sales of such products. The constant increase in omni-channel sales was a major trend, which determined the development of the channel. The grey import of electronics remains a significant problem in Ukraine: in fact, many products reach Ukraine not through official brand dealers, but via independent importers, most of which operated in a grey area.

Home and garden specialist retailers in Ukraine exhibit a positive performance in retail current value terms. At the same time, many Ukrainians still cannot afford to buy high-end products and are mostly concerned to get the lowest possible price when shopping for home, furniture and gardening items.

Consumers Associations
State Service of Ukraine on Food Safety and Consumers Protection (SSUFSCP) , State agency


Importing & Distributing

Import Procedures

Ukraine recently introduced the “Single Window” electronic data exchange system that allows customs authorities to automatically exchange information about the goods entering Ukraine, simplifying customs procedures and reducing the time for clearance.
After the importer submits scanned copies of the required documents (see below) together with an electronic communication, an authorized officer of the controlling body shall decide on the completion of the relevant state control or the need for additional review or other actions within four working hours after receipt of the electronic message and scanned documents.  If no decision are taken, the system automatically forms a decision on the implementation of the appropriate type of state control.

According to the Ukrainian Customs Code the declarant or his authorized representative should provide in the customs declaration the information on:

  • Documents certifying the authority of the person submitting the customs declaration;
  • Foreign trade agreement (contract) or other documents confirming the right of possession, use and/or disposal of goods;
  • Transportation documents;
  • Commercial documents available to the person submitting the declaration;
  • If necessary, documents confirming compliance with non-tariff regulation of foreign economic activity;
  • Documents confirming compliance with the restrictions arising from the use of protective, antidumping and countervailing measures (if such restrictions exist);
  • In certain cases documents confirming the country of origin;
  • If necessary, documents confirming the payment and / or secured payment of customs duties;
  • If applicable, documents confirming the right to benefits for customs duties payment, full or partial exemption from customs duties under the chosen customs regime; and
  • If necessary, documents confirming the change of customs duties payment terms;
  • Imported products are subject to radiological control which is, in most cases, performed at the customs.

A Certificate of Origin is required when preferential customs duty rates are applied, when certain quantitative restrictions on movement of goods across the customs border of Ukraine are applied, and if it is required by Ukrainian law or international treaties.

Specific Import Procedures
The government of Ukraine updates the list of products subject to import and export licensing every year. The latest list included, among others: pharmaceuticals, paints and lacquers, dyes, hygiene products, cosmetic products, pedicure and manicure products, shaving aerosols and deodorants; lubricants, waxes, shoe polishes, insecticides, solvents, silicone, fire extinguishers and the chemicals that fill extinguishers; refrigerators and freezers, air-conditioners, humidifiers, and other selected industrial chemical products; fungicides, insecticides, herbicides, and plant growth adjusters.
The Ministry of Economic Development and Trade is the authority that generally grants the authorizations, but there may be exceptions (i.e. the State Service of Ukraine on Medicines and Drugs Control for medicines; the Ministry of Agriculture and Food Industry for agricultural chemicals, seeds, veterinary medicines; etc.).

Furthermore, the Ukrainian government strictly controls and restricts the transit, import, and export of weapons, narcotics, chemical and hazardous substances, and certain pharmaceutical and communications products.

Distribution channels
According to the Ukrainian State Statistics Service, Ukraine’s retail trade turnover (excluding motor vehicles) in 2020 was UAH 854.73 billion, a 9.8% increase compared to 2019. Ukraine’s food retail sales grew by 14.1% in 2020 (USDA). Independent retailers account for around 20 percent of total retail sales, while outdoor markets account for around 30 percent. Less than half of the overall retail market is controlled by chains, reflecting the considerable development opportunities that remain in Ukrainian retail. Retail superstore chains are available in the main Ukrainian cities and primarily specialise in Fast Moving Consumer Goods (FMCG), consumer electronics, Do-it-Yourself (DIY), automotive parts and accessories, cosmetics and toiletries, pharmaceuticals and health care goods.

The major international retailers in the Ukrainian retail FMCG market are Metro Group, Auchan, Rewe Group (Billa), and Spar. The top four national FMCG retailers in the market are the Fozzy Group, ATB Market, Retail Group, and Furshet. Regionally, the top retailers include: Tavria V and Kopeika in southern Ukraine; and Pakko, Barvinok, and Kolibris in western Ukraine. The most popular FMCG outlet formats that opened in Ukraine in the recent years were discounters, corner shops, and supermarkets. Domestic retailer Fozzy continues to expand its number of retail outlets in Ukraine. In mid-2016 the group launched a new discount retail outlet 'Thrash' and by the end of the year had 30 stores in cities including Kiev, Mykolaiv, Odessa and Rivne. Within the category of consumer electronics and household appliance chains - currently, the largest household appliances and electronics market players are Foxtrot, Eldorado, and Comfy. These chain operators sell most of the consumer electronics and household appliances through their retail outlets located throughout Ukraine. “Do-It-Yourself” chains - The national chain Epicenter remains the leading DIY player, with a market share of around 50 percent. The only foreign player in the market is Leroy Merlin (part of Groupe Adeo), which operates three stores in Kiev. Branded Apparel and Footwear - Multiple national premium fashion outlet chains sell branded clothing and footwear including Argo, Top Brand, Helen Marlen Group, and Melon Fashion Group, Intertop is a Ukrainian chain for branded footwear.

Over 6,000 businesses are engaged in selling pharmaceuticals. Pharmaceuticals are sold through about 20,000 private and state-owned pharmacies and pharmacy retail points About 20-30 percent of pharmacies are publicly owned. Many regions and municipalities have been looking to expand or launch so-called 'social pharmacies', which stock essential medicines and charge little or no mark-up.
Distribution market players
Since 1991, when Ukraine declared independence from Russia, the retail industry has grown, with a dozen chains nationwide and a few strong regional players. Some retailers operate diverse chains of stores that differ by size and brand. According to the Ukrainian Statistics Agency, in 2020, there were:

•    7,730 grocery stores of less than 120m2
•    1,859 specialty food stores
•    2,676 convenience stores, from 120m2 to 400m2
•    2,016 supermarkets, from 400m2 to 2500m2
•    142 Hypermarkets, over 2500m2

Retail Sector Organisations
Ukrainian Retail Association


Operating a Business

Type of companies

Tovarystvo z Obmezhenoyu Vidpovidalnistyu ou TVO (Private Limited Company)
Number of partners: Minimum 1, no maximum.
Capital (max/min): No minimum capital required.
Shareholders and liability: Limited  to the value of their contribution.
Vidkryte akstionerne tovarystvo (Joint-stock company)
Number of partners: Minimum 1, no maximum.
Capital (max/min): Minimum: 1250 times the minimum wage at the date of registration
Shareholders and liability: Limited to the value of their contribution.
Limited partnership
Number of partners: Minimum 2, no maximum.
Capital (max/min): No minimum capital requirement.
Shareholders and liability: Liability of the active partners is unlimited, that of sleeping partners is limited to the value of their contribution.
General partnership
Number of partners: Minimum 2.
Capital (max/min): No minimum capital requirement.
Shareholders and liability: Liability is unlimited.
Setting Up a Company Ukraine Eastern Europe & Central Asia
Procedures (number) 6.0 5.3
Time (days) 6.5 11.8

Source: Doing Business - Latest available data.


Cost of Labour

Minimum Wage
UAH 6,500 per month since 1st January 2022 (official governmental sources)
Average Wage
Gross average monthly wage: UAH 14,577 (source: State Statistics Service, January 2022).
Social Contributions
Social Security Contributions Paid By Employers: 22% of the gross remuneration (capped at 15 times the minimum salary).
Social Security Contributions Paid By Employees: 0%

Intellectual Property

National Organisations
Ukranian Intellectual Property Institute (Ukrpatent)
Regional Organisations
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property


Tax Rates

Consumption Taxes

Nature of the Tax
Podatok Na dodanu Vartist (PDV) (Value Added Tax)
Tax Rate
Reduced Tax Rate
A 7% VAT applies to supplies of pharmaceuticals and healthcare products; supplies of certain services related to admission to shows, theatres, concerts, museums, zoos, exhibitions and similar cultural events.
Domestic supplies and imports of agricultural products classified under the following HS customs tariff headings are subject to a 14% reduced rate: 1001, 1003, 1005, 1201, 1205, 1206.
Exports, international transportation services, and processing and repairs of imported movable property that is subsequently exported from Ukraine are zero-rated.
Other Consumption Taxes
Excise duties are levied on alcohol, alcoholic beverages, beer, tobacco and tobacco products, cars, car bodies, motorbikes, electricity, liquefied gas, petrol, diesel fuel, other fuel material, and electric power.
A vehicle tax of UAH 25,000 is charged on owners of passenger cars with an average market value exceeding 375 minimal salaries (i.e. UAH 2,512,500 for 2023) and less than five years old.

Corporate Taxes

Company Tax
Tax Rate For Foreign Companies
A company is deemed to be resident in Ukraine for tax purposes if it was incorporated in Ukraine.
A permanent establishment is defined - in accordance with OECD's model - as a fixed place of business through which the business activity of a non-resident company is wholly or partly carried out in Ukraine (it includes a place of management, affiliate, office, server, etc.). As of 1 January 2022, a foreign company that has its place of effective management in Ukraine may apply to become a Ukrainian tax resident.
Capital Gains Taxation
Capital gains are treated as ordinary income and taxed at the standard corporate tax rate.
Main Allowable Deductions and Tax Credits
Most expenses incurred relative to the activities of the company are deductible for tax purposes. Assets with a value greater than UAH 20,000 and a useful life of more than one year are subject to depreciation. Depreciation is determined monthly based on different depreciation calculation methods (linear, decreasing, variable, exceptional). Goodwill cannot be amortised for tax purposes.

Organisational and start-up expenses are fully deductible and are not subject to a cap. Interest is also deductible (restrictions apply to interest paid to non-residents) as are fines and penalties (except for those paid to companies that do not pay corporation tax or are subject to a 0% tax rate). Taxes, with the exception of corporation tax, withholding taxes and non-recoverable VAT, are deductible. The obligatory Ukrainian social security insurance contributions paid by employers are deductible. R&D expenses are also deductible.

Donations to charities are only deductible up to 70% and are capped at 4% of the previous year's taxable income. This rate is raised to 8% for donations to NGOs involved in sports and physical culture. Following the introduction of martial law, the scope of recipients eligible for charitable assistance has been expanded, and the limitation on the deductibility of costs has been adjusted. The added recipients include the Ukrainian armed forces, other military units formed under Ukrainian laws, the Ministry of Internal Affairs, a central executive power body responsible for civil defence, state/communal health protection institutions, and local health protection authorities. Additionally, the deduction limit of 4% of the previous year's taxable profit does not apply to specific goods and services provided for free to non-profit organizations. These goods and services include special personal protective equipment (helmets, body armour), technical observation devices, medicines and medical devices, personal hygiene products, food, and other items, as determined by the Cabinet of Ministers of Ukraine.

Tax losses can be carried forward without any restrictions; however, large taxpayers may utilise only up to half of accumulated tax losses from previous tax years in their current tax return. The carryback of losses is not permitted.

Resident companies would increase the taxable basis for corporate income tax by 30% of the value of goods, works and services sold to residents of low-tax jurisdictions and foreign companies having special legal forms.
Other Corporate Taxes
Owners of residential and non-residential property are subject to local real estate tax. Legal entities that own residential or non-residential real estate are subject to tax at a rate of up to 1.5% of one minimum salary as of 1 January of the reporting year per square meter owned. Land tax is imposed on the owner/user at rates that go up to 12% for legal entities (depending on the category, location, and the existence of a state valuation for each particular land plot). In light of the implementation of martial law, there will be no assessment or payment of real estate tax for the following categories: (i) real estate located in areas affected by ongoing or previous military operations, (ii) real estate temporarily occupied by Russian armed units, and (iii) residential real estate rendered uninhabitable due to the military aggression by the Russian Federation against Ukraine.

Social security contributions payable by the employer amount to 22% of the salary and are capped at 15 times the minimum monthly salary (minimum UAH 1,474 and maximum UAH 22,110 per month as of 1 January 2023).
A mandatory pension fund contribution applies to certain transactions at rates of 1% for land/buildings, 3%/4%/5% for vehicle purchases, 10% for the governmental plate mark on jewellery, and 7.5% for the usage of mobile services.

State duty is imposed on the transfer of real estate and vehicles. A local transport tax of UAH 25,000 is charged on owners of passenger cars with an average market value exceeding 375 minimal salaries (i.e. UAH 2,512,500 for 2023) and less than five years old.

Companies that discharge contaminants into the environment or dispose of waste are subject to an environmental tax, whose rate varies according to the level of contamination. Companies engaged in extracting mineral resources are subject to specific taxation.

Further taxes may be levied at the discretion of the local authorities.
Other Domestic Resources
State Tax Service of Ukraine

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
See the list of tax treaties signed by Ukraine
Withholding Taxes
Dividends: 0 (residents)/15% (non-residents)/9% (dividends received from collective investment funds)/18% (dividends from privileged shares or other fixed payments on shares, as well as to disguised employment income); Interest: 0 (residents and interest income received from government securities)/5% (paid to non-residents on loans made to Ukrainian residents from qualifying Eurobond issuance proceed)/15% (non-residents); Royalties: 0 (residents)/15% (non-residents).
These rates may be lower under a tax treaty.