Business

businesses in Ukraine spend 192 hours a year on bureaucracy

Bureaucracy in Ukraine hinders business, but not as much as, for example, in the Czech Republic, Georgia, Hungary, and Slovakia. This conclusion can be drawn on the basis of the Bureaucracy Index 2024 study, which was conducted by the Slovak Institute of Economic and Social Research with the participation of think tanks from Hungary, Poland, the Czech Republic, Georgia and Ukraine, Komersant ukrainskyi reports.

Ukraine was represented in the study, which assesses the compliance with regulatory requirements faced by small and medium-sized enterprises when starting a business and its daily operations, by the Institute for Economic Research and Policy Consulting. The results in several categories were published on its website.

Starting a business

Among the countries surveyed in 2024, Ukraine recorded the highest regulatory burden required to start an industrial small business – 64 hours. In Poland, this figure was the lowest – only 19 hours. Other countries required much less time to start a business than Ukraine, ranging from 37 to 46 hours.

In terms of the speed of opening a small hotel, Ukraine also became an outsider – 79 hours. However, in almost all the countries surveyed, except Poland (24 hours), the bureaucratic process took a fairly long time, almost comparable to Ukraine’s, in particular due to strict hygiene regulations.

Doing business

Ukraine is finally among the best in this category, right after Poland. This indicator measures the annual number of hours of administrative work for established industrial small businesses. Ukrainian businesses need to spend 192 hours on this, which is more than the 148 hours in Poland, which is the leader of the ranking, but much less than Slovakia (272 hours or 34 working days), which is an outsider in this category.

In Ukraine, as in most of the countries surveyed, the main time spent on business regulations is spent on procedures related to human resources management – 40%. In contrast, in the Czech Republic and Poland, the largest regulatory burden relates to operational management, which is moderate in Ukraine at 22%. At the same time, Ukraine is characterized by higher than average time spent on “other” activities, such as submitting statistical reports to government agencies and adjusting to legislative changes.

Legislative changes

Administrative costs of adjusting to legislative changes are an important subcategory of the bureaucracy index. This subcategory includes an analysis of the three main regulations and changes to them for business activities – income taxation, labor and commercial codes. In 2024, Ukraine recorded the largest number of legislative changes – 35, which significantly increased the bureaucratic burden of doing business in our country.

Overall rating

Ukraine’s final result was one of the best – second only to Poland. In 2024, this country had the most favorable business environment in terms of time spent on regulatory compliance or “bureaucracy”. In the overall bureaucratic ranking, Poland ranked 173, Ukraine 267, the Czech Republic 275, Georgia 282, Hungary 299, and Slovakia 328.