Mykola Siutkin, Founder and CEO of S&P Investment Risk Management Agency. Published exclusively for Novoye Vremya.
How Ukrainian Business Can Change the Country by Starting with Itself
For more than 20 years, modern Ukrainian business has been operating under rules established long before its emergence. How did corruption begin? Initially, entrepreneurs sought quick solutions to various issues and convinced officials to make minor violations or so-called “concessions.” Officials agreed, and the issues were resolved. Over time, business demands evolved into “I want this today,” leading to an increase in “rates” among officials. Eventually, it became nearly impossible to conduct business-government relations without corruption. Officials began setting “price lists,” turning the bureaucratic system into a commercial structure dictating how much a business must pay and for what. The most striking part? Businesses continue to pay.
This system of state-business relations has become the norm in Ukraine. What once began as a businessperson’s way of thanking an official for a favorable deal has now become an expected payment at the highest levels of power. The businesses that originally established these corrupt practices 20 years ago no longer exist, but their rules remain. When new entrepreneurs or officials enter the system, they simply follow the established playbook. The Ukrainian paradox is that those who created the system are gone, yet the system still thrives.
Two Perspectives on the Same Reality
Analyzing the essence of Ukrainian business presents two contrasting perspectives.
The first is the familiar narrative of complaints about a dysfunctional state, corruption, flawed legislation, and the challenges of dealing with government agencies. Companies that were established many years ago—when Ukraine was still in its formative years—continue to operate under the old system. They conduct business according to the familiar corrupt rules, where one side continues to offer bribes and the other continues to demand them, unable to imagine an alternative.
Fortunately, alongside this outdated system, a different reality is emerging—one where things, though imperfect, are beginning to function properly. In this world, businesses utilize the legal framework to its fullest potential, and corruption is absent simply because companies refuse to play by unlawful rules. This marks the rise of a new ecosystem—one driven by a different mindset and behavior, with a growing number of both local and foreign investors choosing to operate within it.
The Same Tools – Radically Different Results
Let me give you an example. A foreign company approached us with a request to develop a legal strategy using the mechanisms of Ukrainian legislation to recover over 300 million UAH in VAT refunds as quickly as possible. Within three weeks, the task was completed, and the client received the full amount in their account. We demonstrated in practice that by operating strictly within the legal framework and utilizing the mechanisms available under Ukrainian law today, it is possible to achieve maximum results in the shortest time. And all of this was done using the very legal system that many claim does not work in our country. The real question is: who has actually tried?
Together with our clients, we are helping to shape a new, “non-toxic” business environment in Ukraine. Put simply, while using the same tools, we are building an entirely different and sustainable ecosystem.
It’s important to emphasize that this is entirely a matter of choice—businesses themselves decide which system they want to exist in. It takes courage to step out of the familiar way of doing things, to stop playing by the old rules, and to create a demand for real change—a transition from the corrupt world everyone is used to into a new, sustainable system.
Navigating the Rapids of Ukrainian Business
This applies to Ukrainian companies. But there is another category—foreign investors—who are accustomed to operating in an ethical business environment. They come to Ukraine unaware that there is a system in which they are expected to “pay to play.” And believe me, they want to build the same transparent and ethical environment for themselves here in Ukraine. Our role is to show, through practical examples, that such a “non-toxic” ecosystem can exist in our country just as it does elsewhere.
Throughout history, there have always been pioneers—bold individuals who discovered new routes, jumped into boats first, and grabbed their paddles to navigate the wild rapids before anyone else. Imagine the thrill they must have felt! Business works the same way. Ukraine is a vast territory full of potential and opportunities. The pioneering foreign companies that enter the Ukrainian market—despite corruption, imperfect legislation, and difficult government relations—are not only capable of predicting demand and taking risks, but they also find excitement and satisfaction in what they are building here. It’s comparable to the adrenaline rush of a newcomer plunging into a powerful mountain river—thrilling yet dangerous.
However, history shows that most newcomers who rely solely on luck and lack proper preparation end up failing. I firmly believe that to avoid this, one needs a guide—a mentor who identifies risks, provides warnings, offers direction, and gives expert advice. Think of it like a local rafting instructor who teaches a beginner how to navigate the river safely and actually enjoy the ride.
In business terms, successfully navigating the “wild mountain river” of the Ukrainian market requires deep knowledge of the terrain. With an understanding of local nuances, an experienced guide, and the courage to take the plunge, businesses can not only enter and thrive in a new emerging market but also actively contribute to transforming the country’s business ecosystem. And that is the ultimate success.
