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Ease of Doing Business in

Ukraine

Ukraine Download Profile (1799.5KB, pdf)
Region Europe & Central Asia
Income Category Lower middle income
Population 45,198,200
GNI Per Capita (US$) 2,620
City covered Kiev

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 80 81 up
1
63.90 62.77 down
1.13
Starting a Business 20 24 up
4
94.40 93.88 up
0.52
Dealing with Construction Permits 140 137 down
3
61.42 61.36 up
0.06
Getting Electricity 130 140 up
10
58.45 54.84 up
3.61
Registering Property 63 62 down
1
69.61 69.44 up
0.17
Getting Credit 20 19 down
1
75.00 75.00
-
Protecting Minority Investors 70 101 up
31
56.67 50.00 up
6.67
Paying Taxes 84 83 down
1
72.72 72.99 down
0.27
Trading across Borders 115 110 down
5
64.26 65.15 down
0.89
Enforcing Contracts 81 93 up
12
58.96 57.11 up
1.85
Resolving Insolvency 150 148 down
2
27.50 27.92 down
0.42

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

DB 2017 Rank:

140

DB 2016 Rank:

137

Change in Rank:

down3

DB 2017 DTF (% points):

61.42

DB 2016 DTF (% points):

61.36

Change in DTF (% points):

up0.06

STANDARDIZED WAREHOUSE
Estimated value of warehouse UAH 2,276,025
City Kiev
Indicator Ukraine Europe & Central Asia OECD high income
Procedures (number) info_outline 10 15.1 12.1
Time (days) info_outline 67 160.7 152.1
Cost (% of warehouse value) info_outline 15.2 4.2 1.6
Building quality control index (0-15) info_outline 8 11.3 11.3
  • Measure of efficiency
    No. Procedure Time to Complete Associated Costs
    1

    Request and obtain technical conditions from water and sewage authority

    Agency: Kyivvodokanal Joint Stock Company

    The application must include the plan, information on the expected volume of water and sewerage system use, and basic characteristics of the building.

    A fee estimated to UAH 2,895.00 might be paid by BuildCo. The calculation of such fees is based on estimated labor expenditures in accordance with the Rules on using the central sewage and water supply systems as approved by Order of Ministry of Housing and Communal Services of Ukraine No. 190, from June 27, 2008 as further amended.

    21 days UAH 2,895
    * 2

    Request and obtain technical terms and conditions on fire safety from the State Service of Ukraine for Emergency Situations

    Agency: State Service of Ukraine for Emergency Situations

    According to the Decree of the Ministry of Defense of Ukraine from November 14, 2013 № 771 "On approval of rules on providing technical conditions on fire and technological security for engineering provisions of construction projects" the technical conditions for fire and technological safety are provided by the State Service of Ukraine for Emergency Situations and its territorial bodies free of charge within 15 working days from the date of receipt of the application.

    19 days no charge
    * 3

    Request and obtain urban planning specifications and requirements for land plot development

    Agency: Chief Department of Town-Planning and Architecture of the Kiev City State Administration

    To obtain urban development specifications and requirements, BuildCo submits the documents (to the Main Department of Architecture and Urban Planning of the Kyiv City State Administration) provided by the Law on Urban Planning, Order Ministry of Regional Development dated July 07, 2011. № 109 "On approval of the provision of urban conditions and restrictions land development, their structure and content" and the Cabinet of Ministers of Ukraine of December 07, 2005 № 1176.

    The architectural and technical objectives/conditions are part of the input data needed for designing the project.

    Resolution 489 of the Cabinet of Ministers "On Approval of the Procedure for Issuance of the Benchmark Data for the Designing of Town Planning Objects"dated May 20, 2009 develops provisions of Law of Ukraine No. 509-VI dated September 16, 2008. Under Regulation No. 489, the benchmark data include:
    • City planning conditions
    • Technical conditions
    • Design assignment

    The city planning conditions and restrictions are based on the respective city development rules (Rules of Development of Kiev City). These should not interfere with the engineering and architectural solutions of the project, unless only required by the need to protect the existing architectural, historical or cultural environment. The form of the city planning conditions and restrictions has been approved by the same Regulation No. 489. In order to obtain the city planning conditions and restrictions, BuildCo should submit to the Main Department of the City-Planning, Architecture and Urban Environment Design of the Kiev City State Administration the application together with the notarized copies of its foundation documents and of the documents confirming its land title as well as pre-design documents, if any.

    The documents are checked for compliance with the city development rules (Rules of Development of Kiev City) within 10 days upon receipt of the documents. In case of the positive outcome of such a compliance check, the city planning conditions and restrictions are issued to the developer (BuildCo) within 2 weeks. If, however, the outcome is negative, the respective conclusion and recommendations on elimination on noncompliance is issued within a one-month term. If the developer's intention to construct the property does not comply with the city planning documentation, it can initiate the proceeding for the amendment of such documentation by filing a respective application with the Main Department of the City-Planning, Architecture and Urban Environment Design of the Kiev City State Administration which decides on the matter within 2 weeks in coordination with the relevant bodies (land resources, environmental and cultural protection authorities, sanitary and epidemiological stations) and submits its respective proposals to the Kiev City Council for the final approval. The implementation of the relevant practice of issuing city planning conditions and restrictions to developers has already started in Kiev. Upon obtaining of the city planning conditions and restrictions, the developer should apply for the technical conditions.

    These include the data on engineering and utility servicing of the to-be constructed property (the warehouse), including the sources of supply, connection points as well as the basic engineering parameters of the property.

    The city planning conditions and restrictions as well as the technical conditions are valid until completion of construction, but for the term not less than 2 and not longer than 5 years and they can be extended at the request of the developer. The design assignment should comply with the city planning conditions and terms and refine the benchmark for design, with account for the specific features of the project. The design assignment is developed and approved by the developer and is provided to the general designer for the project.

    9 days no charge
    * 4

    Pay contribution to the city social and engineering-transport infrastructure

    Agency: Kiev City Administration

    As of January 27, 2007 according the Resolution of the Cabinet of Ministers of Ukraine, No. 40 which updates the Decree of Kiev City Council from February 27, 2003 "On shared participation (shares) of investors (Building Owners) creation of city social and engineering-transport infrastructure in Kiev City", the building which is set into operation will be approved only after paying the obligatory share of participation fees of investor into development of social, civil, engineering and traffic infrastructure of the city of Kyiv. The amount of such contribution is defined by the Chief Department of Economics and Investments of the Kyiv Municipal State Administration in certificate on approval on the stage of elaborating the project documentation.

    According to Law of Ukraine "On Alteration of Some Legislative Acts of Ukraine Regarding Assistance of the Construction", dated September 16, 2008, No. 509-VI, there is a new order on paying the contribution to the city social and engineering-transport infrastructure. This amends the relevant Law of Ukraine “On the Planification and Building-up of the Territories”, dated April 20, 2000, No. 1699-III. Under this amendment the following main features are introduced:
    • BuildCo should sign agreement with local municipal council (the Kyiv City Administration), where the terms of paying contribution to the city social and engineering-transport infrastructure (hereinafter -- “contribution payment”) is to be stipulated; such agreement should be signed before building permit obtaining
    • BuildCo should pay contribution payment after finishing the warehouse construction, but not later than one month after it
    • Contribution payment should not exceed 10% of warehouse construction budget (4% for residential buildings), excluding expenses related to obtaining the land plot for construction, installation building utility facilities and transport communications.
    • If technical terms and conditions establish need for building new utility facilities outside of the land plot, the amount of contribution payment should be decreased by the cost of such expenses.
    • Contribution payment should not be charged for rendering services, performing of works or transferring of any assets for benefits of local authorities.

    The Decision of Kyiv City Council, dated December 302012 No.573/5385 stipulates special conditions for calculating contribution payment in paragraph 6.1:

    B o b = n j * s * k, where:
    B ob - the amount of share participation developer (investor) for the construction project in the j-industry and national economic complex of the city;
    nj - standard amount of share participation developers (investors) in the creation of social, engineering and transport infrastructure of the city of Kiev with the assessment of the socio-economic value of construction projects for the city in the j-industry and national economic complex, their function;
    s - the total area of the object for which the contribution rate is determined;
    k - summarizing the correction factor.
    Generalizing the correction factor (k) is calculated for the following formula:
    from k = kz * I i, wherein
    kz - zonal coefficient;
    I i - an index that takes into account inflation since 01.01.2009 before the month in which the calculation is carried out.

    It should be noted that the standard unit of investor participation in the construction of a warehouse in the tables in Appendix 16 is not defined. This structure can be regarded as "other non-residential premises" in the table. 2, for which the norm is 45.6 USD per 1 m. m total area, or "other production areas" in the table. 3, for which the standard 54.4 USD per 1 m. of the total area.

    Zonal coefficient depending on the area of construction as shown in Table 4 will be from 1 to 2.5 (areas where, in practice, are built warehouses), however, coefficient 2 would be most likely for the areas where warehouses are built.

    Inflation index since 2009 (according to the State Statistics Committee) is 132.

    The amount of share participation in the construction of a warehouse area of 1,300.6 square meters will be: B ob = 54.4 * 1300.6 * 1.32 * 2 = 186,787.

    However, since this amount exceeds the 10% of the construction value, the contribution would be limited to 10% of the warehouse value.

    1 day UAH 227,603
    * 5

    Hire a technical supervision firm/engineer

    Agency: Licensed private firms

    BuildCo is required to hire a licensed firm to conduct technical supervision of construction throughout the construction period. The market price for technical supervision services is about 5-10% of construction costs. For a simple project the cost would be closer to 5%.

    1 day UAH 113,801
    6

    Submit declaration of the beginning of construction works

    Agency: State Inspection of Architecture and Construction Control in Kiev

    The procedure is regulated by the Law of Ukraine "On regulation of urban development" of March 12, 2011. BuildCo must notify the State Inspection of Architecture and Construction Control in Kiev about the start of construction works before it is allowed to conduct any construction activities. According to Article 36 of the Law, applicant shall obtain the right to perform construction work on objects related to I - III categories of complexity (including warehouse, which falls under the category II building), after the registration of the declaration of the beginning of construction work.

    In accordance with the Cabinet of Ministers of Ukraine "Some questions of preparatory and construction works" № 466 dated April 13, 2011, the declaration must be registered at the Inspectorate of State Architectural and Construction Control in Kiev within 5 working days from the date of submission. If inspection is not registered within the prescribed period, the applicant on the basis of "tacit consent" acquires the right to perform construction work on the 11th working day from the date when the declaration had to be registered or returned.

    7 days no charge
    7

    Request and connect to water and sewage services

    Agency: Kyivvodokanal Joint Stock Company

    The exact total price and other terms for connection the warehouse to water and sewage services should be stipulated in the agreement between the BuildCo as the customer and Kyivvodokanal Joint Stock Company as the supplier on the basis of project documentation elaborated for the purpose of connection. Therefore the cost provided above should be deemed as an average approximate cost.

    4 days UAH 700
    8

    Prepare and submit declaration of readiness to operate the constructed warehouse to the State Inspection of Architectural and Building Control

    Agency: State Inspectorate

    The procedure for obtaining permission to start the operation of a newly constructed building is regulated by the Resolution of the Cabinet of Ministers of Ukraine dated April 13, 2011 № 461 on "The acceptance of the completed construction projects" and the Law of Ukraine "On regulation of urban development." The case study warehouse will be assigned to category II or III of complexity. According to the above regulations, and laws, the acceptance for operation of building within categories I-III is carried out by the registration at the State Inspection of Architecture and Construction Control and its territorial bodies. The builder has to file a declaration of readiness to put the newly constructed building into operation. Registration of the declaration of readiness is done free of charge within 10 working days from the date of application. The date of acceptance of a building in the I-III categories of complexity is the date of registration of the declaration of readiness.

    14 days no charge
    9

    Obtain a postal address for the newly constructed building

    Agency: Chief Department of Town-Planning and Architecture of the Kiev City State Administration

    Once the construction is completed, BuildCo’s in-house engineers conduct a final topographic survey of the completed structure and the land plot. After that, BuildCo must submit an application to the Kiev City Cadastre in order to obtain a postal address and must attach the final topographic survey. The application shall include the following documents:

    - A copy of an extract from the Unified State Register of Legal Entities and individual entrepreneurs;

    - Duly approved design documentation of the construction;

    - Duly certified copy of the contribution in the creation of social and engineering and transport infrastructure of Kiev (if available).

    The Cadastre Service of the Department of City Planning and Architecture within 10 working days of receipt of the application processes the submitted materials and prepares a draft order of the Department of City Planning and Architecture on assigning an address to the object of new construction. The address is registered in the registry of addresses.

    14 days no charge
    10

    Register the warehouse with the Registration Service of the Chief Department of Justice in the City of Kyiv

    Agency: Registration Service of the Chief Department of Justice in the City of Kyiv

    The issuance of the ownership certificate and the registration of ownership rights are done with the same authority, during one single procedure. Effective January 1, 2013, the procedure for property registration was changed due to amendments to the Law “On State Registration of Property Rights to Real Estate and Their Encumbrances” as of July 1st 2004 No. 1952-VI. By this reform, the registration of ownership rights to real estate is conducted according to the “Procedure on State Registration of Property Rights to Real Estate and Their Encumbrances” as approved by the Resolution of the Cabinet of Ministers of Ukraine as of June 22nd 2011, No. 703.

    With this reform, the power to conduct the state registration of ownership rights to real estate and issue such title documents to real estate as the ownership certificates has been transferred to the State Registration Service of Ukraine, which is coordinated by the Ministry of Justice of Ukraine. The registration shall be performed within the new State Register of Property Rights to Real Estate.

    Upon performance of the state registration of ownership rights to warehouse, the BuildCo shall obtain: (1) the certificate confirming ownership rights to real property, and (2) extract from the State Register of Property Rights to Real Estate, both issued by Registration Service of the Chief Department of Justice in the city of Kyiv. The term for state registration of the BuildCo’s ownership rights to warehouse shall not exceed 14 business days as from the date of filing the application by BuildCo.

    In accordance with the amendments to the Decree of the Cabinet Ministers of Ukraine No. 7-93 as of 21 January 1993 "On State Duty", the state duty to be paid by BuildCo for state registration equals to 7 tax-exempt minimum incomes, which amounts to UAH 119. In addition, BuildCo must pay UAH 120 for the ownership certificate.

    7 days UAH 239

    * Takes place simultaneously with previous procedure.

  • Measure of quality
    Answer Score
    Building quality control index (0-15) 8.0
    Quality of building regulations index (0-2) 2.0
    How accessible are building laws and regulations in your economy? (0-1) Available online; Free of charge. 1.0
    Which requirements for obtaining a building permit are clearly specified in the building regulations or on any accessible website, brochure or pamphlet? (0-1) List of required documents; Fees to be paid; Required preapprovals. 1.0
    Quality control before construction index (0-1) 0.0
    Which third-party entities are required by law to verify that the building plans are in compliance with existing building regulations? (0-1) . 0.0
    Quality control during construction index (0-3) 2.0
    What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections by in-house engineer; Inspections by external engineer or firm; Inspections at various phases. 1.0
    Do legally mandated inspections occur in practice during construction? (0-1) Mandatory inspections are always done in practice. 1.0
    Quality control after construction index (0-3) 3.0
    Is there a final inspection required by law to verify that the building was built in accordance with the approved plans and regulations? (0-2) Yes, in-house engineer submits report for final inspection. 2.0
    Do legally mandated final inspections occur in practice? (0-1) Final inspection always occurs in practice. 1.0
    Liability and insurance regimes index (0-2) 1.0
    Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1)  Architect or engineer; Construction company. 1.0
    Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) No party is required by law to obtain insurance . 0.0
    Professional certifications index (0-4) 0.0
    What are the qualification requirements for the professional responsible for verifying that the architectural plans or drawings are in compliance with existing building regulations? (0-2) Minimum number of years of experience; Passing a certification exam. 0.0
    What are the qualification requirements for the professional who supervises the construction on the ground? (0-2) Minimum number of years of experience; Passing a certification exam. 0.0