How Ukraine’s European integration contributes to startups emergence

Ukraine has climbed two rungs up in the StartupBlink rating of the best countries in the world for startups, how occupying the 29th position.

At the same time, Kyiv is ranked 32nd among cities of the world and made it to the top ten European cities with the 8th rank.

To be sure, such an astonishing achievement became a result of, first of all, efforts of entrepreneurs themselves, who are willing to take risks and launch an own startup.

Starting an own innovative or IT business does not come cheap: innovators and entrepreneurs often have to put all their savings on the line and dedicate almost their entire time to that. And no matter where they launch their startup, the risk they must take to succeed is, in fact, an axiom everywhere in the world.

In this case, the task of the government is to create the most comfortable and safe legal environment for their operation and to provide adequate financial and social infrastructure.

Most Ukrainian startups gear their products toward European and global markets.

And in this context, orientation toward European standards on protection of intellectual property rights, liberalization of financial transactions between Ukraine and the EU, and competition and trade in general is the key factor of improving Ukraine’s business environment.

For example, in 2020 Ukraine began using the International Bank Account Number (IBAN) to harmonize Ukrainian payment space with European and modernize its electronic payment system.

So now, customers of Ukrainian banks can easily and conveniently identify the payer, the payee and the bank servicing them, and make transfers and receive funds faster.

For startups receiving financing from international venture funds, this seemingly insignificant change hugely simplified the communication with them.

The Association Agreement also enables de-facto unification of Ukrainian and EU markets, particularly in the financial sector – it envisages transparent yet strict regulation of the banking and nonbanking sectors and the insurance industry.

Startups actively use financial services, and therefore, it is important for them that these services are fast and convenient. Their loyalty to, and trust in, financial institutions generally shape up the stability of financial system, which, in turn, must guarantee not only the speed and convenience of service but also security of funds in bank accounts, simplicity and transparency of applying for business development loans, and many other options.

In addition, protection of intellectual property is important for every startup.

The Association Agreement with the EU implements in Ukrainian legislation perhaps the most efficient regulations on protection of intellectual property in the world.

Chapter 9 “Intellectual property” of the Association Agreement envisages accommodation of the majority of EU regulations in this sector. A simple look at EU directives and regulations that have already been translated into Ukrainian with the support from the EU’s Association4U project and are pending integration into Ukrainian legislative framework would reveal the existence of a huge room for improvement of conditions of our startup ecosystem.

In 2019, implementation of the Association Agreement brought Ukraine closer to European and international standards on electronic trust services, which would enable us in the future to make an agreement between Ukraine and the EU on mutual recognition of electronic signatures and facilitate integration into the EU’s single digital market.

All these things simplify electronic interaction of Ukrainian businesses with European partners, which is hard to overestimate in view of the restrictions imposed in response to COVID-19.

A question suggests itself: what rank in the StartupBlink rating can we achieve if we approximate our legislation to that of the EU and liberalize the access of our companies to the world’s largest market?

Prepared by Government Office experts Yulia Shevchenko, Neli Kovalyshyn and Mykola Hora, and Association4U expert Ivan Nahorniak

Source: European Pravda