The pandemic has deterred many Ukrainians from starting their own business.
In the country of 37 million people, the state registered only 54,000 new legal entities in 2020, 20% less than in 2019, according to a recent report by online database YouControl.
Nearly 15,500 new legal entities were registered in Kyiv alone. One-third, or 18,000, were registered in Lviv, Kharkiv, Odesa, Dnipropetrovsk and Kyiv oblasts. The worst situation was in the eastern Ukrainian city of Luhansk, where only about 50 new businesses started their operations.
Local utility service companies were among the most popular types of businesses to open — almost 3,500 appeared in 2020 in Ukraine. According to YouControl, this might be connected to Ukraine launching a housing and utilities reform back in 2016.
The state also registered over 3,200 wholesale trade firms. While the peak of newly registered wholesale companies was in 2016–2018, last year analysts showed a slight decline due to quarantine restrictions.
Compared to 2019, more new businesses started to focus on freight transportation (1,032 registered in 2020), rental (2,310) and real estate construction (1,547).
At the same time, YouControl reported that 10,000 businesses closed in 2020, mostly in June. Ukraine imposed a strict lockdown, forcing all non-essential businesses like cinemas, cafes and restaurants to shut down in March–May. The YouControl’s analysts believe that the June peak was a direct result of the spring lockdown.
“Not all businesses have been able to survive the lockdown,” the report reads.
Despite such modest results in 2020, YourControl analysts believe the situation could have been even worse as Ukraine had one of the longest lockdowns among European countries — 108 days.
