Ukraine recently launched an e-residency program called uResidency, inspired by Estonia’s successful digital government services. The program aims to attract foreign entrepreneurs by offering remote access to services in Ukraine, such as opening a business, bank account, and paying taxes at a favorable rate. The move is part of the country’s digitalization efforts to combat bureaucratic challenges and corruption. Only citizens of India, Pakistan, Thailand, and Slovenia are currently eligible to become e-residents, with a focus on smaller businesses in the IT, gaming, digital technology, and online services sectors.
E-residents in Ukraine can benefit from the convenience of opening bank accounts from their phones, with minimal in-person involvement required. The program is free at this stage, with no hidden fees or costs for accounting services. E-residents are only required to pay taxes, with a tax rate of 5% on annual income up to 180,000 euros. With positive feedback from the beta testing phase involving nine e-residents, Ukraine is hopeful that the program will attract 1,000 residents and generate $1 million in tax revenue in its first year. Despite ongoing challenges, including the war with Russia, the government continues to prioritize modernizing the economy through initiatives like the e-residency program.
In other news, Ukraine appointed Serhii Sukhomlyn, former Mayor of Zhytomyr, as the head of the Agency for the Restoration and Development of Infrastructure. This appointment followed the resignation of the previous agency head, Mustafa Nayyem, who cited systemic obstacles limiting his effectiveness. Western partners expressed concerns over Ukraine’s ability to protect vital infrastructure from Russian attacks, raising doubts about the country’s reconstruction efforts. Sukhomlyn’s track record in managing Zhytomyr through challenging conditions provides a glimmer of hope for his success in the new role.
Furthermore, the Headway app, a Ukraine-based book summary app founded in 2018, has gained over 40 million downloads since its launch. The company has been recognized as a future unicorn in Europe, offering condensed summaries of books for readers seeking efficient ways to consume content. The app’s success story began with the founders’ personal experiences of lost love for reading and divorce, reflecting the app’s appeal in the modern era of distractions. Amidst economic challenges, Ukraine recently sold a plant in a privatization auction for $63 million, signaling efforts to raise funds through the offloading of state assets.
However, the European Bank for Reconstruction and Development revised Ukraine’s GDP growth forecast due to the impact of Russian attacks on energy infrastructure. The country’s growth projection was reduced from 6% to 4.7% for 2025, reflecting the challenges posed by Russia’s destruction of electricity generation and transmission capacities. Additionally, reports suggest that Russia plans to start exporting coal from the occupied Donbas region, potentially impacting Ukraine’s energy sector. Energoatom, Ukraine’s state nuclear energy agency, confirmed the detention of an official on bribery charges, highlighting ongoing corruption issues in the country. Despite facing potential blackouts this winter, Ukraine continues to navigate economic challenges and work towards progress in various sectors.
