5 reasons why it's worth establishing in Ukraine via Lviv
Instead of the traditional "capital-to-market" thinking, many companies interested in Ukraine's reconstruction market should seriously consider a new market entry strategy in the changed situation.
At the moment, many factors support establishing in the Ukrainian market via Lviv. Here are five of them:
#1 Safest major city. Currently, Lviv is by far the safest major city in Ukraine. Safety not only refers to physical security but also to the attractiveness of the economic area for both domestic and international investments. Safety is evident in everyday life through the functionality of infrastructure and public services, making it also a recruitment advantage. Many Ukrainian companies have relocated their operations to Lviv.
#2 Shortest distance from Western Europe. In addition to economic activity, it's worth noting that Lviv is currently 8 hours closer to Helsinki than Kyiv, for example. Lviv can be reached within a day, whereas a trip to Kyiv requires an overnight stay.
A round trip to Kyiv practically means two extra travel days. If a company representative visits the sales office 8-12 times a year, visiting Kyiv means 16-24 extra travel days compared to Lviv.
#3 Fastest-growing economic area. Lviv is currently the second-largest city in Ukraine and the only major urban center experiencing growth. The Lviv economic area currently has about 1.5-1.7 million inhabitants, a significant portion of whom are high-income IT professionals, as the city is the main hub of Ukraine's large IT industry. As a market, Lviv is even larger than the whole of Estonia.
#4 Center of transportation and logistics. Lviv has become Ukraine's main hub for road and rail logistics, and a large portion of new production and logistics investments have been located in Lviv. During the war, about 30 factory projects were launched in Ukraine, and 2/3 of them are located in Lviv and other parts of Western Ukraine. The NATO border is 60 kilometers away. Krakow (320 km) and Warsaw (390 km) can also be reached by train.
#5 Lowest corruption. Western Ukraine and Lviv are the least corrupt operating environments in Ukraine. This could be elaborated further, but in summary, it is due in part to Lviv being an IT city, with software companies serving almost 100% international clients who do not want to engage in corruption. Additionally, the role of the public sector, which is typically the recipient in corruption, is relatively smaller in Lviv than in Kyiv or other major cities.
If you are interested in getting to know Lviv, key players in the construction market, or other opportunities offered by the Ukrainian market, please contact us.