The Russian invasion has caused significant damage to residential buildings, production facilities and industrial sites, resulting in substantial economic and social losses.
According to the Ukraine Fourth Rapid Damage and Reconstruction Needs Assessment (RDNA4), the total economic and social costs of the war in Ukraine are estimated at around USD 589 billion. However, the actual amount that would cover the cost of reconstruction and compensation exceeds trillions of dollars. The main losses are in trade and industry, agriculture, energy, mining and logistics. Frontline regions face the greatest risk. Businesses in these regions face numerous challenges, including significant infrastructure damage, constant security threats, and worker emigration. These challenges pose significant obstacles to the continuity of operations and the restoration of production capacity. Many businesses in these areas face limited access to finance, logistical challenges and inadequate government support. Consequently, businesses in these regions require not only financial assistance, but also stable legal and institutional support.
Experts of BDO in Ukraine, including Vira Savchenko, Viktoriia Kulish and Andrii Khalaim, joined the initiative of the Recovery Committee of the European Business Association (EBA) and regional offices of EBA Dnipro, EBA Kharkiv, EBA Odesa to develop business support measures in the frontline regions.
The main efforts concentrated on identifying the main problems and challenges of business in the frontline regions and developing recommendations that will help restore enterprises and create a stable business environment in these regions, which are critical for the Ukrainian economy. The proposals of the experts concentrate on support for the territories from central and local authorities, donors, international organizations, governments, banks and financial institutions.
The full list of recommendations is available in the document:
EBA Support Measures for Businesses in Frontline Regions
BDO in Ukraine keeps actively supporting the country, providing expert services to develop business and contribute to the initiatives for the recovery of Ukraine. We are part of the reconstruction process, devising effective strategies and securing international assistance. Specifically, BDO in Ukraine is an official partner of the UNITED24 fundraising platform, an active member of the Skills Alliance, and CEO Vira Savchenko is a Board Member of the European Business Association’s Ukraine Recovery Committee.
In our company, we have created a specialized group on “Restoration of Ukraine”, aimed at supporting our clients and the wider business environment in the issues of Restoration.
Our company provides a comprehensive range of professional services, including audit, tax consulting, loss assessment, corporate finance, business and IT consulting, cybersecurity, and more. If your company requires support in recovery or development, please do not hesitate to contact us. We are here to assist you at every stage of your recovery journey.
Experts of BDO in Ukraine, including Vira Savchenko, Viktoriia Kulish and Andrii Khalaim, joined the initiative of the Recovery Committee of the European Business Association (EBA) and regional offices of EBA Dnipro, EBA Kharkiv, EBA Odesa to develop business support measures in the frontline regions.
The main efforts concentrated on identifying the main problems and challenges of business in the frontline regions and developing recommendations that will help restore enterprises and create a stable business environment in these regions, which are critical for the Ukrainian economy. The proposals of the experts concentrate on support for the territories from central and local authorities, donors, international organizations, governments, banks and financial institutions.
The White Paper of the EBA offers a number of important regulatory proposals to support business in the frontline regions:
- Compensation for military risks. It is recommended that compensation mechanisms be created for internal and external investors, that predictable mobilization measures be ensured, and that the quota for reserving employees with military service be increased to 100% for critical enterprises.
- Changes in tax policy. It is proposed that the military tax be reduced to 1.5% and the unified social contribution (USC) to 10% for employers operating in the frontline areas. This is expected to alleviate financial pressures on businesses operating in these challenging conditions. It is also recommended to introduce a temporary zero rate of land and real estate tax to support businesses in these regions, which will reduce the tax burden on entrepreneurs and stimulate infrastructure restoration.
- Financing and lending. A proposal to expand the program “Affordable Loans 5-7-9%.” This will enable businesses in designated high-risk areas to access affordable financing for recovery. It is also planned to provide preferential lending for businesses that have suffered losses due to property damage as a result of military operations. The program will provide funding to rebuild infrastructure and production. In addition, it is planned to restructure loans for businesses and reformat the “eRobota” program to support the unemployed in the frontline areas.
- Logistics and infrastructure support. A mechanism will be introduced to reimburse part of transportation costs for companies operating in the Kharkiv region and other frontline regions. This item also includes the establishment of a reduced income tax rate or temporary exemption for transport companies serving the territories of active hostilities and the creation of special economic conditions for logistics.
- Establishment of special economic zones in frontline regions aimed at attracting investment and stimulating the return of economically active population.
The full list of recommendations is available in the document:
EBA Support Measures for Businesses in Frontline Regions
BDO in Ukraine keeps actively supporting the country, providing expert services to develop business and contribute to the initiatives for the recovery of Ukraine. We are part of the reconstruction process, devising effective strategies and securing international assistance. Specifically, BDO in Ukraine is an official partner of the UNITED24 fundraising platform, an active member of the Skills Alliance, and CEO Vira Savchenko is a Board Member of the European Business Association’s Ukraine Recovery Committee.
In our company, we have created a specialized group on “Restoration of Ukraine”, aimed at supporting our clients and the wider business environment in the issues of Restoration.
Our company provides a comprehensive range of professional services, including audit, tax consulting, loss assessment, corporate finance, business and IT consulting, cybersecurity, and more. If your company requires support in recovery or development, please do not hesitate to contact us. We are here to assist you at every stage of your recovery journey.
