Kharkiv is a city with emerging technology and innovative markets, offering a pool of opportunities to individuals to realize their projects. Ivo Radulovski and Alexey Fisun have written a city-guide about key startups and IT companies in this Ukrainian city. They say Kharkiv has a young, active and promising startup scene — and this is the roadmap for those who are ready to discover it.
Reasons for considering Kharkiv to start business:
- Kharkiv is a capital of education: the city has 92 universities and numerous professionals technical and private higher education institutions.
- Kharkiv is the second largest IT talent pool in Ukraine. About 18.000 highly qualified IT specialists are engaged in delivering various services, that is around 40% of all IT outsourcing capacity in Ukraine.
More than 250 global and domestic IT companies of various sizes and different service providers operate in Kharkiv.
- The city offers the largest business effectiveness, according to “The Financial Times” research “European Cities & Regions of the Future 2012/13.” Kharkiv was also ahead in the rating of investment appeal among different regions of Ukraine.
- Lower living costs as compared to other European cities, a nice flat in the city costs around 200-300 USD per month.
- Well connected transport infrastructure allows you to get to another side of the city within less than an hour. The taxi fare for the same route costs around 2-4 USD. Eco Taxis with electric cars will start in 2015.
What startup founders should take into account:
- Legislation of small business and entrepreneurship still requires better development. However, well qualified and experienced lawyers can assist you in the process.
- High tax rates, general VAT rate 20%, reduced VAT rate 7% on pharmaceutical supplies. The government is planning to cut tax rates by 3% this year which amounts to 17% VAT.
- Insufficient state financial, credit and property support for small businesses.
- Slight inaccuracies in accounting system and statistical reporting of small businesses.
- In 2015 instead of old-school militia, the city started new “European style” police department.
Overall, the city possesses an incredible technology boost potential, which gives entrepreneurs an ultimate advantage for rapidly growing their companies. Global industry manufacturers from the North/South America, Europe, the Mid-East, Asia-Pacific and other regions have the opportunity to scale up their businesses and partner with one of the best technological experts to develop high- qualtiy and innovative solutions.
Combining a solid pool of highly skilled and highly skilled and talented labour/experts, greater cost savings, competitive infrastructure and many other excellences, Kharkiv is by its own rights considered as the most dynamic, rapidly developing and leading technology destination in the whole Ukrainian market.
Kharkiv is one of the largest cities in Europe with an excellent base of talents and technology infrastructure frame.
The city offers an enormous choice of prospective and cost-effective tech solutions . Rolled out as business operations and infrastructure, costs are typically 15-20% lower than in the capital region. One of the specifics of the IT market in Kharkiv is also the presence of strong professional IT communities. These IT communities unite IT professionals and hold different meetings and events to share their knowledge and experience in order to gain new skills and competence.
Ukrainian Startups (FB Page) – a new movement which allows startups to get recognition and inform themselves about events and other activities. Also check out their Facebook group and find info about current, ongoing and brand new projects.
The IT Crowd Kharkiv: This is one of the biggest youth movements in Kharkiv that combines IT education, business, startups, development and recruitment events.
Karazin Startups: It is an innovation Business School at Kharkiv National University with the help of volunteers in Kharkiv and Silicon Valley. The program is not limited to computer science only, they are also interested in innovations in Biology, Physics, Chemistry, Medicine, Economics and other fields.
Kharkiv IT Cluster: Platform for communication between universities, IT companies, startups, investors, incubators, government and mass media.
Education clubs and meet-ups:
- Artificial Intelligence club is a club for developers, scientists, teachers and students who are interested in different aspects of artificial intelligence.
- PM zone is a community for education and skills development for project management specialists.
- IT talk is a different IT education and networking events provided by DataArt company
- TechTalk is a great opportunity to put your after-work time to good use, learn new information, listen to talks on hot technical topics, and meet like-minded people. TechTalk is a small technical workshop in which you can participate either as a listener or as a speaker.
- Legal Hours for IT: ILF lowers consulting costs for start-ups at Spalah co-working.
- IT HR club Kharkiv an IT recruiter community talking about the human resources market, hiring process, etc.
- QAClub is a QA testers meet-ups, with a lot of humor and networking opportunities.
- It Hub NURE Upgrade is a students’ community which is supported by the Kharkiv National Radio Technological University. It offers hackathons, education and many different events.
- BASpace is a platform for business analytic skill-up.
- Dev-Time a new platform for developers, which aims to gather professionals in the field of software development for the exchange of experience.
- Sales club is for those who “sell” ideas to teams, staff and management.
- Agile fun-club the main idea of the project is that Agile is a game, work and lifestyle – because it can’t all just be about business.
- Ruby on Rails is a group for everyone interested in ruby on rails development or learning more about it.
- Kharkiv Freelance– every few weeks they meet for some drinks to network, hang out, discuss freelancing and more.
- ThinkJava meetup Java news and features, some basic and advanced solutions as well as discussing production issues.
- Kharkiv Drupal Cafe the cafe is aiming at sharing knowledge and tricks of the trade of Drupal.
- Kharkiv WordPress the aim of these meetings is to improve the quality of WordPress development in Kharkiv and help people discuss topical issues in friendly atmosphere.
International Economic Forum INNOVATIONS. INVESTMENTS. KHARKIV INITIATIVES
During this conference the top-management league of the country discusses plans of action for the renovation of the Ukrainian economy.
- Startup Kharkiv: Startup Pitch competition, successful startups case study, business on IT products, Ukrainian and international projects.
- Startup Crash Test in Kharkiv: Global franchise events where you can test your idea, market strategy, get first users, advisers and connections.
- Open startups challenge: The mission of StartupInvest is to support innovative projects in Ukraine.
- AI Ukraine: An international conference on the practical application of artificial intelligence and data-processing.
- IT Recruiting and Management: Share your experience, discuss issues and provide practical and effective methods of human resource management .
- Face2Face Digital marketing conference: Major conference about internet marketing in Eastern Ukraine.
And the last, but not the least conferences for growing your development skills:
You can find a comfortable separate space or workplace for yourself and your company on the first floor of a residential building with a separate entrance into the city center or not far from it.
You can also book an office in a professional office building as well as some A, B or C-Class buildings and most of them are near the underground.
As a first step, you can also try to work in a café. All of them have free WiFi connections available, you just have to ask the waiter for the password if you are visiting it for the first time and for example order a coffee (1 cup will cost about 1 USD).
If you need to find like-minded people and new connections in Kharkiv, then check out the coworking spaces. IT services will cost you 40-60 USD per person per month. Moreover, there are also the possibilities to book spaces for one single day or one week.
Coworking Spaces in Kharkiv:
- Spalah: The most famous co-working space in Kharkiv. You can find most of the interesting events and meetups here.
- Art Fabrika: A project where people meet ideas and art. Co-working, networking and event space.
- Novoe Mesto: The most promising co-working space within a significant area.
- IT Cafe: Nice place for working, located in the heart of the city.
- IT Hub: A creative space in the Kharkiv National Radio Technical University
Ukraine is one of the best mid and long-term investment opportunities in the world. To get a deeper insight on the investment opportunities in Ukraine, the business climate and the current business projects, do not hesitate to contact venture capital investors:
Iventure Ukraine’s largest investment portal of private investments and venture capital.
Techinvest is specializing in investing in the early stages of building.
- Segments Accelerator just started to operate in Ukraine, building a bridge between Central and Eastern Europe. The team is providing 360 degree support to startups, including direct investments and a full range of growth related services. The main target is towards the DACH market, so if your team is looking for seed funding and a headquarter in Vienna, they can help you.
- DW Business Accelerator is a featured co-working and business acceleration facility in Kharkiv for prospects that pursue and operate on emerging Ukrainian markets, create new business opportunities for technology startup projects and joint venture stage investments, project fundraising, business plan presentations and multiple crowdsourcing activities to attract a professional audience for successful project, mass media coverage and implementations.
- Happy Farm is a business accelerator that operates in Ukraine and provides business development services for startups (or companies) and also offers further support and investment attraction for startup companies. Mentors from Happy Farm are usual guests at startup events in Kharkiv.
Crowd Investing Platforms in Ukraine:
- Biggggidea (Ukrainian only) – you can present your idea and spot starting capital for social businesses, money to develop an invention, filming and others.
- Kickstart (Ukrainian only) – helps people, who are going to present the project on a crowd investing platform. If you have a great idea they will help you to realize it. Starting a successful campaign is not an easy task. This requires an effective strategy and a good preparation. They will assist you to develop a strategy for your crowd funding campaign, create an attractive page and video for kick start. . You can rely on the smooth functioning of the project from start to finish.
- Ideax Nescafe (Ukrainian only) – here you can present your project, people will vote for your project. And if you win, you will get the money to realize your idea.
In Ukraine angel investors are represented at the level of networks and at the level of individual business angels. Here are some Ukrainian and international investors:
- Uangel is a Ukrainian business angels network founded in 2014.
- UAban Association of private investors, part of EBAN, the European business angels network.
There are no specific requirements for foreigners wishing to establish a business in Ukraine, except one: a person must have a Ukrainian Tax ID Number to make any bank or notary actions. Investors, whether Ukrainian or foreign, benefit from equal legal treatment and have the same right to establish business operations in Ukraine by incorporating separate legal entities. The procedure requires the fulfillment of certain legal formalities (registration in The Single State Register of Legal entities and individual entrepreneurs).
The Ukrainian legislation allows for and defines six organizational – legal forms of business entity:
- Individual entrepreneur
- Private unitary enterprise
- Additional-liability company
- Limited-liability company
- Public joint-stock company
- Private joint-stock company
There are 2 general types of taxes for enterprises: income (net profit) tax, which is 18% in 2015 and single tax (4% of gross profit). There are some limitations to be a single taxpayer (for small and medium enterprises). Additionally, it is possible to get VAT tax. The Personal Income Tax Rate in Ukraine stands at 15% (20% for income exceeding 12.180 UAH / 480 EUR). The tax rate on real estate depends on types of property and it’s location.
Source: StartUS Magazine