A representative forum was held in the capital to discuss current issues and prospects for the development of micro, small, and medium-sized businesses under martial law. The event was organized by the Ukrainian Business Council and UNDP as part of the Swiss-Ukrainian project “Strengthening Member Business Associations of Micro, Small and Medium-Sized Enterprises in Ukraine,” which is being implemented by the United Nations Development Programme (UNDP) in Ukraine in cooperation with the Ministry of Economy of Ukraine and with the support of Switzerland.

The forum brought together representatives of the government, international partners, business associations, and experts for a constructive dialogue on creating favorable conditions for the development of entrepreneurship in Ukraine.

Olena Shulyak, chair of the Servant of the People party and chair of the Verkhovna Rada Committee on Organization of State Power, Local Self-Government, Regional Development, and Urban Planning, outlined five key areas in which the state should move to improve business conditions: the regulatory environment, infrastructure development, human capital preservation, access to finance, and the restoration of businesses affected by the war.

She emphasized the importance of digitalization as a mechanism for genuine deregulation that eliminates the human factor and corruption risks. She paid particular attention to the problem of kindergartens with bomb shelters, which makes it impossible for women to go to work, and reported on the work of the Coalition Council, where committee leaders meet weekly with the government to solve business problems.

Oleksandr Tsybort, Deputy Minister of Economy of Ukraine for Digital Development, Digital Transformation, and Digitalization, presented specific legislative initiatives of the Ministry regarding deregulation. He announced the preparation of a draft law on the abolition of 63 outdated instruments of state regulation and the transition of most licenses and permits to a declarative principle. Tsybort spoke about the introduction of artificial intelligence to automate the issuance of licenses, which reduces bureaucracy and corruption risks.

He paid special attention to labor market reform through the Obriy system, the MVP version of which is scheduled to launch at the end of the year in the Diya app. According to him, more than 5,000 businesses have already used the digital window to submit applications, which has significantly accelerated the process.

Grigol Katamadze, president of the Taxpayers Association of Ukraine and member of the Supervisory Board of the Ukrainian Business Council, raised the fundamental issue of restoring transparent competitions for civil service positions and the need for Ukrainian experts and business representatives to participate in competition commissions. Katamadze stressed the importance of avoiding laws that “divide society” and called for transparency in the personnel policy of state bodies. In response, Olena Shulyak reported that draft law No. 13478-1 had already passed the Committee and was sent to the conciliation council for inclusion in the agenda.

Rostislav Korobka, Vice President of the Ukrainian Chamber of Commerce and Industry, spoke in detail about the specifics of the CCI’s work during wartime, in particular regarding the issuance of force majeure certificates. He explained that war itself is not considered force majeure under the law, so each case is considered individually, especially for businesses in frontline territories.

Mr. Korobka drew attention to the problem of the destruction of logistics routes, which makes it impossible to fulfill contracts and imposes penalties on entrepreneurs. He called on businesses to contact the CCI’s central office directly in difficult situations and stressed the importance of recognizing enterprises as critical to retaining personnel.

Hanna Strykun, head of the National SME Platform and ambassador of the Alliance of Charitable Organizations, presented the Alliance of Member Business Associations of MSMEs and raised the issue of digitizing communication between business and government. She made a specific request to Oleksandr Tsibort to create a digital office for business associations, as letters currently have to be sent by post in accordance with outdated instructions. Strykun emphasized that an appeal from the union carries more weight than one from an individual, as it is backed by hundreds of entrepreneurs from different regions. Tsybort promised to add this issue to the list of improvements for the Pulse platform and suggested using the deregulation dashboard to track the status of appeals.

Oleg Getman, coordinator of the expert groups of the Economic Expert Platform, raised the issue of the effectiveness of the “Cashback for Ukrainian” program, which is discriminatory because it does not apply to small businesses. He suggested considering the possibility of transforming the program and extending it to SMEs, or redistributing funds to more priority areas, in particular the E-Recovery program.

Mr. Getman also presented the results of monitoring the implementation of the SME Strategy and identified key unimplemented steps, including reforming the state supervision system, ensuring transparency in the personnel policy of the BEH and the State Tax Service, and improving the public procurement system.

Nadiya Lysetska, founder of the Ukrainian platform “Women in Business,” highlighted three critical issues for economic development.

• First, the lack of compensation mechanisms for businesses destroyed as a result of hostile attacks on relatively peaceful territories, leading to the emigration of entrepreneurs.
• Second, the complete absence of a migration policy in Ukraine, which creates staffing problems for businesses.
• Third, the inaccessibility of financing, without which Ukrainian businesses will not be able to compete with European companies during reconstruction.

Ms. Lysetska called for regional associations to be involved in the dialogue and drew attention to the growing role of women entrepreneurs who are forced to run businesses after their husbands have been killed at the front.

Yulia Ryzhkova, head of the Innovation Committee of the Ukrainian Cluster Alliance, announced the development of a cluster development concept in collaboration with the Ministry of Economy, which is to be adopted by the end of the year. Ryzhkova also presented the Cluster for Regions project, under which cluster development programs have already been adopted in the Sumy and Odesa regions, with four more regions awaiting approval of such programs. She emphasized that clusters are one of the main tools for regional development and innovation in EU countries, and Ukraine should actively develop this area.

Oleksandr Chumak, member of the Ukrainian Business Council and president of the Association of Private Employers, representative of Kharkiv, presented the specific needs of the frontline regions. He demonstrated the consequences of the shelling on October 22, when the Evolution Business Park office space, where more than 15 companies operate, was damaged, and this is already the fourth time this premises has been restored.

Mr. Chumak proposed specific solutions: a threefold increase in grants for frontline regions under the “Own Business” program (up to UAH 1.5 million), compensation for the salaries of employees of affected enterprises, compensation for destroyed property, and reservations for employees of sole proprietorships. He emphasized: “We would like no decisions regarding businesses in frontline regions to be made without the participation of those businesses themselves.”

Nadiya Bedrychuk, executive director of the Ukrainian Direct Selling Association, drew attention to the mood among microbusinesses and sole proprietors, among whom burnout and apathy are widespread. She noted a paradox: it is the residents of frontline territories who are most eager to work as private entrepreneurs, seeing stability in business amid daily threats.

Ms. Bedrychuk called on the authorities to ensure stable working conditions for simplified taxpayers for at least 3-5 years, as annual discussions about raising limits or complicating conditions scare more than a million sole proprietors. She cited statistics showing that sole proprietors in the third group actually pay 8% tax on a turnover of one million hryvnia, which is more than the tax burden of many companies in the “White Business Club.”

Mykhailo Sokolov, deputy chairman of the All-Ukrainian Agrarian Council, raised the issue of entrepreneurs who found themselves in occupied territories or suffered from shelling. He drew attention to the absurdity of labor legislation: entrepreneurs cannot dismiss employees from occupied territories because there is no communication, but they must provide them with work; farmers in areas of active combat operations are required to ensure “safe working conditions.”

Mr. Sokolov also criticized tax practices whereby banks forgive 70% of a distressed entrepreneur’s debt, but the tax authorities require payment of 20-25% of the forgiven amount. He called for changes to the legislation so that it could be physically enforced.

Olena Loienko, deputy director of the Kharkiv IT cluster, presented a platform for interaction between technology business associations and emphasized the undervaluation of human capital. Loienko drew attention to three critical needs: access to quality education and educational institutions in frontline territories, support for digitalization and digital transformation of business through European hubs (edihy), and the creation of safe educational spaces. She spoke about the underground industrial park project in Kharkiv and called on the state to decide whether businesses should “go underground” or receive compensation for restoration.

Bogdan Mosunov, head of the 4-Business association, presented the position of Sumy businesses and compared frontline businesses to Paralympians competing on equal terms at the Olympics. He presented specific proposals: reducing the simplified system rate to 2%, the possibility of voluntary payment of the unified social tax, exemption from income tax on reinvestment, and raising the threshold for VAT registration to UAH 10 million.

Mr. Mosunov drew attention to the problem of taxation of international grant aid: a business receives equipment worth UAH 1 million but has to pay UAH 230,000 in taxes, even though everything has been destroyed. He also highlighted the lack of reservation options for sole proprietors and inflated coefficients for critically important enterprises in the Sumy region.

Roman Vashchuk, Business Ombudsman in Ukraine, noted that there have been significant improvements in the work of the State Tax Service of Ukraine and the Economic Security Bureau of Ukraine, but their work is still far from ideal. He stressed that government agencies have their own characteristic “dialogue” with business, which needs to be modernized and synchronized. Vashchuk called for further improvement of interaction between regulatory agencies and entrepreneurs.

Hagen Ettner, director of the #ReACT4UA program, spoke about the work of the Alliance of Small and Medium-Sized Enterprises, created at the Ukraine Recovery Conference in Berlin in 2024. He said that the Alliance brings together more than 50 international partners who support the development of SMEs in Ukraine.

In a year and a half, they managed to create a complete map of all 86 types of SME support activities to avoid duplication and find gaps. Ettner emphasized that thanks to the SME strategy, international partners have begun to take the support of the sector more seriously, focusing on government priorities. He recommended using the strategy framework to organize dialogue between the private sector and the government, as this allows for structured discussions and specific feedback.

Galina Tretyakova, Chair of the Verkhovna Rada Committee on Social Policy and Protection of Veterans’ Rights, presented several key legislative initiatives of the Committee on Social Policy.

• The first is Bill No. 13180-d on the employment of veterans, which simplifies employment procedures for civil service and introduces a mechanism for state subsidies of up to UAH 20,000 per month for veterans’ salaries, if they are employed for a period of up to two years, thereby providing systematic support to individuals after their discharge from military service.
• The second is draft law No. 14141 on the digitization of labor relations, which will allow contracts to be concluded remotely using an electronic digital signature.
• The third is draft law No. 13507 on the characteristics of labor relations, which was developed in conjunction with the URB and analytical centers to combat “FOP instead of hiring” schemes and simplify the administration of conscientious businesses.

Ms. Tretyakova also spoke about the preparation of a new version of the law on remuneration with provisions on gender pay gaps and the problem of the underestimated minimum wage, which should be around UAH 10,000 according to the law. She invited business representatives to discuss draft law No. 13532 on maternity, which provides for UAH 50,000 immediately after the birth of a child, UAH 7,000 per month in the first year, and UAH 8,000 in the second and third years, provided that the mother returns to work.

Maksym Boroda, UNDP Project Manager in Ukraine, spoke about the three-stage support for SMEs through the program. The first stage is direct support for entrepreneurs through the Sustainable Business platform, which includes an academy with training programs and an accelerator with consulting and grants. The second level is the development of a business support ecosystem through physical infrastructure (177 entrepreneurship support points based on Administrative Service Centers, 13 “Dія.Бізнес” offices, sustainable business hubs) and support for business associations. The third level is government assistance in policy-making, in particular the development of an SME strategy and an export strategy. Boroda cited an important statistic: while only 8-9% of entrepreneurs were members of business associations before the full-scale invasion, this figure now stands at 25-30%, which is close to the European level.

Volodymyr Dubrovskyi, an expert at CASE-Ukraine, presented a study on tax evasion schemes, which was carried out with the assistance of UNDP in Ukraine and financial support from the Swiss government as part of the Swiss-Ukrainian project “Strengthening Member Business Associations of Micro, Small, and Medium-Sized Enterprises in Ukraine.” Mr. Volodymyr explained in detail the logic behind draft law No. 13507 on the characteristics of labor relations. According to his estimates, the “sole proprietorship instead of hiring” scheme costs the budget about UAH 12-14 billion per year. Dubrovsky emphasized that this bill does not compete with the ILO criteria, but has a different goal: to distinguish real outsourcing from pseudo-outsourcing. The key criterion is that if a legal entity can replace an individual entrepreneur, it is real outsourcing. The project was supported by both small business representatives who want to preserve the simplified system and specialized associations (in particular IT) that do not want abuse. Dubrovsky emphasized the revolutionary nature of the approach, which satisfied both sides and could help preserve the simplified taxation system.

A representative of the IT Association supported the bill on the characteristics of labor relations, in particular the presence of 7 out of 9 characteristics for recognizing labor relations and a judicial mechanism that prevents arbitrary interpretation. At the same time, he made a critical remark: gig contractors should be excluded from the scope of this bill, as gig work is a legitimate form of interaction in the IT sector.

He also commented on the draft labor code from the Ministry of Economy, which proposes that three of the eight signs determine labor relations, calling it a threat to the industry. The speaker called for taking into account the socio-economic processes in the country and the need to retain personnel by creating appropriate conditions for specialists to work.

Boris Emeldesh, president of the All-Ukrainian Professional Association of Entrepreneurs, supported the bill on the characteristics of labor relations, calling it a tool for the authorities to distinguish real sole proprietors from pseudo-sole proprietors. He stressed that the bill streamlines judicial practice, which currently fluctuates “50-50,” by introducing a clear “7 out of 9 signs” rule that removes discretion.

Mr. Emeldesh noted that the bill protects small businesses from accusations of “scheming” and invited critics to an open discussion to discuss each comment. He stressed that there is a judicial practice of using all these criteria, but the courts apply them haphazardly.

Natalia Karpenchuk-Konopatskaya, president of the Women’s Business Chamber of Ukraine, presented proposals developed jointly with the Achillor think tank to modernize labor legislation to ensure gender equality. She noted that 83% of the Ukrainian population considers caregiving to be the main function of women, which reinforces the traditional division of roles.

Ms. Karpenchuk-Konopatskaya gave a specific example of discrimination: a nurse with a child under the age of three cannot work night shifts even if she wants to.

The Women’s Business Chamber of Ukraine, together with experts from the Atilog team, made important proposals:

• the introduction of mandatory reporting on the gender pay gap;
• transparency of employment contracts and a ban on clauses on non-disclosure of salaries;
• the right of employees to flexible working hours or remote work for family reasons;
• paid paternity leave after the birth of a child as a mandatory norm;
• mechanisms to counter harassment and discrimination in the workplace;
• revision of articles of the Labor Code that contain outdated or indirectly discriminatory provisions.

During the war, Ukraine is undergoing the most profound transformation of labor relations in its entire history of independence. Hundreds of thousands of women have become the backbone of the economy—managing enterprises, launching businesses, and maintaining social and humanitarian initiatives.

However, current legislation does not reflect these realities and does not create conditions for equal participation in professional life.

Olga Veselovska, head of the Association of Ambassadors of Ukraine, presented civil society’s position on gender equality. She outlined three main problems:

• the lack of effective implementation mechanisms (employers do not report on gender gaps),
• the formality of quotas and policies (women are included in governing bodies but have no real influence),
• the lack of a culture of equal opportunities (prejudices are difficult to change with laws).

Ms. Veselovska proposed specific steps: requiring employers to publish average salaries broken down by gender, expanding maternity and parental rights, mandatory gender audits for large and medium-sized businesses, and protection from hiring bias through “blind recruiting.” She emphasized the importance of the role not only of the state, but also of business and civil society.

Nadiya Bedrychuk drew attention to statistics on average life expectancy in Ukraine: the gap between women and men is 12-14 years, which is the worst indicator in the world. She stressed that this means the actual feminization of the labor market in the coming years and that the return of Ukrainians after the war will primarily be the return of Ukrainian women with children.

Ms. Bedrychuk warned that if the gender pay gap is not eliminated, Ukraine will end up with low-paid jobs, which will make it impossible for women to return from more economically stable countries. This will also have a negative impact on budget revenues, as the labor market will consist mainly of women on lower salaries.

Based on the forum’s results, agreements were reached on:

• Creating a working group under the Verkhovna Rada Committee on Social Policy to finalize draft law No. 13507 on the characteristics of labor relations before the second reading, with the participation of all key stakeholders (IT Association, EBA, CCI, ACC, ILO, and others).
• Inclusion of gender equality provisions in the new version of the law on remuneration, which is being prepared by the Verkhovna Rada Committee, with committee hearings or a working group involving business associations.
• Extension of military regulations on the possibility of concluding employment contracts for companies with up to 250 employees after the end of martial law.
• Creation of a digital office for business associations based on the Pulse platform or separately to simplify communication between business and government.
• Review of the “Cashback for Ukrainian” program with the possibility of transforming or redistributing funds to priority areas of business recovery.
• Expansion of the “Own Business” program for frontline regions and inclusion of the possibility of restoring not only industrial enterprises, but also small businesses (coffee shops, barbershops, stores).