Ukraine is seeking to become a favorable investment destination for Korean companies looking to enter into the region.

“Ukraine is a transitional market economy with significant investment potential and has shown the highest rate of GDP growth in Europe during the last 10 years,” the Ukrainian investment delegation chief said in Seoul.

Igor Zhovkva, director of Foreign Direct Investments and International Cooperation in Ukraine, also expressed hope for more foreign investment during a recent interview with The Korea Herald.

He listed several key advantages his country offers in the global investment market, with the most attractive being its geopolitical position which grants access to three strategic regional markets ― the European Union, Russia and Asia.

The country in the center of Europe connects to the Middle East via its shipping lanes and to the rest of Europe through four out of 10 European transportation routes.

Even with its ideal location, Ukraine normally ranks in the lowest 20 percent of countries in several international ratings for favorable business climate.

Yet Zhovkva believes that the changes his government has taken plus the country’s human resource capital make Ukraine an ideal investment destination.

“Ukraine is the fourth country with the highest rate of educated people and fifth in the rate of certified IT-specialists employed in the intellectual services sector,” he said, “which means that Ukraine offers a vast labor resource with a lower cost for labor.”

Other advantage includes its potential in the agricultural industry ― 56 percent of its landmass has been determined as suitable for agricultural use ― and a “dynamically evolving” internal consumer market.

“In recent years the state has embraced investors’ involvement through a number of legal initiatives,” he said.

Several industries, such as light industry, shipbuilding and aircraft construction, farm and construction machinery industries, hotel business and alternative energy industry receive a 10-year tax holiday.

Other initiatives to make investments more attractive apply to the purchase of businesses, real estate or any other kind of object of ownership with the exception of land used for agricultural purposes, simplified tax requirements and “an automatic refund mechanism for exporters and natural persons receiving dividends from Ukrainian companies; they only pay a low 5 percent tax instead of the 15 percent.”

Concerning its negative image of corrupt managerial and bureaucratic practices, Zhovkva blames the media as well as his government’s lack of a coherent image strategy, “which takes time to develop and implement.”

“From now on, the image-building mechanism will be systemic, permanent and conducted on a regular basis,” he said.

“The implementations of the National Projects, the operation of the One-Stop Shops and Project Marketplace, as well as the planned image-setting campaign will allow us to substantially improve the investment ranking of Ukraine by 2013 and to achieve our primary goal of attracting $72 billion of investment,” he said.

By Yoav Cerralbo (yoav@heraldcorp.com)