• Why it is important for Ukrainian talents to work for Ukrainian entity?

Why it is important for Ukrainian talents to work for Ukrainian entity?

28 April 2022

The economic front has no borders; everyone who works for the Ukrainian economy accelerates Victory!

Since the war devalued most of savings and sources of income of every Ukrainian, more and more people who do not participate in active fighting or is not involved in volunteering are looking for new and/or additional sources of income to support Ukraine's economy.

The prospects of employment abroad now seem attractive:

  • higher wages and living standards,
  • easier legal registration than before,
  • unprecedented simplification of travel in European countries,
  • many new job searching services and recruitment platforms that help Ukrainians.

Theoretically, earning more money, a person will be able to spend more to support Ukraine as a country and relatives who stays here. However, if we look at the situation from another angle, the cost of living and the level of taxes in European and other Western countries are much higher than in Ukraine. Therefore, the level of savings remaining after current expenditures cannot be considered the only advantage of the employment abroad. The most important reasons are basic physical security and the deployment of social programs during the war in Ukraine. Furthermore, career prospects depend entirely on the field of activity, and the overall higher standard of living is rather perceived as an additional bonus.

With every Ukrainian talent who decides to work for a foreign company abroad, from every 1,000 euros of wages, Ukraine theoretically loses 415 euros in taxes per month (of which 220 euros would have been paid by the employer in Ukraine and another 195 — by the employee). In addition, such professional spends a significant portion of earnings outside of Ukraine, so local Ukrainian businesses lose potential revenue, and the country as a whole — additional revenues from VAT and income tax. Unfortunately, this effect is cumulative, as local businesses pay less wages, order less from other Ukrainian companies, etc.

Several years ago, our company took part in a study of losses for the economy of Ukraine (underpaid taxes, etc.) with every human life lost in a car accident. According to various methods of calculation, losses ranged from 79 to 400 thousand euros per life (the level of grief and the impact on family and loved ones cannot be determined). For the year — from 0.53 to 2.5 percent of GDP at that time.

If we extrapolate these figures by 5% of the number of migrants who will not return to Ukraine after the victory, and assume that only half of them are adults and those economically active, the loss of even 125,000 (a figure today, when about 5 million people left the country) employees will lead to long-term losses of the Ukrainian economy up to 50 billion euros (about 25% of Ukraine's GDP in 2021).

It is theory, but the bold fact is that it is critical for Ukraine to create new jobs and not to lose curry ones. We are exploring possibility to work from abroad, but for Ukrainian companies. Such opportunities are now offered by many companies working in professional service industry. Ukraine cannot afford to lose its citizens because of emigration and assimilation.

Currently, the Ukrainian government has introduced incredibly favorable conditions in terms of taxes, so everything is created for further activities: jobs for Ukrainians, business operation, Ukraine's economy continuity.

Moreover, if you think about moving business from regions where there are active hostilities, there is, for example, a platform to help relocate business, launched by Prozorro.Sale at the initiative of the Ministry of Economy and with the support of the Ministry of Digital Transformation and Дія.Business.

Ukrainian business now faces the challenge not only to survive, but also to think today about how to develop and scale its activities in the future. This very day, every Ukrainian is faced with a choice: what contribution to make in order to rebuild our country and bring it to a new level in the world economy.