Where to Invest in Ukraine: Opportunities and Risks
Real Estate: Striking a Balance Between Liquidity and Yield
Residential real estate remains a key vehicle for conservative investors. In Kyiv, the demand for 1-bedroom apartments in new upscale residential complexes guarantees an annual yield of 8–10%, although the entry threshold for such properties—even after the start of the war—remains very high, at least $80,000. By comparison, secondary-market housing in Troieshchyna yields 6–7% annually but requires lower investment, from $30,000. If you choose not to look at the capital of Ukraine, you can buy a studio for $20,000 in Ukraine practically anywhere in the country. Of course, that price will not remain forever, and as soon as the war ends, no matter its outcome, property values are likely to rise at least twofold, so prices of $20,000 in Ukraine will never be seen again.
Commercial real estate shows higher yields. For instance, warehouse complexes near the “Velyka Odeska” logistics hub (Highway M-05) bring in 12–15% annually through leasing to international companies and major Ukrainian firms, but the cost of entering such projects is typically too large for an individual investor. Therefore, private investors should primarily consider residential real estate in Ukraine.
Risks and Solutions:
- Military threats: Avoid properties within 50 km of active combat zones,
- Legal issues: Verify a property’s history via the Unified State Registry and use escrow accounts for transactions.
Government Bonds: Stability amid Uncertainty
OVGZ (domestic government bonds) denominated in foreign currency are the only investment instrument in Ukraine guaranteed by the government. In 2024, yields on USD-based OVGZ are 7.25% for a 3-year maturity, possibly one of the highest rates in the world considering USD-based returns.
How to buy Ukraine’s domestic government bonds?
- Open an account with a licensed broker (e.g., Dragon Capital),
- Select bonds with a fixed coupon (e.g., a 2024 issuance paying interest every six months).
Non-residents are exempt from income tax on OVGZ interest (Law of Ukraine No. 466-IX), making these instruments extremely attractive for non-residents of Ukraine.
IT Startups: Ukraine’s “Silicon Corridor”
Ukraine is among the top 5 countries in terms of IT professionals per capita (in 2023, over 200,000 developers in various IT fields, not including related sectors like marketing, which can also be considered part of IT). In 2023, venture investments in Ukrainian startups reached $500 million.
Promising niches for investing in Ukraine’s IT sector:
- DefenseTech. Drone development (e.g., AeroDrone, which raised $10 million in 2023),
- AgriTech. Precision agriculture platforms (e.g., AgriChain with an annual turnover of $5 million),
- HealthTech. Telemedicine (Doc.ua startup — 1 million users).
The best way to invest in Ukrainian startups is through funds, to minimize risks.
Agriculture
Ukraine, ranking 3rd in the world in corn and sunflower oil exports, remains a global agri-sector player. In 2024, sector profitability can reach 20–30%, thanks to two key factors: government support and growing demand for organic products in the EU. The “5-7-9” concessionary loan program allows farmers to borrow at 5% annually for equipment and 7% for processing, reducing the barrier to entry for investors.
In parallel, exports of organic products to Europe grew by 40% in 2023, opening up opportunities for buckwheat, flax, and berry cultivation. For instance, leasing 500 hectares for soy in the Cherkasy region costs 100,000 UAH per year but yields a net profit of 30,000 UAH. Building an elevator in the Vinnytsia region recoups costs in 4 years at an 18% ROI.
However, Ukraine’s agricultural sector is not without risks: droughts and sudden changes in export quotas can reduce profits. To mitigate losses, investors insure their harvests via Ukragropromstrakh, covering up to 80% of potential losses.
Green Energy
Ukraine is actively transitioning to renewable energy, aiming to raise the share of RES in the energy mix to 25% by 2030. This trend is boosted by projects with guaranteed returns: solar power plants in the Mykolaiv region receive a “green” tariff of €0.12 per kWh, while biogas plants processing agricultural waste yield 22% profitability. For example, a 10 MW plant near Mykolaiv generates €1.2 million in annual revenue.
There are two avenues for investing in Ukraine’s green energy: purchasing stakes in existing projects via the government’s Diia.Business platform or taking part in “green tariff” auctions where investors vie for the right to build new facilities. It is important, however, to account for risks: legislative changes or reduced government support after 2030, or possibly earlier given that the country remains at war. Experts recommend focusing on projects with a rapid payback period (3–5 years) and diversifying investments between solar and biogas energy.
Currency Risks and Hedging
The hryvnia remains volatile: in 2023–2024, it depreciated by 15–18%. In light of this, it is crucial to adopt appropriate strategies to hedge:
- Dollar-based contracts. Rent for residential and commercial real estate denominated in USD,
- Futures. Hedging via the Ukrainian Exchange (for instance, the UX-CURRENCY instrument),
- Diversification. Allocating capital among assets in hryvnias, dollars, and euros.
Legal Aspects for Non-Residents
- Company registration. Through Diia.City (profit tax rate of 9%),
- Purchasing land. Non-residents may lease farmland, but are not allowed to own it (Law No. 552-IX),
- Taxes. 18% income tax on rental income, 0% on dividends after corporate tax is paid.
Non-residents can rely on Double Taxation Avoidance (DTA) treaties that Ukraine has signed with over 80 countries worldwide, including all EU countries, North America, and most of Asia.
Conclusions
Ukraine offers investors a wide range of opportunities, from stable real estate with yields of 6–12% to high-risk IT startups yielding up to 35% annually. Foreign-currency OVGZ (6.5–9%) remains a safe haven for protecting capital from inflation and devaluation, while agriculture, despite a long payback horizon, ensures reliability due to global demand for agriproducts. The key strategy for non-residents should be diversification: combining liquid real estate in the capital with venture investments in promising niches (AgriTech, “green” energy) will balance risks and maximize returns in a wartime market.
This material was prepared by specialists from TridentEstate (Trident.Estate). All materials about real estate investments in Ukraine on the blog at trident.estate are for informational purposes only and are not direct recommendations regarding real estate purchases in Ukraine. To plan investments in Ukraine, you should consult specialists. Below this article, you will find a form that you can fill out so our investment consultant can call you and easily address any issues related to any investment instruments in Ukraine.
FAQ. Answers to Key Questions
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What is the minimum amount for investing in Ukrainian real estate?
For residential real estate, the entry threshold starts at $20,000 at the construction stage, $25,000 for secondary housing, and $30,000 for new residential real estate. One of those amounts is enough for purchasing a studio in Ukraine. Commercial properties, including offices and warehouses, require an amount starting from $80,000, while offering returns up to 10–12% per year.
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How can a non-resident buy Ukrainian government bonds?
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What risks do IT startups face, and how can they be reduced?
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Are there any guarantees for foreign investors during the war?
