After speaking with dozens of companies every month, we have concluded that both foreign and local investors are currently active in Ukraine.

Foreign investors are divided into two types. The first group comprises those who have worked in Ukraine for a long time and know the market well; the second consists of new companies that are now entering the Ukrainian market.

Despite the war, some foreign companies that have been operating in Ukraine for a while continue to invest but are reorienting some of their sales to the West to be safe. However, some foreign businesses are afraid to spend money in Ukraine during the war and are waiting for better times before making a commitment.

New foreign entrants in the Ukrainian market rarely invest, instead spending money primarily on due diligence and exploring new opportunities. However, there are a few foreign businesses who have recently entered the market and already invested, mainly in the western part of Ukraine, far from the front lines.

Local investors are also divided into two types. First, Ukrainian companies with solid sales and extra cash on hand, which is hard to move out of the country, that are investing in local markets with confidence, again mostly in western Ukraine.

However, the second type of local investor consists of Ukrainian companies with poor sales and low performance. They are not investing much and are trying to keep their companies afloat by meeting modest sales targets that will enable them to retain their teams until the war ends. However, some companies are moving their facilities to the western regions where the economic situation is better.

In 2022, FDI inflows to Ukraine collapsed to $848mn, a substantial decrease from $7.3bn in 2021 due to the Russian invasion.

Despite the ongoing conflict, 2023 saw a rebound in FDI. Net inflows reached $403mn in July 2023, up from $150mn in July 2022. Overall, FDI net inflows stood at $1.3bn in the second quarter of 2023, compared to $286mn in the same quarter the previous year. 

The positive trend continued into 2024. In the second quarter, FDI increased by $1.122bn, indicating sustained investor confidence despite the challenging environment. 

Specific sectors have attracted significant foreign investment during this period. For instance, in October 2024, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) provided $435mn to support the merger of Ukraine's telecom operators, marking the largest foreign investment since the war began.

Andrew Pryma is the founder of UBN, one of Ukraine’s leading business news publications.