Ukraine Insider

Copyright 2004-2014 by Dan Schramm. All Rights Reserved. Photographs and video by Dan Schramm.

This is an informational site providing inside information for people wanting to visit or do business in Ukraine. This is step one for Ukraine business start-ups. Learn all about travel to Ukraine with details on Kyiv (Kiev) and Odessa. My name is Dan Schramm and the first person information on this site is accurate, based upon actual business experiences in Ukraine. This is the only site on the internet providing such detailed and recent information on visiting Ukraine and doing business there. (This article is based on a visit in January 2004. Another article talks about my month long visit in April 2004 in Odessa and Kyiv, with coverage of the Odessa Body Art Festival. There have been some changes in Ukraine since that time which an update will address.)

This is one of the few sites that identifies upfront who is responsible for the site. I am not selling travel services, marriage or dating, or other things where the website is profiting. You can easily contact me.


Webmaster Dan Schramm in a museum in Kyiv, Ukraine. Taken January 2004. There are many sites with information on Ukraine, but all of them are trying to sell you on Ukraine. Even sources that provide serious business information are not going to tell you what it is really like to do business in Ukraine or to visit the country. This site will tell you things that nobody else will. The information on this site will save you countless headaches and expense. If you are going to establish a business, going to be working in Ukraine or even visiting, you should read the information on this site.

Much more information and features will be available on this site in the very near future. Please check back on a regular basis.

The country is called Ukraine, and not "the Ukraine." People from Ukraine will be upset if you add "the" before it. Besides, there is no such word as "the" in the Russian language.

The official language of Ukraine is Ukrainian, but due to many decades of occupation by the U.S.S.R. the Russian language is widely spoken, especially in cities. Russian is the primary language in business and in most other things in the major cities.

When I traveled to Ukraine in 2004 a visa was required. This involved time and money. Now, no visa is required for Americans and Europeans. This has opened the country up for increased tourism and has had a positive impact. This is a lesson Russia should learn as going there still involves a ridiculous visa procedure. No visa is required for Ukraine's neighbor Moldova, but there is also little reason to go there.

THE WEBMASTER/AUTHOR IN KYIV (KIEV)


Dan F. Schramm

The way things work out can sometimes be surprising. One day you are working for a club in Key West, and the next jetting off to Kyiv (Russian) or Kiev (English), Ukraine to set up a new business for the club owner, Jerry Andrews.

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Thus began my introduction to the bizarre and wonderful land called Ukraine, a former Soviet republic, now a young democracy. Pay attention to the young democracy part.

This article is like a little diary. I hope you find it interesting and informative. You will learn much more in this short article about how things really are in Ukraine, than you will learn from any printed material or any other web site. If you are coming to Ukraine on your own, you should read this and my upcoming articles.

If you are coming here on business, you should find this especially interesting. Heck, I should charge you to read it, but I won't.

Flying over the Atlantic at 38,000 Ft. on way to Munich, Germany

My flight went from Key West to Miami and then to Frankfurt Germany onboard a Boeing 747. From Frankfurt I flew to Kiev. The trip there and back was on Lufthansa. Lufthansa was a great airline to fly and had excellent food. The plane back which was out of Munich, a Boeing 767 was much newer and had more room. Luckily all my flights were on time and there were no major complications, unlike my second trip where Turkish Air got me into JFK 2.5 hours late and I missed all my Delta connections.

Flying into Boryspil Airport (Ukrainian) or Boryspol (Russian), you would not think it is the main airport of a nation’s capital and a city of over three million people. It is, like much of the infrastructure, something left over from the Soviet empire. They roll the stairway up to the plane and take you to the terminal in a bus. It is interesting and the main terminal you’ll see on the way out of the country is much larger than what you will see upon arrival. I found it interesting that small birds live inside it, feeding off of scraps from the restaurant/bar across from the duty free shop. They are hard pressed to find food though, as everything is kept clean and tidy.

It is also much cheaper to get to the airport than it is to get into the city from the airport. The airport is 25 miles (40km) south east of the center of the city and the only transportation seems to be taxi cabs. Getting to the airport costs about $20 but getting from the airport to the city can cost $85. The same journey in Moscow will cost you $200 if you are not careful. Otherwise, if you can speak Russian, or are lucky enough to get a cab driver who speaks English, you might be able to talk him down to $35 with a lot of effort. Never accept the first price. Rates are not regulated except in official taxi cabs which have meters. Most taxi cabs do not have meters. Many individuals will also give you a ride for money, but unless you speak good Russian or are with someone who does, I would not suggest that. (I have read that there is now a nice bus service for a reasonable fee that will take you into Kiev.)

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In a future article I will tell you all about going through Ukraine customs and what to look out for, what not to do. I carried in $9,500 in cash, expensive jewelry including Rolex watches, gold and diamonds, women's clothing, expensive electronics and food stuffs and other things that raise questions. I will tell you how to do all this smoothly. If you are coming to Ukraine to visit a woman you met online and are bringing in gifts, this article will be especially important. This article can save you expensive tariffs, fines or even being arrested. Check back for more.

There are two kinds of taxi cabs. The official ones with meters which are usually nicer cars and the unofficial taxi cabs. One thing, never get into a cab that has other passengers you do not know. Locals stick out their hands to flag a cab or for that matter anyone who wants to give them a ride for a price. Lots of locals with cars give rides to other locals. But you have to speak Russian as a native language to try this trick. It is the last thing a western tourist should try.

Once you are in a major city, taxi cab fares are very reasonable. You can also hire a cab for the day or whatever other period you need. We hired taxi cabs for a good part of the day for $35.00. This was in January and it was great to have a car waiting.

You will find a cab ride to be an experience unlike any cab ride you will have likely had in the United States. Everyone it seems drives like a bat out of hell. Things like traffic lanes, one way streets and stop signs are merely suggestions. Speed limit signs, like street and road signs are conspicuously absent. I was surprised that there were not a large number of banged up cars driving around. And, believe me, there are lots and lots of cars – from tiny little foreign and domestic models to big Mercedes, Volkswagens, and the occasional Lexus SUV. A local mafia chieftain has a nice shiny black Hummer, obviously kept in a garage… a very rare thing to have here.

They have never heard of auto insurance. Forget financial responsibility laws or anything of that nature. I assume they issue driver’s licenses there, but don’t quote me. I have seen the police stop an occasional car, but do not know for what. The uniformed police, called the Milita in Ukraine, have their heaviest presence in central Kyiv directing traffic and around government buildings. The milita and traffice police seem to be universally hated and are considered corrupt. The new president of Ukraine in July 2005 actually disbanded the entire 23,000 force of traffic police and is forming a new agency. One interesting thing is the absence of mechanical parking meters and the use of human parking meters who walk around collecting parking fees in Kyiv. I did not see that in Odessa.

Kiev has many forms of transportation. The major way to get into and out of the city is the underground Metro system. I found it of limited use to get around the city itself. Depending upon your location and needs you might find it useful. There is also a system of buses. There are different types of buses depending upon the length of the run and the location. These are very cheap.

Being in Kyiv in January is not recommended. Summer is much nicer. However, it is not Siberia or something. The temperatures are usually in the mid 20’s F. There was light snow and mush in the streets while I was there, but nothing real bad. The snow is very light and doesn’t pack, so forget making snowballs, as Jerry fast discovered. You can see the streets by our office in the video clip linked below. Just click on the animated photo of our office building to watch the two minute video clip. From what I have seen, there is no such thing as a car wash, or if there is, not many people can afford to go.

Living room of the Kyiv Ukraine apartment I stayed in.

With a reported unemployment rate of 13 percent and the fact that many people lost their life savings during and after the collapse of the Soviet Union, if they had any to begin with, there are few bums to be seen. In American cities, especially here in Key West because of the nice climate, you will see many bums. There is a difference between people who are unemployed and people who simply do not want to work. In Key West, we have the kind that just don't want to work. I did not see any obvious bums in Kyiv other than old men digging through garbage outside better apartment buildings such as the one I stayed at. I suppose us Westerners living in the apartment buildings throw away lots of stuff other people find useful. You will find old women with little stands on the sidewalks selling small items.

This is perhaps one reason that marriage scams and dating services are such a big business in Ukraine and Russia itself. The Chernobl nuclear accident did not help either as much of the population of Kiev fled the city and this caused massive economic disruption. ESU, the company I was working for in Ukraine was intended as a marriage agency and modeling agency, together with business services and executive services for businessmen traveling to Ukraine. It was going to be different and very professional. However, the owner decided to leave Ukraine and basicly abandoned it. More about this in another article. The collapse of the Soviet Uniion and the loss of savings also resulted in the emmigration of hundreds of thousands of people (the ones who had enough money and talent to start over elsewhere) from Ukraine and caused a "brain drain" that is still being felt today.

There were old people selling little things trying to make a living. At the end of Old Church Road where the souvenir sellers are, an old woman with a number of dogs had a bowl for donations. Anna, my translator, had a very negative attitude towards this woman and others like her. I gave her a little bit of money for the dogs. There does not seem to be much compassion in Kyiv from what I have seen.

There seems to be a lot of soldiers, and nearly as many generals. There are many hundreds of generals. There is talk of retiring several hundred, but there would still be too many left. The average soldier makes about $50.00 a month, though they have many things provided. The life of a Ukrainian soldier though, is not like that of an American soldier, but they are well dressed and seem well equipped. Some sort of an army base is nearby to Jerry’s apartment in Kyiv and we saw soldiers walking and marching through the area on a regular basis. The foreign ministry is a short distance away in the other direction, and there are probably other government buildings in the area.

Jerry finance Alfiya in the kitchen in Kyiv Ukraine.

There are no single family homes in Kyiv to speak of. All housing consists of apartment blocks built during the Soviet era. Outside of Kyiv and other cities, individuals can purchase land and build their own residences. In the cities, all the apartment buildings are owned by the government. What this means is that nobody knows who is responsible for what. Nobody seems to take care of the buildings. Most are somewhat rundown in the public areas. Many look worn on the outside, though absent the graffiti. Graffiti does exist, but is rare. Although rundown from a lack of money for updates, there isn't any garbage lying about. Nobody seems to volunteer for chopping ice or shoveling snow around apartment blocks. City employees, consisting largely of old women with ancient looking homemade brooms, can be seen sweeping snow and cleaning in central Kyiv.

However, many of the apartments are another matter, at least the ones that have been remodeled and rented for foreigners. Individuals can own apartments and many have been modernized and remodeled. The apartment in which I stayed, which is not in the city center, rents for $500 a month, which is outside the range of most locals who make an average of $150 a month. A salary of $300 a month is on the high end. Apartments in the central part of the city rent for a thousand or more. The apartment owners who rent out their apartments require that you pay them in U.S. dollars, though legally everything is to be paid in Ukraine currency Hryvnia (also grynia) pronounced “Grivna.” There are approximately five Grivna to one U.S. dollar. Ukraine law requires that most things be paid for in Hryvnia. If you give anyone U.S. currency, they will certainly not turn you down. One note of warning. If you do pay for something with U.S. Dollars and they give you change in dollars, especially 20's and larger bills, do not be surprised if they are counterfeit. If you suspect they are, ask for change in Ukrainian money.

A nicer apartment block in downtown Kiev, Ukraine.

Most apartments have European style bathrooms, with the toilet in a small room and the bathtub and sink in another. The modernized apartments also have small clothes washing machines in the bathroom, though I suspect that many apartments do, as I did not see any public Laundromats. However, the Ukrainians seem to have not of heard of clothes dryers. I don’t know what electric power costs, but it is usually included in the rent. There were no power interruptions while I was there, so it would not seem to be an issue of power. Apartments have inside clothes lines or cart type things that clothes are hung on to dry. You can see one of the drying carts near the window in the living room photograph. The other option is to hang the clothes over a radiator to dry. (My employer at the time went to a lot of trouble and expense to purchase a clothes dryer after my first visit.)

One nice touch is electric heated floors. Floors are wood, tile, marble or other stone. Floor carpeting is mostly unheard of. People are also expected to take off their shoes when entering another’s apartment. Considering all the mush outside, it is naturally a good idea. If you are considered a very important visitor the hosts may let you know you can keep your shoes on. (I suppose they are thus willing to clean up after you.)

One thing I was told and quickly discovered is that the water is brown. You might not notice when it is coming out of the tap, but draw a bath, and you’ll see brown water. It is a good idea to have a filter pitcher and filter any water you drink. Did not get any bugs like you might in Mexico and other third world countries. I am told the water is clean and safe, but it picks up stuff from the old pipes. The facets do not have threads on them, so screw-on filters will not work.

The newly remodeled apartments that are rented and sold to westerners have their own hot water heaters. There isn't room for a tank, so almost all have the instant water heaters and you never have to worry about hot water. Locals are not so lucky. Apartment buildings have common hot water heaters and some work better than others. This can be a real problem for employees and I discuss how to deal with this and other employee problems in upcoming articles.

Needless to say, be prepared for jet lag. I can not sleep sitting up, much less on an airplane, so after some 20 hours of travel, I was dead tired. At least Lufthansa has great food on their flights, even in economy class, and beverage service is excellent. I took a Boeing 747 from Miami to Frankfurt. It was my first time on that type of aircraft, and although it was very big, it was more like a bus than the Boeing 767 I took back from Munich. Boeing 747's do not operate out of Munich. The service on the flight back was also better. (My second flight to Ukraine was on Turkish Air and boy do I have things to tell you in the upcoming articles.)

After arriving in Kyiv, the first step is to fill out a customs declaration and go through customs. In my case, customs took two hours and I will tell you all about that in an upcoming article.

I had two 70 lb. suitcases stuffed with clothing, food and personal items that I hauled over for Jerry. Flying me to Ukraine with the two suitcases (and a carry-on bag for me) was actually cheaper than shipping one 70 lb. box to Kyiv from Miami. Shipping would have cost over $600 plus there is a 20 percent VAT tax on everything imported, to say nothing of all the complications of shipping and customs. This is why you should probably forget about buying presents in the U.S. and having them shipped to Ukraine for that girl you are building a relationship with. The best thing is to use an online store to buy the gift, which is already in Kyiv or Odessa, which they will then wrap up and deliver for you.

Jerry decided that we and some of the translators working for ESU should go out to eat. Jerry is very particular and Ukraine diet does not agree with him. Thus, we went to Sam’s Steakhouse. Sam’s is the nearest thing in Kyiv to an American steakhouse, though I understand there a couple of others.

Jerry and employees at Sam's Steakhouse in Kyiv, Ukraine. Photo by Dan Schramm.

Forget a salad. I was happy they had a baked potato. Then there is the food. Even though the steaks were cooked on a grill not far from us, for some reason, mine was hardly warm. It was supposed to be Filet Mignon, but it was more like pieces of a steak ripped off a bone. Their definition of a Porterhouse, Tenderloin or New York Strip are only approximations of the real thing. Nobody there seems to know what soft bread is. Bread, rolls or whatever are hard and semi-hard. There seemed to be about one waitress for every two tables. They speak English. Jerry tipped our waitress very well.

A cathedral on Old Church Road in Kyiv Ukraine

I was told that the best meat and food is smuggled out of the country to be sold elsewhere in Europe due to price controls on food. I was told the European Union has provided a couple of hundred million to Ukraine to crack down on smuggling.

Food stores have plenty of food at reasonable prices, but from what I have seen, it is not up to American standards or tastes. Fresh food like meat just isn’t the same. And if you like milk, forget about it. The milk here is not pasteurized or homogenized, much less is Vitamin D added. Some milk isn’t even refrigerated in the stores and has a shelf life of six months and one month after you open it. Stick to the refrigerated stuff. It smells bad, not spoiled, just bad. I could not bring myself to drink it, although it seemed okay to use for cooking pancakes. Other things just didn’t taste quite right, but I guess that is to be expected. I am glad we shipped over some real pancake syrup as the Ukrainians don’t have much clue what syrup is supposed to taste like. Again, forget nice soft bread. Going grocery shopping one day, I was lucky to find one package of hamburger buns that were reasonably soft. The hamburger meat we got was okay, but be sure it is cow, or “karcow”.

If you go to a restaurant, do not ask for substitutions. They seem to know only one way to make things. You will be sure to get a blank stare or worse if you ask for something to be left out or changed. There are serving sizes, which also are not changed. For instance, if a serving has three sausages you can not get two. They still have much to learn about customer service.

Church on Old Church Road in Kiev, Ukraine

When Jerry first arrived in Ukraine he hired a top rated woman translator. She had won a scholarship to university for language training. One day Jerry took her shopping and asked her what various meats were, and the answer was “meat.” What kind of meat she had no clue. When asked what was in something, the usual answer was, “I don’t know.”

Just forget about reading the ingredients from the side of a package. This isn’t the U.S. or Germany. I found it interesting that cigarette packages in Germany have warning labels that take up fully one-third of the package and say things like: “Smoking Kills,” “Smoking Kills Sperm Cells”, “Smoking Kills Children”, and equally blunt statements.

Anna, one of our translators, at a museum in Kyiv Ukraine at the bottom of Old Church Road.

Apartments in Kyiv have serious doors. They are generally solid steel on very heavy hinges. This is to prevent home invasions. I do not know how many home invasions there are in Kyiv, but the apartment doors certainly will discourage anyone trying. It would take an army, or at least a serious safe cracking setup to get inside uninvited. A foot inside the main door is another more standard door, although all the doors in the apartments I visited were big and solid. Nobody in Ukraine would use the cheap hollow-core doors we use here in the U.S. Doors with stain-glass windows also seem to be popular (for interior doors - never exterior ones) and are very attractive. In our Kyiv office, we have several sets of double doors with stain glass which are really nice.

One of my tasks was looking at office space in Kyiv with Jerry and our in-house real estate person/translator. Jerry had looked at space previously. Offices ranged from 52 square meters for about $800 a month to 120 square meters for $3,000 a month. One of the first offices we looked at was the one we rented. It was a gem and we realized this more and more during the course of the day after looking at many other offices.

Anyone wanting to rent space here for an office should keep a few things in mind. There are no such things as office buildings. You can't simply rent an office in a building and get your name placed on the directory. I would guess there is something like The Headquarters Company in bigger cities but have not come across anything like that. There is not a lot of retail space either. Retail stores are usually first floor apartments that have been turned into stores. Other stores are small standalone buildings that seem to have been plopped down in available open space. Offices are converted apartments, or simply apartment’s people want to rent as offices. Not all offices are legal and there is no easy way to find out. If you rent space in a building that is all residences and start having lots of people showing up at your office door, I guarantee angry people and police will be knocking on your door shortly. The best bet is to rent space in a building that already has other offices that have been there for a reasonable amount of time.

Photo from the Kiev Ukraine museum

We looked at space that were obviously used as offices previously because they had lots of electric and phone outlets and a hardwired Ethernet network. This space was not cheap with prices equal to other European capitals. It seems that rents are based on factors not usually considered important by westerners. Not going to attempt to explain this, it does not translate. Suffice to say, you cannot go by price alone. Most of the offices were nice to very nice, but the buildings they were in were rather ugly. Some buildings would be considered slums in the western world.

Animation of our office building in Kyiv, Ukraine. Click Image to View Street Scene Video. Shot on a Sunday so the traffic is light.

The office we rented was 95 square meters and a bit over one thousand dollars per month. The building has other offices in it and we fit in well. There is also a very nice three room apartment right next to us available for daily rental. The big difference between all the others and this one was that the building’s common areas were newly remodeled. The entry, stairs and elevator were very nice and well maintained. The hallway was marble, wood and glass, plus there was a full time security guard behind a marble desk. We’d seen a couple of buildings with a security guard inside what can only be described as a small “cage”. Speaking of cages, elevators in most buildings hold exactly three people and that is a tight fit. We looked at one office on the 5th floor of a building which did not even have an elevator. It was at the top of a very big hill on a very narrow street that was virtually a ski hill. It was no surprise the tenant was moving out. Click here to see our office location at Krasnoarmeyskaya Street 27 on a map of downtown Kiev.

Getting real estate agents to show you specific types of property is most difficult. They want to show you as many places as possible as it is customary to pay the showing agent 10 Grivna. Not a lot of money, but it adds up. Buildings are often in bad shape and nobody thinks anything of it. One expensive office we looked at was in a building that looked like it survived a 1950’s world war. The building next door that everyone would have to walk past was abandoned with every window broken. (That building was the only abandoned property that I noticed.) The people wanting to rent the space had no comprehension of these issues in relation to the amount of rent.

Photo from the museum in Kyiv, Ukraine.

Another issue concerns signs. Nobody could tell us how we’d legally go about putting up a sign. There are signs on buildings, as well as big satellite dishes hanging from them. Of all the real estate people and others we talked to, nobody could tell us the procedure for putting up a sign. There does not seem to be any permitting system. There are no permit numbers on signs. I suppose there is a process for putting up signs, but it does not seem to be public knowledge. Everyone kind of had the attitude that we should not worry about it. We should just go ahead, do what we want, and then simply pay off anybody that objected. (Much more about putting up signs in the upcoming article that covers Odessa.)

Remember when I said Ukraine is a new democracy? Well this especially applies to doing business there. Many people do not understand business or the well accepted ways of business which we take for granted. My biggest recommendation is to hire an English speaking law firm to review any lease or other contract you may sign. There is no shortage of these. Our landlords to be -- a middle aged couple -- had a lease form filled out which everyone was in a hurry for us to sign. It turns out their real estate agent has to be paid a commission by us of $400 US and our own agent had her own little personal deal going.

More surprising is that the “lease” is for a two month period. Ostensibly, this is to see if they like us and if we have too many people coming to the office that the amount they pay for security would have to be increased. Mind you, the rent is over $1,000 a month and they are all worried about the increased security fee they would have to pay. The security fee increase they were so worried about was $50 a month. We agreed to pay it, though by rights they should have just paid it out of the lease money. They were certainly getting plenty. But for us, fifty bucks a month was not worth making an issue over.

Webmaster Dan Schramm at the Kyiv Ukraine museum surrounded by religious art.

We had to explain to them, via translators, that one year was the minimum period we would consider, and we wanted an option, or first refusal rights, to renew it. I will spare you the other details, but what we thought would be a short meeting turned out to be a three hour meeting. Part of the problem is that every question was answered with a question. Even a simple question would engender everyone talking for five to ten minutes before we got an answer, which was usually short or that they did not know. Well, finally everyone presented their documents and passports, which were all duly recorded and the money turned over. (Ukrainians have internal passports which seem to be the main form of identification.)

During the course of this meeting, I asked our employee/real estate representative several times about the lease being for office space. I rephrased it each time, referring to commercial use, business operations, office space, and the like. Jerry got a bit pissed off at me, saying "Of course it is for office space." I wanted to be certain he was not being screwed. Our own employee, who was making very good money, assured us that is what the lease said.

Much later, after I had left Ukraine and the office was setup and occupied, Jerry found out that the lease was indeed a lease for an apartment and not a lease for office space. The building contained a number of offices so Jerry assumed it would not be a concern, but that was misleading. Obviously, this is why the owners were so concerned about the amount of traffic to the apartment. Their concern tipped me off that something was being concealed but nobody wanted to listen to me.

ESU was on its way. Trips to Odessa to look at office space there would follow. Flying to Odessa is much better than the eight hour drive. Be sure to purchase tickets at least three days in advance, otherwise they cost twice as much. (If you have time to spare and want to save money, you can take a train.) Shopping for all the office stuff we needed was another learning experience. Forget about finding an Office Max or Home Depot here. We are lucky Jerry had assembled a small staff of good translators prior to my arrival. Jerry has operated a number of businesses and has visited Ukraine, Russia and many other Eastern European countries, so was in a good position to organize our company and get it off the ground.

CONTINUED ON PAGE TWO - CLICK HERE

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