Last updated on April 17, 2014 at 17:30 EDT

Financial Times: Ukraine’s IT Services Boom

August 23, 2012

KYIV, Ukraine, August 23, 2012 /PRNewswire/ –

Ukraine’s IT outsourcing sector has boomed over the last 10 years, reports the
reputable British news source Financial Times in its blog post “Tapping Ukraine’s IT
Potential”. According to the post, the Eastern European country earned over USD 1 billion
on its IT services export in 2011 alone.


The latest export figure marked the nearly tenfold increase in the last ten years.
Ukraine demonstrated a 30-40 percent annual growth since 2008, reads FT.

Comparably, in Romania the IT outsourcing exports are estimated at USD 586 million, in
Poland – USD 451 million, according to Central and Eastern European Outsourcing
Association. IT outsourcing market volume in the neighboring Hungary roughly equal USD 475

Ukrainian IT market still greatly benefits from strong science schools founded in the
time of the Soviet Union, reports the Financial Times. The scientific institutes that used
to produce rocket scientists, under current market conditions, have switched to producing
programmers, commented the author of the post. Remarkably, an estimated 16,000 IT
specialists graduate each year in the country of some 46 million.

The country boasts the largest pool of engineering resources in Central and Eastern
Europe with around 25 percent of the regional IT offshoring market, stated a CEO of a
US-based outsourcing company that employs 1,900 specialists in Ukraine. Ukrainian software
market demonstrates the highest ratio of research and development (R&D) to IT services.

Moreover, starting January 1, 2013, and up until January 1, 2023, enterprises
producing software are exempt from paying value added tax on software supply operations in
Ukraine. VAT relief will apply to the supply of operating systems, regular computer
programs, system administration, encryption software, websites, online services, testing
and consulting in the area of IT, etc. The law also reduced the IT companies’ employees’
income tax rate to a symbolic five percent.

Notably, almost 1,000 outsourcing companies are registered in Ukraine. They provide
services to numerous international companies including Microsoft, HP, IBM, Cisco, EBay,
etc. Apart from that, many IT industry leaders employ Ukrainian specialists; some 700
Ukrainians work in the Seattle office of the world’s top IT corporation Microsoft.

SOURCE Worldwide News Ukraine

Source: PR Newswire