Frequently Asked Questions
1. Why do you propose to invest in the south of Ukraine?
South of Ukraine is considered as the most financially stable region with many incoming tourists, heavy percentage of American and Jewish immigrants and huge agricultural and industrial sector, great weather with 280 sunny days per year, located on the Black Sea Shore, and easily reach to Munich, Vienne, Berlin, Prague, Moscow, Istanbul, Warsaw, etc via local airports. According to the official news the government of Ukraine has been increasing the investment into infrastructure of the south of Ukraine since 2008 due to the high level of new immigrants from the north of Ukraine, more workers from Russia and Moldova with the families during the last 10 years, increased 3 times the quantity of newborn babies as well as improving the construction of the new buildings, shopping malls, schools, kindergartens etc. and of course it is difficult not to take into consideration the touristic sector of the south of Ukraine which brings up to 40% of the budget of the government in the south . It is also well known as the most ecologically clean part of the South-East Europe. This is mainly the reason why we decided to found our company here and to make money here.
2. Why your Investment fund is not esteemed Russian Real Estate Market or any other country of the ex USSR republic for starting the business with?
Ukraine is already moving ahead in increasing of the population very rapidly with 54 MLN permanent residents in the country plus around 10 MLN workers from Russia and other countries and around 4 MLN visitors per year. If you will check the situation with the most developed countries like Latvia, Lithuania and Estonia for investing into property you will be disappointed by the quantity of inhabitants in these countries — around 3-4 MLN inhabitants per country and it means no business in real estate in these countries. Whom are you going to sell to?
As for Russia: if you want to enter the Russian Federation it is difficult to obtain a visa there from all European countries as well as from those of North America. But all mentioned above countries do not need ANY visa to Ukraine and anyone can stay mostly up to 90 days per half year in Ukraine. Taking into consideration that Russia is sinking in corruption and perfect system of bribes and dictatorship, with too many sanctions from Europe and North America on top of the cake – our company sees no point to invest over there and take unnecessary risks.
Ukraine has got rid of corruption mostly in 2008 and now less and less governmental workers are ready to get bribes cause their salaries are very high (salaries increased 4 times since 10 years period) and the country is going to EU and no one wants to lose their permanent jobs and their future retirement money cause of getting bribes. Also police is very strict here and the official or public person who takes the bribes can easily go to jail for 12 years sentence.
We don’t make any investments into Byelorussia as well — it is quite risky to invest there now cause of some reasons: they don’t follow the international law, dictatorship, restrictions on money exchange, restriction on incoming and outgoing cash and deposits, unclear system of Law and taxes, and the last reason is partial PROHIBITION to buy real estate and resell it for foreigners.
Other countries of the ex USSR have too little inhabitants for starting the business and as a result to make profit, too far away from Europe and too difficult to reach it by plane, need visa, etc.
To make the long story short, you can mainly come to the conclusion that Comparing Ukraine with all these countries: it has NO restrictions for incoming and outgoing assets, No restrictions on money exchange, NO one asks you the source of money for the investment, NO restriction on cash withdraw, taxes are much lower than in Baltic countries and in Russia, etc.
Ukrainian government is trying to create the “perfect climate” for all those who are involved in certain businesses cause increasing the potential opportunities for businessmen will lead to more investors and more employment. Nowadays the prices for property in Baltic Countries are quite high cause they have joined the EU 6 years ago and we don’t see any opportunities to invest over there cause of NO opportunities to get profit. Moreover there is no space to grow for property cause it is completely under EU law and taxation.
Ukrainian real estate market has more space to grow and to make money cause of the low prices for labor, much cheaper construction materials and opportunities for resale. You pay tax less and at the end of the day comparing to the other countries of the EU you will make much more due to the fast turnover of economy, stable market of the mortgages available for Ukrainians and foreigners as well, the way how infrastructure grows, high level of employment, the increased salaries of people for the last 5-7 years and so on. As for the investor himself: initial money to get into the property market of Ukraine is much more less than initial entrance fee to the market of the EU or the USA.
3. To whom your company will be reselling the property after you have bought it on my behalf?
40% of the local inhabitants,
40% r foreigners,
10% of Russians
10% emigrants (to save their money and make profit)
4. Why does your company offer to invest the assets in Ukraine in general?
We have checked many countries to invest including such countries like Panama and Costa Rica but right now it is a golden opportunity to invest in Ukraine for making high and quick profit. It is like investment into HK at the beginning in 2000 year. In Europe Ukraine considers as the biggest agricultural country which feeds whole Europe and ex USSR together plus export huge quantity of grain and meat to countries of Africa and middle east. It has a lot of natural resources and enormous plants. The potential future of Ukraine is definitely bright and the benefits of investment here will be growing quite obvious in the mid term and long term perspective. Ukraine has Christian faith (98% of the churches either Orthodox or Catholic ), no muslims, no blacks, located in the continental part of Europe, great opportunities in making money in agricultural and industrial fields, good relations with EU and the USA, etc
There is the risk of devaluation of the local currency but at the same time please keep in mind the fact that huge part of commercial and residential property have been sold in USD.
5. What are the risks of the investment into your Company?
Both the profit and the turnover of the investment are very high but so the risks. The biggest risk nowadays is that in 3-4 years the government will start slowly the process of changing the taxation of the reselling the property and there will be no more golden opportunity to make a pretty penny on the flip-flops of the real estate. Of course the system of laws and system of taxes will not be changed within one month – it will take years to make the system work like in the EU, so the potential investor will always have enough time to make certain conclusions and to change the investment portfolio and find more profitable projects with more return.
You are purchasing the property which cannot disappear, or be broken – it is solid walls, great and stable long term income based on both Reselling or Renting. Property which belongs to you cannot be taken away or granted to someone without your permission, and the laws on real estate are based partially on the German Law as we have many cultural and industrial connections with Germany for years since WW2.
6. How many partners should be involved into the pool of investors which are needed to be invested into a bigger project with a bigger return?
Usually if you want to increase your profit buying land with the purpose to invest more and get more money within a shorter part of time you will need to invest minimum 700K-800K into real estate and you should buy the land, get permission and build your own shopping mall, or multistoried residential complex or commercial building for obtaining high level profit and then sell one by one all the offices or shops. In case you are lack of funds for involving in high end construction we offer you the pool of the investors of 2-3 partners and to invest money together. We strongly recommend you NOT to have more than 3 partners, cause of potential different angles of view on certain construction ideas and general mess of opinions.
In case of investment into several different projects like retails, residential and commercial, you can buy shares of different property development companies to diversify your portfolio, and as a result this way of investing will lead to increase the profit and to play with shares in different projects for minimizing the losses and maximizing the turnover and income.
7. What kind of real estate does your company offer to buy?
Number one in return is of course residential (quick purchase, refurbishing, quick selling), and if you want to rent it out — it is considered quite successful and profitable with high margin way of making money than say commercial. In case you do NOT want to resell property quickly but u want to keep it busy renting for years getting high profit you will have to pay your attention on construction shopping mall, which is more difficult to resell but easy to maintain and to rent out. If you follow our advice and you want to rent your property you will be able to get back your money in 4 years and still keep your main property in your hands. Why should you kill the chicken which brings you golden eggs?
As a conclusion:
- Commercial and retail property is more cost-effective but more unpredictable market in the meaning of reselling and rental. It is always takes more time for reselling of commercial than of residential property.
- Residential is always in demand and it is always much faster to sell but profit for resale is a little bit less than commercial though keeping in mind the faster turnover and faster reselling of it you will sell more projects for the same period of time than retail or commercial.
8. Is it more profitable to invest into retail, commercial or residential?
Depends on what you are looking for. Retail is easy to rent with high return but much more difficult to resell, residential is easy to resell but less income in renting comparing to retail. Commercial offices are easy to rent out, good profit and it is not difficult to resell it though it takes more time comparing with residential.
9. How much does your Investment Company charge to manage the whole process from the day X when I want to invest my assets into Real estate till the day Z when I got the profit or margin and what conditions does it based on?
The First Scenario: our company can manage the whole process of investment and make a pool of investors and get profit according to money you initially invested, for instance if you invest 80% and we invest 20% into construction an office building we will do all the job, preparing all documents for refurbishing or construction and obtaining all necessary permissions and when the construction is ready we just sell it as it is and we get 20% of the profit and you will get 80% of the profit.
The Second Scenario: in case you want to invest 100% of your assets into the project and be the only owner of it — we charge you 2% of the profit (in case you want to sell quickly and get your margin immediately) into the residential project, 3% if you want to do the same in commercial project and 5% in case you want to do so with the shopping mall cause it is more documents involved with retail. In case you do not want to resell the property quickly and keep it rented — we charge always 2% annual of the profit on ANY project (residential, commercial, retail).
10. What is the process of purchasing the real estate for foreigners?
Our potential partner has to fly to Ukraine for site survey, in case he likes the ideas and our portfolio and desire to make good money within a reasonably short period of time he will need to obtain an ITPN (Identification Tax Payer Number). You can get it for free within 2 working days plus you must make the official translation of the passport into Ukrainian in the local governmental office. After this procedure you can feel free to buy and sell ANY real estate on the territory of Ukraine. You choose the real estate you like, pay the deposit to the escrow account of the governmental Lawyer, next day get the phone call from the lawyer in case the property is clear, and if it is ok you can buy it within 2 hours after confirmation from the lawyer that real estate is OK and not arrested or it has no loan against it, etc. You have to pay 1% (Retirement Tax to Pension Fund), 1% the Regular tax based on price of real estate, 0,5% for the stamp duty and lawyer fee. Selling is even more simple — you have to pay only 1% Standard Tax when u want to sell it.
11. What are the restrictions on purchasing the plots of land or property?
U can buy all kinds of real estate in Ukraine EXCEPT Agricultural Fields and Meadows which are prohibited to buy or sell not only by foreigners but also by local inhabitants. It belongs to the government. U can only rent it for a period of 5 or 10 years.
12. How many permanent and temporary workers are involved in your projects? How big is your team?
We have 25 permanent staff members (such as bookkeepers, managers, CEO, economists, PR manager, translators, etc.) and a certain quantity of subcontractors which we invite for cooperation when it is necessary. We don’t keep regular quantity of the subcontractors cause of the several reasons:
— we can create the artificial competition between subcontractors and as a result to choose the best team among the best effective teams and cheapest prices cause of the certain rivalry in the construction business
— we can create stable demand and to be more cost-effective in the local market than other investment companies
— we can get the highest quality of work for reasonable money and finish hi end projects within shorter periods of time
— we can show to our partners the model of the effective team work using this way
13. Is it possible to talk to all of your team members? What is the background of each member of the team? Do you have professional Property Hunters?
If it is necessary we will send you portfolio of each member of our team including the CEO with detailed explanation of the role of each member and his/her background. When you are IN Ukraine — you are welcome to our office to say hello and to communicate with all the members of the team (who will help you and contribute their time in making money on your behalf), discuss your plans and ideas and to feel the atmosphere of the company and to see how professional we are and how we enjoy what we do. And certainly we have real wolves among our professional Property Hunters who smell the best projects and know when it is time to buy and sell.
14. Why it is time to invest now? Can I wait for my investment into property business of Ukraine the next 2 years?
Yes you can wait 2 or 3 years more to invest into property market of Ukraine but you will lose the golden opportunity to make stable additional income from abroad without paying heavy tax during the purchase, heavy tax on profit after reselling of the property and also high maintenance fee, which can eat a huge part of your profit as well like it happens in the USA. As an example: renting the property in the USA is around 7-8% return annually but the taxation and maintenance will hit your income a great deal and u will lose 2/3 of your income easily. Moreover our country will be member of the EU within the time and no one will let you to make so high profit like now in the long term cause of the taxes existing in the EU. Also after becoming the EU member the real estate will increase 5 times easily like it happens in Croatia, Bulgaria, Poland, etc and then it will become flat.
In case you invest now you will need to invest much less than in 3 years from now. The market is at the bottom line now and as a result you can face the perfect timing for investing for making good money. At the same time increasing of the style of life and salaries all over Ukraine and the demand for high end refurbished condos in Ukraine are in demand now. Potential buyers of the property don’t have time for refurbishing apartments, for looking for the subcontractors, controlling their work, no time for preparing and changing the documents on property, no time even for small renovation cause they are all busy with work, kids etc. As a reminder: special low bank interest of mortgages let them to satisfy their needs, so people do not need to dream and wait any more now but they can afford to buy the property.
15. What will happen in case of my sudden death? Who will be responsible for passing the assets to my relatives/kids?
When we sign the contract at the lawyer concerning our mutual cooperation on the basis of investment into Ukrainian market of the real estate you will have to sign a will where you will mention what to do with your property in case of your death. You will keep this document and bring it back to your country and pass it to your wife or kids. In case of your death or murder your daughter or wife or a son will have to come to Ukraine with this official paper and claim via lawyer the permission on obtaining the real estate and access to your bank account. The procedure is very simple and your relatives or siblings will get the property within 3 working days.
16. Please give me an example of the taxes and current expenses of the property I am going to buy and rent?
In case you want to rent your property you will have to pay so called current expenses of the property. Lets say you own 1000 sq feet commercial office, shop or apartment – your total expenses for maintenance and payment of gas, electricity, water, drain system, heating system will not exceed more than 200 USD per month in summer, autumn and spring and 300-350 USD in winter due to the paying for the heating system. But if you use the alternative heating you can reduce expenses. There is a very low tax on reselling the property. And there is NO tax on profit from the selling of the property. You have to pay 1% (Retirement Tax to Pension Fund), 1% the Regular tax based on price of real estate, 0,5% for the stamp duty and lawyer fee when you buy property. Selling is even simpler — you have to pay only 1% Standard Tax when you want to sell it.
17. What is the price of the renovation/refurbishing of the apartment / condo / shop / office?
It depends on what quality of the repairing you want to do: whether you want to resell it or to rent it out in the long term. YOU have to contact the manager to discuss this in details. But the higher level of renovation — the easier for us to resell.
18. How long does it take to renovate the apartment/commercial real estate approximately 2000 sq feet?
It depends on the location of the property. The average time frame is between 6 to 8 weeks for hi end refurbishing in Russian Barocco Style, 2-3 weeks in modern style and 2 weeks strictly in case this project is for reselling and you do not need to have high end refurbishing of the project.
19. Can I obtain the residency of Ukraine via investments into the Ukrainian real estate market for the purpose of escaping the taxes in the future?
Yes u can. To obtain the residency of Ukraine you do not need to live in Ukraine but you have to invest more than 100K USD and wait for 2 years to get permanent ID and after passport of Ukraine.
20. How can I wire money back to my country after I get profit?
You can open the bank account in Ukraine and send the money back and forth easily via your bank account. No restrictions apply.
21. How to get my funds back quickly in case I need it urgently back in my country?
If you have the real estate which you rent out and you urgently need money back in your country — you can sell the real estate without any delay and wire money to your bank account in your country but you have to keep in mind that for the purpose to sell the property quickly you will have to be ready to reduce the price and sell your property 10% below the market price.
22. Can I purchase the real estate using my credit card?
There is no technically such possibility to buy the property using the credit/debit card. U can wire the assets only to the account of the seller or pay by cash
23. Do you have the insurance of the real estate in case of fire, earthquake, violent actions of the third party, or flooding, etc.?
Certainly we use this way to protect additionally our partners and ourselves. We cooperate with a range of the insurance companies and compulsory get insurance and pay additional 2% from the price of the real estate.
24. What is preferable currency for purchasing and re-selling ANY real estate on the territory of Ukraine?
90% of the real estate in Ukraine is selling in USD, 8% in euro and 2% in local currency.
25. Why do you consider investing into property in Ukraine is more profitable and has higher margin than bonds and shares market in the USA, or keeping money in the local bank or bank instead?
Most people in Ukraine (85-90% according to the official statistics) are purchasing the real estate for the purpose of saving their money or making the profit in renting, cause we do not have a market of bonds and shares at all, all banks are very unstable (220 banks become bankrupt within the last few years cause it was a row of conditions of entering the EU. EU asked to have only 5 banks instead of 300 banks that we have had 5 years ago). Keeping money abroad is not a good opportunity either cause of the zero or even sometimes negative bank rates/interest. So the only way of saving and making money here is Property.
In general you can earn a good income in Ukraine. A rental investment here can generate an income stream that’s independent of your life and you are not involved in making money and often denominated in another currency, as well. Moreover you can diversify your portfolio and do not put all your eggs in one basket.
Conclusion: you can make the profit in a long term and a short term combining together using the way of the mixing renting and resale. Any project you can purchase via our company, rent it for 1-2 years and then resell it on the peak of the prices. It will be ANYHOW profitable and stable income. Our company will support you on all stages of purchasing reselling of the property and you can be sure that we will always play on your behalf with strong cards based on our experience and great results. We will advice to our partners the best time for reselling the property for maximizing the profit.
26. Why should I not keep my assets in the bank of my country instead of investment into real estate in Ukraine or instead of investing money into property back home?
There are several reasons of it:
— Financial investment into Ukrainian market is much lower than any other country of Europe or the USA
— There is no taxation on the profit during the real estate reselling
— Turnover is quite high and profit is very reasonable
— Low quantity of risks due to being a part of EU system in the future
— no «hidden costs» like high end maintenance of the real estate
— perfect opportunity to make money and to increase your financial background within the next 2-3 years cause you never know when the government will stop this way of making money.
27. In case I want to make site survey and find out more about real estate market of Ukraine, who will pay for my challenging tour to Ukraine?
Our potential partner needs to buy just an air ticket. All other expenses like accommodation and a new German car for site survey will be covered by our company.
28. Why I cannot invest in the capital of Ukraine Kiev and some other bigger cities?
Property in Kiev is 5 times more expensive than in the south and you need to have much more assets to enter the market of Kiev. When you buy the property in Kiev you will face the apartment cost minimum 300K USD of 1000 sq feet, and not too many people can afford it. The main idea of our company is to make the profit and have a good margin and we advice you the best ways of investing money due to our experience — the prices of property in Kiev are too high and it is not good to buy and sell apartments or offices there. There are certain reasons of it: the competition on the market of Kiev, more offers to choose and as a result people in Kiev have more choices and more time to think and more ways to change their mind due to higher and better offer and cheaper price. As a consequence – you as a potential investor needs to invest more money into refurbishing and renovation of the property so it would be more attractive for the potential buyer. So it takes more time to return your money cause of the bigger choice and less profit.
29. Do I need to fly to Ukraine each time I want to purchase or sell property?
No, you do not. You can give our company the power of attorney where you will mention that you give us the full authorization to do everything on your behalf and in your interests. This way you will escape coming to Ukraine often.
30. What is the level of activity in mortgages and loans in Ukraine now?
For the last 5 years government is actively giving out mortgages and loans to the citizens of Ukraine. EU pushes Ukraine government to make mortgages affordable.
31. Are the prices for real estate market is affordable to the buyers?
Absolutely yes and it is quite low right now therefore we have this golden opportunity to buy, renovate and re-sell real estate and make great profit.
32. Where does your company advertise the property for sale?
Our company advertises it in the local newspapers and in the internet. Nowadays having the internet you can sell your real estate wherever you want, from any part of Ukraine. IT technologies has changed the world and nowadays renting and reselling via Internet make sense due to covering by ads all classes of people like middle and low and high class . It is the most advanced way to sell your property quick and without any delays. According to the statistics of Ukraine 80% of the property has been sold via Internet.
33. What if I want to invest into the construction of the 10 level commercial building and build it from the beginning? What is the investment into this project, time frame of the construction, and financial return on it?
Difficult to say cause we need more initial factors and data. but if we are talking about 50000 sq feet building to start with in the downtown of the city and to resell it exactly after the finishing construction — it will take around 3 months for preparing the documents for construction, 6-8 months for construction, 2 months for reselling.
34. Will unstable political situation in Ukraine influence my investment? How can I escape the risks?
The situation in Ukraine is changing every day and only in the better way cause we are going ahead to join the EU and the EU has certain rules and criteria of laws therefore we have high chances to walk towards stability. Moreover you do not buy bonds and shares which you have high chances to lose – you buy SOLID WALLS which will not disappear and will be stolen or you can lose. According to the latest micro- and macro-economical results you can expect the risk of losing partially the value of investment in case you sell it or rent it in local currency but as we have mentioned before 90% of the real estate is sold in USD so inflation has no influence on the property market.
35. What if I am a conservative person and I don’t want to take any risks and ready to get less profit when I invest into property?
Less Profit means investment only in Purchasing and selling the ready made projects and rent them out, without touching the purchasing of land and developing your own projects (getting all permissions and hiring the subcontractors). But if you develop your own construction you will make much more money than just buying and selling property.
36. What if I am a risk taker and I want to make more profit comparing to conservative investor?
The best way is to develop your own construction and sell it after refurbishing cell by cell or rent it out. There are no big risks in construction of your own. The biggest risk is the terms and frames of the construction. For example: you expect to build the commercial building within 6 month but cause of some reasons you will get the construction done in 10 months. This is the only risk that we can have.
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