You may think you haven’t heard of Lviv but as a city with many names, chances are high you did. Check out what "founding" means in this Ukrainian city!
Have you ever heard of Lviv? No? Are you sure?
Lviv is a city of many names. For Austrians, it is known as Lemberg, after the city’s time as capital of Habsburg Galicia. For a Pole, looking back at his country’s long-held sovereignty, it would be Lwow. In Yiddish dialect, the name of the city sounds like Lemberik, and Leopol to the old-fashioned Frenchman. Whatever you call it, most likely, it’s simply not possible to encompass all the truly amazing things this city has seen in its illustrious past or offers at present. With its independent coffee houses and traditional chocolatiers, Lviv looks, smells, and tastes like the best of Europe. In fact, the names reflect the city’s mysterious past, adventurous present and bright future. Moreover, the city of lions, today remains one of the most charming, elegant and mysterious beauties of Eastern Europe. It is the only Ukrainian “Ensemble of the Historic Centre” included in the UNESCO World Heritage List.
The city is known as a center of art, literature, music and theater. Nowadays, the indisputable pieces of evidence of the city cultural richness are the big number of theaters, concert halls, creative units and also IT centers. Owing to an enriched cultural programme, developed infrastructure (now Lviv has more than 8.000 hotel rooms, more than 700 caterings, free Wi-Fi zones in the center of the city, and a good connection to many countries of the world, thanks to flights of Lufthansa, Austrian Airlines, LOT, CarpatAir (and low-cost-carrier Wizzair) Lviv has the biggest potential in Ukraine to grow and develop.
Lviv is the city that inspires to create, motivates to make something new and original, excites with a range of things to offer, impresses with its mysterious past, entertains with animated streets and places to eat and relax, charges with its positive energy, but cannot leave you indifferent. Don’t believe me? Read on!
GPS Direction: Lviv
Now let’s come to why you should start your business in Lviv and what you should keep in mind when moving here.
Why Lviv should be your startup destination?
- Lower living costs compared with the other European cities and Kyiv.
- The high quality of human capital: 2 high-class Universities yearly graduate thousands of qualified professionals.
- Cultural proximity: Lviv was a part of Poland for a long time, and has become culturally closer to Europe, compared to other Ukrainian cities.
- Certified professionals: Ukraine was third in the Top 50 Countries with the most certified IT professionals, just behind the US and India. This means that in Europe, Ukraine is the winner of the prize. In the “Most Master-Level Certified Nation” Ukraine came second to the US. 56 talented Ukrainians showed the best results in the individual standings in different programming languages, web frameworks, databases and graphics.
- Ukrainian IT-specialists achieved great results at Bench Games Leaderboard 2013 – the international online competition that aims to identify the skills and knowledge of professionals within the IT industry.
What startup founders should take into account:
- Legislation of small business and entrepreneurship still requires better development; however you can easily find the help of well-educated and experienced lawyers.
- High taxes, general VAT rate 20%, reduced VAT rate 7% on pharmaceutical supplies, but Ukraine plans to cut VAT 17% in 2015.
- Insufficient state financial, credit and property support of small businesses.
- Slightly not the perfect system of accounting and statistical reporting of small businesses.
- Taking into the consideration the level of bureaucracy, starting your business here might take you prodigious efforts or leave you with bittersweet memories.
Lviv as well as Ukraine is still developing and growing in all the fields. That is pretty young, but promising space. And that is why it is a great opportunity to start a new business here.
First Stop: Discover Lviv’s Startup Community
What are the main things you need to consider thinking of your startup? First and foremost, it is the in’s and out’s of success. In other words, you should be aware of the entrepreneurial culture of the city: where creative people meet, where to find relevant information and the last, but not the least, how big the startup scene is.
Lviv’s startup community is up-and-coming, inviting and open for innovation. There are some active Facebook groups, where meetings are organized on a regular and casual basis. The best way to become the part of the community to view it from the inside by visiting some meetings, but to start with checking the websites below and make your choice:
- Ukrainian Startups – a new movement which allows startups to get recognition and inform themselves about events and other activities. Also, check out their Facebook group and find info about current, ongoing and brand new projects.
- Startupdepot Lviv – check and register for the next meeting from Startupdepot.
- IT Cluster Lviv – this is the space for communication of the IT companies and developers. You will have the opportunity to talk with the leading international and local IT companies, find out the most interesting news in the field of IT and not less interesting newfangled projects.
Regular events and meetups:
- Ukrainian Startups – check their Facebook group for upcoming meetups.
- Lviv Startup Club organizes startup conferences and events on a regular base, keep up-to-date here (websites are in Ukrainian only).
- Drupal Cafe Lviv is a place worth visiting, monthly Drupal meetups are held there.
Yearly major events, festivals, conferences:
- IT-Arena Lviv – is one of the biggest and the most expected IT events in Ukraine. The next conference will be on 2-4 October 2015 in Lviv.
- GameDev Conference – is the biggest yearly conference for game developers in western Ukraine. In 2015, more than 450 members took a part in it.
- Lviv Outsourcing Forum – was held in March 2015, over 250 participants took part. It serves as a platform to share experience and discuss pressing issues.
- FOSS Lviv – is a conference on free and open source software in Lviv and is targeted on software in education, science, business and home.
- GDG DevFest – was held in Lviv last October and gathered people for talks, workshops and a hackathon.
- JDay – is a Java conference which will be held on September 19th in Lviv. Participants can expect a full day of inspiring talks by different speakers.
If you are looking for job and co-founder opportunities in Ukrainian startups, check out jobs on StartUs and stay tuned for the upcoming startup networking events in Lviv. Sounds interesting, right?
Second Stop: Park At A Coworking Space
There are a lot of possibilities to book a working space in Lviv and, what is more important, it is also not very expensive compared to Kyiv and other countries.
- You can find a comfortable separate space or workplace for you and your company on the first floor of the residential building with the separate entrance into the city center or not far from it.
- You can book an office in a professional office building. You can find some A, B or C-Class buildings in Lviv.
- As a first step, you can also try to work in a cafe. There a lot of them in Lviv and all have a free WiFi connection. You just have to ask the waiter for the password if you are visiting it for the first time and, for example, order a coffee (1 cup will cost about 1 USD).
- If you need to find like-minded people and new connections in Lviv, then check our coworking spaces. IT will cost you 50-60 USD for one person per month. However, there are also the possibilities to book it for one day or one week.
Coworking Spaces in Lviv:
- Startup Depot coworking with the focus on support and development of IT startups. Open space – a comfortable place to work with good internet connection, interesting neighbors nearby. If you are tired of working in the office, at home or in cafes of the city – you are welcome to work there.
- coMMuna – is a place to realize your potential, perfectly organized for work, study and rest. They have loyalty system for their customers: card “resident”. For freelancers, they offer a monthly subscription: card “coworking”.
- Betaplace is a comfortable space and office infrastructure that helps to be focused on reaching goals. The community of creative professionals helps to find new connections, share ideas and collaborate. Moreover, Betaplace has a fablab facility, where you can rapidly prototype and manufacture any kind of device.
- GODO Coworking – If you have your own business and love it, then you can join GoDo. The space is created for generative work, you can find like-minded colleagues or partners for a new project. The main ideas of Godo are friendship and openness, ambition and good results.
- Pawillion Coworking is a space for collaboration. It aims to become a focus point for entrepreneurship and innovation in Lviv. Pawillion creates an enabling environment for entrepreneurship, creativity, and innovation.
Third Stop: Tank Your Finances
At first sight, seems that it will be a big problem to find investors in Ukraine. Obviously, it is an uphill struggle, but just like everywhere, isn’t it? Nevertheless, Ukraine becomes a more interesting foreign market for Western Europe and international corporations. We checked it for you and found out a lot of attractive possibilities.
- Segments Accelerator just started to operate in Ukraine. The team is providing 360-degree support to startups like direct investments and a full range of growth-related services.
- Ok Factory is one of the first business accelerators in Lviv. It is an entrepreneurial ecosystem.
- Startup Depot is a place to work, create and build fantastic projects. It is a creative lab for developers, companies, designers, and entrepreneurs. People create, build and get feedback on their projects.
- IHub just opened in Lviv. That is the common project of Lviv City Council, Foundation Seed Forum Norway and Seed Forum Ukraine.
- Incubator Centre by “LP University” was founded 20 years ago. Its mission is to involve students in innovation and entrepreneurship and to create new working places. Here you can find support for SMEs, a lot of seminars, training programs, literature and consulting in different questions regarding IT and entrepreneurship.
Grants and Subventions:
- Microsoft Seed Fund – The Foundation works with the IT-companies, which are creating software, internet services and solutions for working in “the cloud.”
- Global Technology Foundation. The fund focuses on IT-projects, which are aimed to solve problems in the sphere of state (public) services, medicine, communication, banking and financial developments, cloud applications, games, and media.
- TechPeaks – The fund is making a bet on people, not on a project or idea. The program can even get there alone without a concrete action plan for the future.
Crowd Investing Platforms:
- Biggggidea (Ukrainian only) – you can present your idea and spot starting capital for social businesses, money to develop the invention, filming, and others.
- Kickstart (Ukrainian only) – helps people, who are going to present the project on a crowd investing platform. If you have a great idea they will help you to implement it in life. Start a successful campaign – not an easy task. This requires an effective strategy and a good preparation. They will help to develop a strategy for your crowdfunding campaign to create an attractive page and video to Kickstarter and be sure that your project will go smoothly from start to finish.
- Ideax Nescafe (Ukrainian only) – here you can present your project, people will vote for your project. And if you win, you will get the money to realize your idea.
In Ukraine, angel investors are represented at the level of networks and at the level of individual business angels. Here are some Ukrainian and international investors:
- UAngel is a Ukrainian business angels network founded in 2014.
- UAban Association of private investors, part of EBAN, European business angels network.
Ukraine is one of the best mid and long-term investment opportunities in the world. To get a deeper insight on the investment opportunities in Ukraine, the business climate, and the current business projects, do not hesitate to contact venture capital investors:
- Iventure Ukraine’s largest investment portal of private investments and venture capital.
- Techinvest is specializing in investing in the early stages of building.
Fourth Stop: Seek Further Advice
There are no specific requirements for foreigners wishing to establish a business in Ukraine, except one: a person shall have a Ukrainian Tax ID Number to make any bank or notary actions. Investors, whether Ukrainian or foreign, benefit from equal legal treatment and have the same right to establish business operations in Ukraine by incorporating separate legal entities. The procedure requires the fulfillment of certain legal formalities (registration in The Single State Register of Legal entities and individual entrepreneurs).
The Ukrainian legislation allows for and defines six organizational – legal forms of business entity:
- Individual entrepreneur
- Private unitary enterprise
- Additional-liability company
- Limited-liability company
- Public joint-stock company
- Private joint-stock company
There are 2 general types of taxes for enterprises: income (net profit) tax, which is 18% in 2015 and single tax (4% of gross profit). There are some limitations to be a single tax payer (for small and medium enterprises). Additionally, it is possible to get VAT tax. The Personal Income Tax Rate in Ukraine stands at 15 percent (20 percent for income exceeding 12 180 UAH). The tax rate on real estate depends on types of property and its location.
For further advice reach out to Legal Aid which will provide you with the necessary information and services.
Lviv is the city of motion and development. Every day, every hour, every second something is happening. Lviv it is the biggest inspiration. It is the best place to reveal your potential, become more creative personality without being locked only in the realm of Ukrainian mentality and outlook because the mind of the city underwent profound changes during the centuries and shaped its own character and soul and still expands its horizons.
You have a chance to become a part of it. We can become bigger than we have been: more successful, greater in spirit and larger in outlook. I do believe we will. And what about you? Are you ready for Lviv to be your destination?
Co-author: Sofi Ivanochko, Anna Stukanova
The guides are like startup communities – they constantly change and grow. Make sure to check for updates and if you have something to add to one of them or want to publish one for your city, get in touch right away! And don’t forget to enrich the startup ecosystem by creating your company profile at StartUs!
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I've published this guide originally on StartuS.