Economy Ukrainian companies flock to Dubai as conflict rages on By Sarah Townsend March 6, 2023 Ukrainian Business Council There are 25 percent more Ukrainian businesses in Dubai than there were a year ago, according to Ukrainian Business Council president for Dubai and North Emirates, Olena Shyrokova 25% more Ukrainian businesses in Dubai since last yearUAE seen as starting point for Middle East growthUkraine and UAE started free trade talks in late 2022 The number of Ukrainian businesses setting up in Dubai has risen by around 25 percent in the past year, as companies tap the Middle East to sustain growth while war continues at home. “For business owners setting up in Dubai, it is not about leaving Ukraine,” Olena Shyrokova, president of the Ukrainian Business Council (UBC) in Dubai and Northern Emirates told AGBI. “It is about growing their business overseas so they can continue to pay and support people in Ukraine. This is a new chapter for these companies. “They see the potential in using Dubai, the region’s multinational hub, as a base from which to expand in the Middle East Ukraine imposes 50-year sanctions on Russian banksOne year on, what the war in Ukraine means for the Middle EastUkraine poultry giant signs deal to boost Saudi food security There were an estimated 1,500 Ukrainian businesses operating in Dubai prior to Russia’s invasion of Ukraine last February, according to UBC. That number has grown by at least 25 percent in the past year, based on the council’s communication with Dubai free zones, and the volume of enquiries it has received from Ukrainian businesses. Shyrokova said she expects the number to continue rising in 2023. “We have recorded annual growth in Ukrainian businesses here every year since the council was established in 2016, and we will see more success stories in the years to come,” she said. The majority of Ukrainian businesses in Dubai are in the IT and technology, real estate, finance and legal sectors, Shyrokova added. There is also a growing number of startups across various sectors, as well as agricultural and agritech firms seeking to capitalise on the UAE’s heightened focus on food security. Businesses that have set up in the past year include the UAE’s first Ukrainian restaurant, Yoy, which means “wow” in Ukrainian, BHAG, a provider of artificial intelligence solutions for the manufacturing industry, and Digis, a global software development company specialising in fintech, healthcare and retail. Ukrainian companies that have been in the UAE for many years include MHP, Ukraine’s largest producer and exporter of poultry products, Modern Expo, which fits out shops and warehouses, and VisEngine, a 3D visualisation and animation firm. Shyrokova’s observations are similar to those seen by Pro Partner Group, a company that helps companies set up in Dubai. Its commercial director James Swallow said it traditionally did not see much business from the country. However, that is likely to change as 70 percent of its Ukraine client leads have been in the last year and a half. While the war in Ukraine has exacerbated issues in some of the most economically fragile Mena countries, such as Egypt and Lebanon, others including oil producers such as the UAE and Saudi Arabia, have prospered. The IMF forecasts GCC growth of 3.6 percent in 2023, compared to a global average of 2.7 percent, largely due to the higher global oil prices caused by sanctions on Russian oil exports. The UAE has also benefited from a “quicker than average post-Covid recovery, Expo 2020 Dubai, and the influx of a skilled Eastern European workforce from Russia and Ukraine”, Sorana Parvulescu, Europe, Middle East and Africa partner at consultancy Control Risks, said last week, as the world reflected on the one-year anniversary of the conflict. Trade between Ukraine and the UAE rose steeply in the year before the conflict as the two countries deepened diplomatic ties. Non-oil bilateral trade rose 28.4 percent year-on-year to just over $1 billion in 2021 – an increase of 12.2 percent from 2019, according to UAE state news agency Wam. Ukrainian president Volodymyr Zelensky visited the Emirates in February 2021 and more than $3 billion in trade and investment pledges were made during the trip. The two countries began negotiations in December for a free trade agreement to further boost bilateral trade and revive the economy of Ukraine, one of the Middle East’s top sources of grain. Shyrokova added that Ukrainian businesses in Dubai are making efforts to hire Ukrainian nationals where possible, to support their community overseas. The number of Ukrainian citizens in the UAE has doubled since before the war, to around 30,000, she added. Ukrainian businesses are also actively avoiding any connection with Russian companies and citizens, “to protect our interests”, Shyrokova said. Industry experts told AGBI in January there had also been a surge in Russians looking to set up business in the UAE.