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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Doing business like good neighbors

Witold ZAPEDOWSKI: Ukrainian firms are interested in the Western market
20 January, 2011 - 00:00

Sad but true: Ukraine doesn’t offer an attractive business environment these days. Local businessmen are hard put to come to terms with the bureaucrats and rampant corruption, which means that their foreign counterparts will keep their distance, although there are exceptions to this rule; there are businessmen who are not scared off by such risks, and are doing business effectively in Ukraine. The following is an exclusive interview with Witold ZAPEDOWSKI, a noted Polish businessman, expert on investments, auditing, finance, and taxes. He owns CeDePe, with offices in Warsaw and Lodz. Four years ago he set up an office in Lviv. He is glad he did so and says Ukrainian businessmen would be better off collaborating with their Polish counterparts.

Mr. Zapedowski, you are a noted businessman. How did you reach this status?

“I was born to an ordinary family. I had no father and my mother was a schoolteacher. Eventually I started earning my living by doing jobs abroad. I worked as a schoolteacher and accountant. After I received my M.A. as a certified accountant and auditor, I could never imagine that this would be my lifelong occupation. In 1993, I dared start my own small business that was destined to grow and become one of Poland’s important and profitable ones.”

Do you often visit Ukraine? What is particularly attractive in our country?

“I visit your country every month, for a couple of days. I love Ukraine. I have visited Kyiv, Kharkiv, Volyn, Rivne, but I’m especially fond of Lviv. I think this is one of the most beautiful Ukrainian cities — not only because I have my office there, or that this city is close to Poland. I love the populace. These people are friendly, open-hearted. The first time I visited I wasn’t sure about your attitude toward Poles. Now I know that Ukrainians are friends of Poland.

“What impresses me is the striking difference between your rich and poor regions. Your local elite often fails to comprehend the local social problems; that the populace can’t possibly survive, earning between 800 and 1,000 hryvnias [a month – Ed.], having to cope with the existing market prices. Everyone keeps referring to the economic crisis, but this crisis is the result of human deeds.

“It is also true that there seems no evidence of this crisis on Lviv’s streets. The populace shows no signs of pessimism — probably because there are many tourists or because of the city’s aura.”

You are versed in business, the way it’s done in Poland. How is it different in Ukraine?

“There are some differences, ranging from the relationships between business and non-business people, tax authorities, and so on. In Ukraine, people in business and other citizens tend to conceal their revenues. In Poland, the situation is the exact opposite. The absence of corruption and rule of law can only stimulate business. There are many simplified procedures to help one start in business in a legally transparent way. In Ukraine, the situation is different; you’re hard put to start a business, and if and when you do, you must travel a winding and thorny path. Doing business in Poland is easier, considering that the problems Ukraine is experiencing existed — and were overcome — in Poland in the 1990s. Ukraine needs changes to its social mentality, a different class of politicians, a different kind of society where the need for doing business and the presence of innovative business talents will be appreciated; this is something every country needs in order to develop economically as well as socially.”

Would you please explain the advantages of doing business in Poland and other EU countries?

“The Polish tax authorities are showing a more stable performance. Red tape is smaller in the EU countries than in Ukraine — I mean books, accounting reports. These countries have online accounting, without abrupt, ungrounded changes to the tax laws. It is also true that doing business in Poland has become harder of late because of the market being saturated with all kinds of businesses, so that innovative ideas and solutions appear the only way out of this situation. The biggest advantage is the fact that the EU is doing its best to support small and medium businesses, financing innovative projects… Another advantage is that the Polish market is part of the EU market, so one can expand throughout Europe and across the ocean.”

Would you please offer your professional recommendations for people who wish to start in business, focusing on the Polish market?

“First they should deal with the lack of trust. In Ukraine, various firms often distrust each other and this hinders their collaboration. The situation in the EU countries is entirely different. What you need is transparent investments. There is also the difference between the tax authorities in Poland and Ukraine. As an expert in this field, I can see that Poland is gradually becoming another EU member country, and the point isn’t WTO membership but rather integration, clear laws, a transparent European market. Any Polish supermarket will offer you inexpensive Portuguese wines, Spanish watermelons, French cheeses…

“Of course, what every businessman faces is competition in the first place, so one ought to have good proposals to endure this pressure, but I personally encourage colleagues to expand their business endeavors in the West. Market analysis shows that the West is good for Ukrainian investments. By making investments in Poland you make investments in Europe, which is profitable and prestigious. Poles make good businessmen and Poland offers good conditions in which to implement Ukrainian business ideas.”

Would you please share your ideas about how to do business in the EU?

“Ukrainian business people should bear in mind the transparency of the European customs and taxation systems; that doing business here is strictly in keeping with the law. The competition, however severe, must not cross the line. For example, entering the European market with ‘shadow capital’ is quite a problem and trying to gyp the revenue watchdogs presents an even bigger problem. Also, you have to be an expert in the field; you have to be versed in legislation and you have to know foreign languages. People at my company have a fluent command of Polish, English, Russian, and Ukrainian.”

Polish legislation allows to transfer one percent of your annual revenues to social projects or NGOs. How would you explain such noncommercial support? How do you feel about such projects as a professional businessman?

“Charity is part and parcel of good business. It is like first aid to the people in need. This is precisely how we are made aware of the strength and value of our money being put to transparent, fair use. This kind of support proves rather effective, considering that the state doesn’t have to waste time and money supporting such projects. We know whom we support and why. Of course, confidence probably comes first here, although everything can be easily verified. In Poland you often read ads and see commercials about NGOs that need help. Most of them are meant to help ailing children and people in need. I have often helped them and will keep doing so.”

By Yaroslav KIT
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