European Business Association (EBA): PROPOSALS ON SUPPORTING BUSINESS IN FRONTLINE REGION

🇺🇦 New EBA Report: Strengthening Business Resilience in Ukraine’s Frontline Regions

The European Business Association (EBA) has released a comprehensive set of proposals aimed at stabilizing, supporting, and revitalizing the business environment in Ukraine’s frontline regions, which include Kharkiv, Kherson, Zaporizhzhia, Mykolaiv, Dnipropetrovsk, Sumy, Chernihiv, and Odesa.

Why It Matters:

According to the Fourth Rapid Damage and Needs Assessment (RDNA4) conducted by the World Bank, EU, UN, and Ukrainian Government, these regions have suffered:
💥 $176 billion in direct damage (Feb 2022–Dec 2024)
💸 $589 billion in combined economic, social, and infrastructure losses

Major damage includes industrial sites, port infrastructure, and housing, creating significant challenges for economic recovery. With massive internal migration, rising unemployment, and disrupted logistics chains, frontline regions need urgent, tailored support.

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Key EBA Proposals:

🛡 War Risk Insurance:
Amend investment insurance rules to cover projects in frontline territories, enabling both local and foreign investors to safeguard their capital and stimulate new investment.

💰 Tax Relief:

• Reduce the military tax to 1.5% for businesses in frontline zones.

• Cut the unified social contribution (USC) rate to 10% for employers.

• Implement land and real estate tax holidays for at least 18 months to ease the financial burden on businesses rebuilding their operations.

🚛 Logistics & Infrastructure:

• Introduce direct compensation for logistics costs and tax breaks for transport companies.

• Develop state-supported logistics hubs and modernize infrastructure to reduce supply chain bottlenecks.

• Offer rail tariff discounts for goods shipped from frontline regions.

👷 Mobilization & Labor:

• Ensure transparent and predictable mobilization procedures, with increased quotas to reserve conscripted employees (up to 100% for critical enterprises).

• Simplify cross-border travel for entrepreneurs and key personnel.

• Strengthen support for veterans, internally displaced persons (IDPs), and women in the workforce.

💣 Demining & Safety:

• Streamline procedures for companies engaged in humanitarian demining.

• Provide state support for building protective shelters at business sites.

🏦 Financial Support:

• Expand the Affordable Loans 5-7-9% program for large enterprises.

• Launch grant programs targeted at businesses located near the frontline, which are often excluded from international aid.

• Enable preferential loans, loan restructuring, and credit guarantees to boost recovery and investment.

🏗 Special Economic Zones (SEZs):

• Create SEZs with attractive tax incentives, housing programs, and investment protection to retain and attract both the workforce and investors.

• Promote SEZ opportunities at international investment forums.

🎓 Education & Workforce Development:

• Apply flexible safety standards for schools to prevent unnecessary closures.

• Facilitate access to grants and tax incentives for adapting school shelters.

• Develop retraining and upskilling programs, particularly focusing on veterans, women, and displaced persons.

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The Vision:

The EBA underscores that revitalizing Ukraine’s frontline regions requires bold, multi-layered action. By blending financial incentives, tax relief, infrastructure investment, and human capital development, Ukraine can foster a resilient business ecosystem that not only survives but thrives despite ongoing challenges.

These recommendations provide a roadmap for government, donors, banks, and international partners to coordinate efforts and accelerate recovery in Ukraine’s most affected territories.