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FAQ: Costs for establishing a software development center in Ukraine

April, 12 2012

These days we receive more and more requests concerning assessing the possibility of establishing in Ukraine of a software development center. In this light we decided to prepare this short FAQ which will be useful for our clients and partners.

Q: How much does it cost to register a company in Ukraine?
A: $500-1000, duration up to 1 month. Monthly administration of the company maximum $100-$200.

Q: Whats the price of renting an office?
A: It depends on the office class. In Kiev on average $50 per 1 sq.m per month for B+, in other regions – $30 per month. Of course, one can find also cheaper alternatives; this all depends on location and level of service.

Q: What type of taxes must be paid?
A: Depends on correct scheme of work approximately 6% of monthly sallaries of the developers and office personnel and around 2% of the office rent. Thatsit. If you pay more, fire your accountant!

Q: What are the costs for legal and accounting services required for local business?
A: Subject to correctly drafted scheme of work you dont need a local lawyer (just your in-house (foreign) lawyer); monthly salary of the accountant to service all the transactions is $1000-2000 per month (for each 20 people of companys personnel).

Q: How to avoid local risks?
A: You should register all the contracts and intellectual property on the name of your foreign company; sign direct contracts with programmers. And remember: you should conduct your commercial activity in accordance with acting laws; this will allow you to avoid paying extra. Surprisingly, this is possible.

Q: What types of specialists are in shortage in Ukraine?
A: Indeed, business-oriented managers who could streamline the work all-in-box are lacking in Ukraine. The value of a good manageris $6.000 and more.

Q: How one can incentivize personnel in Ukraine?
- offer interesting projects (not an outsourcing);
- thoughtful motivation;
- possibility for business travelling;

Q: What type of motivation should not be offered to programmers?
A: Due to low protection of shareholders right, options are not popular among Ukrainian programmers.

Q: Which cities are the best for locating the development center?
A: In the cities with good airport connections and universities: Kiev, Lvov, Odessa, Dnepropetrovsk, Kharkov. By locating development centers in other cities you risk spending too much time for transportation.

Q: Which holidays are the most popular in Ukraine?
A: Normally, companies have days-off for the following holidays:
- New Years Eve and Christmas (31 December 8 January);
- Easter (2 days in April);
- Holidays in May (30 April 4 May);
On all other periods the companies work in a standard more without following any other official holidays.Weekends are Saturday and Sunday.

In case you have any other questions, we will be happy to answer them!


Vitaliy Goncharuk

Linkedin: - Augmented Reality for iPhone, Android, Windows etc. – Oursource Mobile software development services.

What companies provides Artificial Intelligence and Machine Learning services?

March, 27 2012

try AI.Business - custom Artificial Intelligence and Machine Learning services for Agriculture, Construction etc

Why do the customers overpay for software development?

March, 27 2012

In the field of development of iPhone/Android/BB software one could see a lot of customers (investors) recently, who competently understand their main (native) spheres, but not the software.

Moreover, a lot of them have often a negative experience of collaboration with previous software developers. It is to a large degree due to substantial delays of product delivery, as well as a budget surcharge up many times as compared to initially agreed upon to.

Without hitting the high spots of enumerating typical mistakes let us barely recommend you the following strategy of working with software developers on market; based on our experience it will allow you to get needed result within optimal time-frames and with minimal costs:

1. Define the idea of your project in a plain, user-friendly language;

2. Describe with ordinary words a couple of (at least 3) cases and instances of using the application by average user (the more detailed, the better);

3. Order a detailed draft proposal(technical specification), based on items 1 and 2 of the projects, from a specialist or well-known company which you personally trust to. Notify them in advance that youre not going to order the implementation of the project itself (normally such work doesnt cost more than 5% of the REAL budget of the project). Ask also for a preliminary assessment of the budget and time-frames of implementing the project, a description of issues during the latter technical support of the project as well as the approximate qualifying requirements for contractor with respect to developing the software.

4. Make a list of the best-suiting developing companies, available in Internet.

5. Write a letter to these companies, asking to provide you with the confidentiality agreement and draft contract for developing a software;

6. Assess the quality of these documents, meet personally the specialist, inquire feedback in Internet, then send draft proposal(technical specification) for developing a software to the company (-ies) you liked the most (it is recommended to sign first a non-disclosure agreement);

7. Get offers from companies, assess their quality with respect to being specific and meeting the requirements of the draft proposal.

8. Choose the winner based on best price and quality, after that sign a contract with it.

It is no doubt that the list with 8 actions looks extremely burdensome at first, but all you need is just 3-4 days to follow it, while the result (successful project) will be much better than otherwise, without traditional delays and budget surcharge.


Vitaliy Goncharuk,
Managing Partner, The VIactivity LLC
(iPhone/Android software development, production, marketing&PR)

Spin-off: Mobile 3D Augmented Reality Studio(iPhone, Android, iPad 2.0, BB)

June, 1 2011

We have launched(as spin-off) a studio on development solutions in the field of 3D Augmented Reality for advertising, sales and entertainment – AR23D Agency.

List of services:

- Branding of our completed solutions for ads and demonstration of your products on iPhone/Android/iPad with the help of 3D Augmented Reality;

- Development of unique solutions based on our technologies and groundwork in the field of 3D Augmented Reality for promotion of brands, products, services;

- Licensing of 3D Augmented Reality Engine to third developers;- Development of complex 3D models, animation and interactive solutions;

- Consulting in the field of 3D Augmented Reality and technologies of face recognition (faces, objects, images).


Our Articles in Ukraine Business Insight

March, 27 2011

Our 2 Articles in Ukraine Business Insight* about IT Outsourcing business in Ukraine(by CEO Vitaly Goncharuk).

* UBI is the only international English language magazine covering trade and investment with Ukraine.

A presentation with pitch at Techcrunch Moscow!

Janurary, 6 2011

One of projects(co-owned by Vitaliy Goncharuk - Managing Partner at VIactivity/Danex Solutions Inc) was selected for a presentation with pitch at Techcrunch Moscow at the 14th of December 2010: