Sven HennigerTitle: Director of Ukraine ConsultingNationality: GermanTime in Ukraine: Five yearsTips for succeeding in Ukraine: “Invest more time in the beginning, you will be much more successful later.”
In the Hanseatic League that united Northern Europe in the 13th-17th centuries, merchants would shake hands to seal an agreement. Both sides were confident the terms of the deal would be respected, as breaching it meant loss of reputation and the end of the oath-breaker’s career.
This principle, together with strict property rights and business friendly legislation, led to an age of wealth creation that would only be surpassed centuries later under the European Union.
And it is precisely that business ethic and discipline that Ukraine today lacks, argues Sven Henniger, director of Ukraine Consulting. Primarily focused on tax and accounting advisory services, it is part of a global network covering Russia, Belarus and Kazakhstan, and fittingly headquartered in the former Hansa city of Hamburg.
Ukraine Consulting’s main business is guiding companies through the maze of Ukrainian tax and accounting legislation, from “birth to death” as Henniger puts it. Currently, that means operating in a difficult environment leagues away from Western standards.
“Coming from the U.S. they expect to set up a company in a day or a week,” says Henniger, who first came to Ukraine in 2008. “They do not imagine how much paperwork there is.”
As a result, operating in the gray or black economy is much easier for Ukrainian companies, Henniger says, but for long-term trust and development, such shadowy practices must end. The East German native makes sure his Ukrainian employees get into the habit of following strict procedures, even in menial tasks such as drafting letters.
He recounts one example of a talented but inconsistent worker who bristled at Henniger’s stubborn insistence on formatting. But when she moved to a managerial position in a local company, she thanked him for instilling organization in a letter “written just the way I like it,” Henniger says with pride.
Insisting on high and exacting standards, the accountant says, will help Ukraine reach its full potential.
At present, all of Ukraine Consulting’s clients are companies with foreign capital, with around half tracing their origins back to Europe’s German-speaking nations. His firm’s German origins help reassure customers that they are working with someone who sticks to European standards, Henniger admitted, though it would be too much to speak of national solidarity.
“Their corporate language is mostly English,” Henniger says. “These firms now mostly see themselves as global players, not just German companies.”
Originally from Fuerstenberg/Havel, a small town north of Berlin in former East Germany, Henniger is no stranger to the East European region. Before coming to Ukraine in 2008, he worked at Russia Consulting in Moscow. Then, in 2009 to 2010, he was charged with setting up his firm’s Minsk office, going back and forth almost every week.
It was during this period that Henniger saw the workings of the German Business Club in Belarus and decided to set up a similar operation in Kyiv. Officially launched in January 2011, it now counts around 40 members. While not as influential as some of the bigger business associations, Henniger admits, it is a good way for smaller companies that would otherwise get lost among the bigger players to have a voice. “And it’s always pleasant for businesspeople to share their experiences in their native language.”
Despite the tough work, the move to Kyiv was a pleasant one, Henniger says, as Ukraine’s capital is a much greener and more enjoyable city to live in, and one were you are not dependent on travel by car.
“I enjoy the luxury situation of being able to walk to work,” he says.
But while Kyiv does offer the perks of a smaller city, it remains a more challenging business environment, Henniger says, even when compared to Russia. “Russia plays it much more serious,” he says. “Authorities have a better understanding of business issues, and the courts are better able to understand what the business aspects of a case are.”
Kyiv Post editor Jakub Parusinski can be reached at [email protected].
