When Dutch investor Theo Schnitfink made it to Ukraine some 12 years ago to open an office of his software development firm Symphony Solutions, he was amazed with the level of skill of Ukrainian software engineers.
Corruption in the country didn’t scare Schnitfink away, but he admits he was shocked when he faced it himself.
Despite all obstacles, in 12 years of working in Ukraine, Symphony Solutions has grown from just eight employees to over 250 today. And Schnitfink highly recommends Ukraine to foreign investors.
Richard Bell, owner of the consultancy firm Next Step Oekraïne, which has helped around 300 Dutch businesses in Ukraine, says there are reasons why foreign entrepreneurs like it here eventually.
“They are interested in Ukraine as a country where you can find qualified people with an affordable price tag,” Bell told the Kyiv Post.
Indeed, Ukraine has a pool of 200,000 IT specialists and the average hourly rate for senior developers is around $35. In the United States, it starts from around $60, according to Daxx, another Dutch tech company working in Ukraine.
At the same time, Bell adds that the Ukrainian market is by far not the most attractive market for Dutch investors. The lack of rule of law is still the biggest scarecrow.
Through hardships to stars
When Schnitfink opened the headquarters of Symphony Solutions in Amsterdam in 2008, he had already had expansion to Eastern Europe on his mind. And he chose Ukraine to start it off.
“I started looking for… the best location and eyed several countries. Ukraine was probably the most interesting country to go to,” Schnitfink said. Ukraine’s education, its liberal visa policy and cheap labor were favorable, he reckoned.
He chose Lviv, the city of 730,000 people more than 500 kilometers west of Kyiv. The city had good universities, international airport and its people are similar to Western Europeans.
But the last thing that persuaded to come was support from local authorities: Serhiy Kiral former director of foreign economic relations and investments at Lviv City Council and Lviv Mayor Andriy Sadovyi helped file needed documents and open the business.
Theo Schnitfink, the founder of software developer Symphony Solutions, poses for a picture with his employees at the Ukrainian office of the company.
The move wasn’t smooth, however. “I had a fight with tax authorities,” he said. “They were making my life very difficult for the first year, every quarter when I filed taxes.”
According to him, the tax service would make up mistakes in his documentation and ask him to pay a bribe to turn the blind eye. He would always refuse.
Around five-six years ago law enforcement authorities came back to the Ukrainian office to raid it because of alleged tax evasion. Schnitfink calls it “kind of a revenge.”
However, what Schnitfink likes about Ukraine is that it has a huge number of great talents, especially in the tech domain, and high quality of education, even though diplomas can be bought in Ukraine, Schnitfink said.
“Ukraine has a huge potential to grow even more if they focus a lot more on teaching all the children English at school,” said Schnitfink.
Theo Schnitfink, the founder of software development company Symphony Solutions, poses for a picture in the Ukrainian office of his company in Lviv.
Overall, he said Ukraine shows a lot of promise, especially in the IT industry and agriculture.
“I would recommend every investor from outside Ukraine to invest in Ukraine. (But) they have to really prepare and know upfront what they can expect,” said Schnitfink.
As of now, Symphony Solutions has a broad network of offices around the world with the sales offices in the Netherlands, the U.S. and Belgium, as well as delivery centers in Ukraine, North Macedonia and two in Poland.
The company develops software for gambling companies such as Ladbrokes Coral and for wine app Vivino, among others.
Dutch office in Lviv
Schnitfink is proud of the company’s offices, including in Lviv.
“I really tried to bring a more of the Western work culture to Ukraine, and our office looks very Dutch for that reason,” Schnitfink said, describing the company’s office designed to look like the Zaanse Schans Dutch village that has small multicolored buildings.
However, if Schnitfink started his business from scratch now, he wouldn’t open any offices because there’s no need for that now during the pandemic, when many work remotely.
“Even after COVID-19 we will never go back to working full-time in offices,” said Schnitfink.
