Freedom of establishment and freedom to provide services: major challenges for ukrainian businesses

The third chapter of negotiations, “Freedom of Establishment and Provision of Services,” is part of the second cluster of the European acquis, which lays the foundations for the full and secure functioning of the EU Internal Market. As part of the legislative harmonisation process, Ukraine must significantly change its approaches to regulating business and services.

How we investigated regulatory gaps

The Centre for Economic Strategy (CES) conducted a series of in-depth interviews with Ukrainian entrepreneurs, experts and practising lawyers. The study focused on:

• horizontal legislation – rules governing general conditions for market access and doing business;
• vertical legislation – rules governing specific sectors (media services, medical services, distribution of goods).

This provided a better understanding of how structural weaknesses in sectoral regulations reveal general systemic problems and prevent the effective implementation of the requirements of the third negotiation chapter.

Cross-cutting themes: cybersecurity and public-private partnerships

We also paid particular attention to cross-cutting themes, notably public-private partnerships and cybersecurity, which directly affect Ukraine’s ability to integrate into the EU internal market.

Key challenges for Ukraine

The analysis showed that the main challenges lie not in the absence of individual laws, but in fundamental differences in regulatory models:

• Ukrainian legislation remains largely declarative and focuses on ‘entry’ controls rather than continuous monitoring of compliance.
• There is no clear implementation of the principle of freedom to provide services and freedom of enterprise.
• Administrative barriers and discriminatory requirements for foreign companies are still present.
• Institutional fragmentation of regulation leads to duplication of functions, slows down decision-making and reduces the effectiveness of control.
• Low transparency of access to the market and public services limits opportunities for business.

Read more in the policy paper.

This publication was prepared with the support of the European Union and the International Renaissance Foundation within the framework of the joint initiative “European Renaissance of Ukraine.” The content represents the views of the authors and does not necessarily reflect the views of the European Union or the International Renaissance Foundation.