The dinner brought together a diverse group with backgrounds including finance, legal, architecture, NGOs, real estate, fund regulation, recruitment, rare earths, and oil and gas. Meeting people was the best way to gather some real-life intelligence about Kyiv and the overall idea of investing in Ukraine’s eventual reconstruction.
It included a few surprising nuggets of information, which you can either write off as anecdotal evidence or see as early signs of what’s to come.
The challenges and opportunities of reconstruction
“Ukraine is a tax haven“, one professional advisor explained to me.
Before the war, foreigners could get a permanent residency in Ukraine by purchasing real estate for USD 100,000. They would subsequently pay just 5% tax on income, and there was no requirement to be physically present.
In fact, the deal still exists today. The tax rate has now gone up to 6% to help support the war, but that’s as sweet a deal as you’d be offered in most countries that want to attract new residents.
Opening bank accounts? That’s done one day, I was told.
Immediately before the war, Ukraine saw a significant influx of foreigners, and real estate was on the up. This abruptly came to an end, but I was surprised how many foreign “entrepreneur types” I encountered during my visit. There is clearly a wave of early adopters currently looking at possibilities in Ukraine.
Somewhat counterintuitively, some locals echoed a particular kind of enthusiasm.
It’d be easy to have a negative view of Ukraine’s outlook based on any number of factors. With men up to the age of 60 (!) having to fear the possibility of being sent to war, you could think that anyone who can leave would want to leave.
However, as one successful, enterprising Ukrainian stated:
“Western Europe is socialism. I lived in several countries over there, and I prefer Ukraine. More opportunity, more freedom.“
Ukraine is not for everyone – not now, and not after the shooting ends. However, as a place to live, it’s a much better proposition than I had thought.
It all leads to the question, how many of the Ukrainians who moved abroad because of the war will eventually return?
According to the latest figures from the United Nations High Commissioner for Refugees (UNHCR), almost 7m Ukrainian refugees currently live abroad. The exact numbers of those who stayed in the country and those who fled are difficult to pin down. Ukraine hasn’t conducted a census since 2001, and the country’s statistical service has partially stopped collecting and publishing demographic data because of war-related difficulties.
It’s clear that the answer to this question will have a significant effect on any reconstruction effort.
Experience shows that 30% of refugees return home within the first one or two years of a conflict’s end, and in some instances up to 50% if strong incentives are provided. Both a huge opportunity and a big challenge lie ahead. On the one hand, the Ukrainian economy – post-war – would benefit massively if several million returned to live and work in the country. On the other hand, the returnees would face a significant housing shortage, as 13% of the country’s housing stock reportedly got destroyed.
“When the war ends, you will not be able to buy a bucket of paint anywhere in Europe“, one of my dinner attendees told me.
Indeed, the stock market has already anticipated as much. Over the past few months, investors and analysts have been all over (mostly) European stocks that are seen as benefiting from the eventual reconstruction.
Not that anyone currently knows when that will be – nothing has changed for now, and the fighting continues.
It all begs the question, how can you invest and position yourself for a potential Ukraine reconstruction boom?
Ukrainian stocks have rallied already
Without a Ukrainian stock exchange as such, several Ukrainian companies are listed on the Warsaw Stock Exchange. Their prices have surged significantly of late, confirming my ultra-contrarian thesis from April 2022. The stock of MHP (ISIN US55302T2042, UK:MHPC), which had been featured at the 2024 Weird Shit Investing conference, subsequently doubled (the Australian reader who presented the case at the conference in New York will this year attend the event in Hong Kong).
MHP.
Other special cases are listed in London or elsewhere (see also my February 2025 Weekly Dispatch “Rebuilding Ukraine – 99 stock ideas for a peace deal“).
The other obvious avenue to pursue is to buy Ukrainian real estate. In some ways, Kyiv is reminiscent of Berlin in the early 2000s, with many city-centre industrial estates seemingly waiting for investors to turn them into apartments, lofts, offices, and restaurant spaces. Yields can be in the double-digits, and Ukraine is an unlevered market with a significant shortage of residential space. Getting access to this type of opportunity obviously requires extra work – unless someone sets up a Ukrainian residential real estate fund (should I?).
Alternatively, investing in Ukraine might be as simple as buying the iShares MSCI Poland ETF (ISIN IE00B4M7GH52, NYSE:EPOL). Of all the countries in the region, Poland will probably benefit the most from peace in Ukraine, both economically and politically. Its equity valuations remain 30% below the ten-year average when measured by price/earnings ratios.
As ever, there are options aplenty, if you know where to look.
Nothing beats visiting!
Researching investments in situ is always interesting, and my trip to Kyiv ranks among the most unique ones I’ve ever done.
Reality on the ground can be ever so different from the perception elsewhere.
An image search on a large database like Shutterstock returns Kyiv lying in ruins as the first images that pop up. During my week of roaming the city centre, I did not see a single damaged building. As one friend subsequently told me: “Incredible, watching the news I would have assumed that half of Kyiv lays in ruins.“
About half of the people I told about this trip in advance warned me about the risk of getting dragged into the Ukrainian military and finding myself at the front before I even know it. Locally, everyone reacted with a mixture of utter disbelief and roaring laughter when I told them about this. They could not fathom that anyone would expect the Ukrainian military to forcefully drag off a foreign visitor and send them fighting.
Once I had a bit more clarity about this issue, I visited a “military pub” to have drinks and sausages among military-type people. I chose “Garnison”, the first Ukrainian military pub founded by special forces. Amid military artifacts and photos, I enjoyed dishes made from organic farm products from different regions of Ukraine. I returned to my apartment with a full belly, without having to join the frontlines.
Much of what I experienced in Kyiv was more “normal” than most would have expected.
It’s a country at war, with many people dying every day and other sad developments. Amid business meetings and fancy dinners, this reality hits you when you see a mother saying goodbye to her son at the railway station.
Hopefully, this situation will improve soon, and discussions can focus on reconstruction instead. Just when that is going to be remains the big unknown for now.
Enjoy the photo gallery – it’s seeing Kyiv through a different lens, so to speak.
