Challenges for Ukraine's business entering international markets

PPower Agency has repeatedly helped Ukraine's business to enter the markets of Europe and the USA. Today, Ukrainian entrepreneurs seek to diversify their businesses, and Ukrainians who have travelled worldwide are noticing the benefits of Ukrainian services abroad.

For example, our client Imperia Holding has expanded its distribution to Poland and the Balkans over the past year and opened its own stores in Poland and Cyprus.

Key challenges in entering international markets

Legal and tax considerations

The primary challenge is the legal and tax aspects, which vary significantly from country to country. Ukrainian companies must carefully study the local laws, taxation system, and regulations for registering and doing business.

For example, when we were hiring in Germany, we encountered specialists refusing B2B contracts due to the requirement to have at least three different projects and the high tax burden.

Cultural differences and product adaptation also play a key role. Each new market has its own characteristics and consumer habits. Even a promising business can fail if it fails to adapt its product or service to local preferences. Incorrect localisation of branding or a lack of understanding of cultural nuances can damage a company's reputation.

Competition in international markets is much tougher. It is crucial for Ukrainian companies to understand the specifics of the competitive environment and clearly position their products and services. You need to be able to effectively present the unique advantages of your product among competitors.

That is why we always recommend hiring a local specialist who has a good understanding of the market and culture. We have successfully applied this approach for Meest International in Italy.

Logistics and customs procedures pose one of the biggest challenges. Businesses face complex bureaucracy, lengthy customs paperwork, and high transport costs, which can reduce their competitiveness in foreign markets.

Challenges in terms of recruitment

Entering the international market is not limited to market analytics and product adaptation — for sustainable development, a company will have to hire or at least cooperate with foreign specialists. Below are the main challenges and risks that a recruiter may face.

1. Legal and tax considerations

You should consider the various requirements for employee formalities, including contracts, taxes, insurance, and social benefits, as each country has its own labour laws. Licensing and visa restrictions are also an important aspect, especially when a company plans to relocate specialists or open a foreign representative office.

In addition, there are significant differences in approaches to employment: in some countries, short-term contracts are common, while in others, the employer is obliged to immediately sign a full employment contract.

2. Socio-cultural characteristics and recruitment ethics

Cross-cultural challenges relate to differences in mentality, business ethics, and expectations of the work process. Failure to take these features into account can lead to misunderstandings and conflicts within the team. An additional challenge is the language barrier: although English remains the language of international communication, many professionals prefer their native language, forcing companies to adapt HR processes and documentation. The geographical dispersion of the team also has a significant impact: differences in time zones, holiday traditions, and working hours make it difficult to plan meetings, onboarding, and develop corporate culture.

3. Competition in the global talent market

There is a constant "war for talent" in the global talent market, where companies from more developed economies can offer higher salaries and more attractive benefits packages, luring specialists. In addition, if the brand is not yet known in the international market, it will be difficult to attract highly qualified candidates, so you need to work on your employer brand and demonstrate your prospects.

You should also take into account the high costs of recruitment, as fast and efficient recruitment in another country requires HR partners or local recruitment agencies, whose fees can be significant.

4. Costs of adapting recruitment processes

Localisation of HR tools requires translation and adaptation of systems (tests, forms, interview platforms) to the requirements of each market. The recruitment process becomes longer due to time differences and the need for multiple rounds of interviews. Additional analytics also slows down the process — the recruiter needs to understand the expectations of specialists regarding the level of compensation, working conditions, and benefits in each market.

5. Differences in intellectual property and privacy law

Intellectual property is an important challenge, as some countries have stronger legal protection (e.g., patent law in the United States), while others have more difficult conditions for its enforcement. When hiring employees, it is crucial to clearly define the ownership of the rights to the created product. Also, when it comes to working with the personal data of EU candidates, the recruiter must strictly adhere to the GDPR rules for their storage and processing.

6. Probationary period and compensation

When determining salaries, recruiters should take into account the average market ranges in each country to avoid overpaying or losing strong candidates. You should also take into account different approaches to the probationary period — in some countries, it is forbidden to dismiss an employee during this period without substantial compensation, which creates additional risks for the employer. The forms of payment also vary: from an hourly rate with the possibility of overtime to fixed monthly or annual compensation with bonuses, which directly affects the formation of the offer.

7. Changing corporate culture and onboarding

When working with remote teams, special attention should be paid to the onboarding process of newcomers to prevent their isolation and ensure quick adaptation. Without a proper corporate environment, there is a risk of high staff turnover, and different methods of motivating and building teams may not coincide with Ukrainian or generally accepted standards in the company.

Hiring specialists in the international market is a profitable strategy for expanding your business and attracting diverse talent, but it requires serious resources, careful preparation, and adaptation of recruitment processes. Legal nuances can result in heavy fines or even the closure of operations in a particular country. Cross-cultural specifics require a careful approach to interviews, adaptation of offers, and further integration of employees into the team, and high competition for talent increases the costs of finding and retaining candidates.

A balanced approach and advanced planning can significantly reduce risks and complexities while benefiting from a global team capable of operating effectively in different markets.