Sergey Kartashov: Ukraine has the potential to be an international IT center


Sergey Kartashov, CEO of the asset management company Generation Partners LTD, assessed the situation in Ukraine’s IT sector and made an optimistic forecast about the country’s chances to become an international IT development center.

Generation Partners is based in Cyprus. It is exploring IT startups’ potential in order to attract investment. Recently, more and more Ukrainian teams start to enter the company’s orbit. Many of them work in Cyprus. Sergey Kartashov told us why Ukrainian companies decide to relocate and how investors evaluate the prospects for the IT development in Ukraine.


Human resource

According to the CEO of Generation Partners, the main advantage of Ukraine over other countries in the IT market is, first of all, human potential. Ukrainian universities annually graduate about 15,000 IT students, who are highly valued in the world due to their productivity, attentiveness, and professionalism. There are two factors that contribute to this result: a high-quality secondary education and a historically strong STEM school. Together with the relatively low cost of working time for Ukrainians, compared with specialists from other countries (USA, UK, South America, Western Europe), the work of Ukrainian developers is among the best when it comes to value for money.

“Every tenth graduate of secondary and higher educational institutions of Ukraine is an IT specialist. Ukrainian schools fight for the right to be called the best, that is why they have to constantly improve their services in order to keep up the level. You can see the results of this constructive competition with the naked eye – Ukrainian programmers are becoming widely in demand in the world,” said Sergey Kartashov.

“Ukrainian developers are ready to work not only in international companies. Many programmers create their own business. It is worth mentioning Odessa-based startup Kwambio that is engaged in innovation in 3D printing and that consult Tesla and NASA on these issues. This year, the company plans to present an innovative project for the whole world – 3D printing of human bones, which can be used as implants. It is also worth noting the unique products of the Ukrainian IT company RefaceAI – the Doublicat app for replacing faces in GIF images and Reflect app for replacing faces in photos. A year ago, even Elon Musk noted the success of the latter one,” said Sergey Kartashov.

Apart from that, a dozen of Ukrainian IT companies annually get into the top 100 best IT outsourcers lists.

“According to the  IAOP rating, the number of such companies is constantly growing, and that, in its turn, indicates the positive dynamics of the IT market development in Ukraine compared to other countries. Nevertheless, in the IT world, Ukraine remains a country whose potential has not yet been fully revealed,” said Generation Partners CEO.


Unlike the powerful human resource and strong educational traditions, Ukraine has not yet formed legislation that would create a favourable climate for the IT industry development. That is why many Ukrainian companies today choose to relocate to more comfortable regions for doing business. One of them is Cyprus with its IP-Box regime. It allows you to pay only part of the taxes on intellectual property, while maintaining the profitability of companies at a high level, even if the entire development team decides to relocate.

“Though, you can see some positive trends also in Ukraine today,” noted Sergey Kartashov, CEO of Generation Partners. “Earlier this year, the Ministry of Digital Transformation of Ukraine has announced the allocation of quotas for simplified employment of foreign specialists in IT companies. Immediately after the end of restrictions due to the coronavirus pandemic, 5,000 foreign specialists will be able to obtain a residence permit in Ukraine, and the companies that hire them will no longer need to undergo a huge number of bureaucratic procedures every year.”

This change is related to managers and well-experienced programmers that also have managing experience. They will be able to fill the shortage of senior level specialists and raise the level of young Ukrainian developers.

Future expectations

Ukraine is also thinking about introducing its own IP-Box regime. A corresponding proposal was received at the beginning of 2020 from the Ministry of Digital Transformation. Such an approach will allow attracting specialists to stay in the country and fully unleash the intellectual potential. Moreover, following the example of Cyprus, IP-Box can attract new companies and investments to Ukraine.

“Over time, IP Box allowed Cyprus to become a proper center for IT research and attract a huge number of companies. And that, in its turn, boosted the economy and helped create its own IT industry on the island. More than 10 years of banking management and five years of IT experience allow me to make a certain prediction. I believe, if such financial benefits are introduced in Ukraine, together with its huge human potential, the country has all the chances to become a new world-class IT hub,” Sergey Kartashov summarized.

According to the CEO of Generation Partners, in the future everything will depend on the abilities of Ukrainian IT specialists and how they will take advantage of the opened opportunities. In one of the most optimistic scenarios, once the IP-Box is introduced to Ukraine, there will appear full-fledged IT parks like the ones that are already successfully operating in other European countries. Thus, they will be able to attract major investors to the country. All these factors will transform Ukraine into a powerful IT place and significantly strengthen the country’s economy. Success in this process will depend only on the time and the efforts that the government will make to advance the reforms.


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