Alexander McWhorter, the New Jersey native who has served as Citi country officer for Ukraine since 2018, has received an increasing number of calls from companies in recent months, asking about participating in the reconstruction of Ukraine.
"They're looking to understand the market," he said. "They want to understand how they can navigate the local complexities in banking and other areas. They're trying to understand the financing picture - where they can borrow money from. And they're trying to understand the risk and the opportunities."
Citi Ukraine has about 500 clients, including multinational companies, small and medium-sized businesses (SMEs), with a strong presence in the agriculture, metals and mining, tech, pharmaceutical and consumer goods sectors, among others.
Alexander said most US companies in Ukraine likely have an account with Citi but "I don't even think it's a majority of our client count. We have a lot of Ukrainian, European and Asian clients - they're from pretty much everywhere."
He also said interest in the reconstruction is coming from all over.
"We just held a related event in the Nordics where we had a very large attendance. We've organized one for Turkey. We've done one for Japanese clients. We're seeing interest from around the world."
Alexander's 5 Tips for Investing in the Reconstruction
#1 - Join the Reconstruction Early.
“People know there are significant opportunities. But what they may not know is that there are long lead times in all of this. If someone waits until the war is over, then they're going to have six months of strategic discussions and then start to move, they will miss the opportunities. It is much better for people to engage now.
“There will be massive needs, and those people that are able to move quickly will capture outsized returns on this.”
#2 - You Need a Local Presence.
"You need to be here, talking to people, understanding the way of the land. Things can work differently than what you're used to. It can take a while to understand how things work and how to operate in the right way here.
"From a banking perspective, you're going to need some sort of local rep office or something like that set up. But having conversations with us now means that we're ready to go and we can work with you around that process. And, particularly if you're an existing global client, we can do a lot for you, even before you're on the ground."
#3 - Plan for Currency Controls and Regulatory Nuances.
“Just because you bring your money in doesn’t mean you can get it back out. The National Bank of Ukraine has put this in place to protect the currency… there are very nuanced rules that you need to understand around this, and you need to plan accordingly.”
"The rules will change in a post war environment. Hopefully the controls go away, but those are things you need to understand today if you're going to move."
"On the banking side, there is still a material amount of requirements for wet-ink signatures, for apostille documents and other things like that, that we've gotten away from in many other countries. There's been material progress, and it's a lot better than it was, but there are still things that will require that paper touch, that local presence – meetings for verification, and other things of that sort."
#4 - Come Prepared with Plenty of Documents.
“From a banking perspective, you need to expect that it can take a little bit longer and be a bit more complicated than you'd hope."
"We have all the fact sheets and we can explain exactly what's needed. It can be different from what's expected, and there are some nuanced rules. That does mean it may take longer and we may ask for a lot more documents that you'd be used to giving."
"We also may ask different questions than you're used to, because there are certain rules driven by the war – around relationships with Russia for example.
But it's doable."
#5 - Come With Respect for the Sacrifice and Suffering
“For three years, Ukraine and its society have been enduring war, facing serious hardships and challenges, yet the people remain resilient. This deserves the respect of the business that come to Ukraine to participate in the reconstruction."
This is the second in a URN series of articles tapping the knowledge of seasoned investors and professional offering advice for joining the reconstruction of Ukraine. Read the first article here.
