Small business in Ukraine: growth records give way to wave of closures

Since the start of the full-scale war in Ukraine, 763,759 new sole proprietors have been registered. However, during the same period, 684,995 entrepreneurs closed their businesses.

The highest number of new registrations was recorded in Kyiv (108,536), as well as in Dnipropetrovsk (68,377) and Lviv (60,009) oblasts. Meanwhile, the number of new enterprises in frontline and partially occupied regions (Luhansk, Kherson and Donetsk oblasts) has decreased significantly.

Which sectors are entrepreneurs choosing?

The most popular industries among new businesses have become:

• Retail trade – 28%
• IT sector – 9%
• Wholesale trade – 7%

Turning point: more closures than openings

Despite the war, Ukrainian small businesses showed record growth rates. Until the end of 2024, more new sole proprietors were opened monthly than closed. However, the situation changed by the beginning of 2025.

January 2025 became an anti-record month: within a few weeks after a prolonged suspension of registries in the country, 61,455 sole proprietors were closed. For comparison, there were only 21,358 new registrations.

Experts link the sharp rise in closures to economic difficulties, tax pressure and uncertainty about the future. Small business in Ukraine is facing serious challenges, and the further dynamics of its development will depend on the economic and military situation in the country.