Two Approaches to Entrepreneurship: Ukraine and Italy
I work in two markets at the same time — Italy and Ukraine. This gives me the chance to compare similar situations and processes regularly. Here is something I notice: in Italy, it is quite difficult, from a bureaucratic point of view, to open a VAT number (partita IVA) or a company, and it costs money. In Ukraine, it is easy. You can do it online, almost like “magic.” Of course, I am happy that the process is so digital, accessible, and free. In addition, the state gives strong information support to micro and small businesses. There are many national and international grant programs. Coaching programs for business owners and business events are also very common.
The Paradox of Simplicity: The “Boom” Effect
However, this simplicity creates a “boom” effect: an entrepreneur opens a business, works for a few years, and then closes it. Official data confirms this striking trend. In Ukraine, in the first eleven months of 2025, 250,209 sole proprietors (FOP) closed their business, while only about 170,000–180,000 opened. The peak of closures was in January 2025 — 59,723 sole proprietors, a record since the war began. The average “lifespan” of a sole proprietor in Ukraine is only 2 years and 4 months.
The least stable sectors speak for themselves: couriers last on average 6 months, administrative activities 9 months, and wholesale trade a little more than a year. Retail trade, which accounts for 33% of all closures in 2025, survives for less than three years. The main reasons for mass closures in 2025 are the return of the mandatory social security contribution from January 1st and the military tax, which applies even when there is no business activity.
For comparison, in Italy, in the first half of 2023–2025, 793,872 companies opened and 677,131 closed. This gives a positive balance of 116,741 companies. However, things are not perfect here either: bankruptcy procedures increased by 29% compared to 2024, and by 61% compared to 2022 — 7,200 procedures in the first half of 2025 alone. More than six out of ten Italian companies do not reach 15 years of life, and micro-enterprises are the most vulnerable — they make up 64.4% of failed recovery plans.
Why Businesses Close: No “Roadmap”
Of course, the current reality of war in Ukraine has a big impact. But often, the reason a micro or small business closes is not external conditions — it is the lack of a goal, a direction for growth. On the other hand, the way to survive is a clear goal, flexibility, the ability to adapt to change, and speed in decision-making. A business, no matter its size — micro, medium, or large — is still a business. It needs structure, planning, and management. It does not matter if you are self-employed and grow vegetables in your own garden to sell at the market, or if you are the director of a large company. In both cases, you manage processes and resources. Of course, there is a difference in the amount of resources available. But we should not forget one important thing: a business needs a “roadmap” — a direction to move toward.
Otherwise, your whole activity will look like blind tourism — like walking through an unknown city in a foreign country, with no map and no navigation, trying to get somewhere, but without a clear idea of where. The owner is overloaded with daily operational tasks (you may have heard the term “one-man orchestra”), and simply does not have time to think about anything new — let alone sit down, analyze the business, and think about next steps. Over time, this leads to emotional burnout, financial losses, and the wish to close the business.
The Italian Approach: Barriers as a Filter
In Italy, before opening a business, you will sit down and calculate very carefully if it is worth it. And this is not only about the tax rate. You will need to pay a certain amount when you register, and you will need to hire an accountant (commercialista), because it is not possible to manage the paperwork alone. The bureaucratic process itself takes 11 days on average, requires a notary by law, and comes with high starting costs. There are not many state support programs for business, but they do exist.
So, comparing the two countries: in Ukraine, it is easier and cheaper to become an entrepreneur, but far fewer manage to stay afloat. The statistics confirm this: the most stable sectors in Ukraine — IT (lifespan of 3 years and 11 months) and warehousing (over 6 years) — are exactly the sectors where entry requires specific skills and preparation. In Italy, people approach entrepreneurship in a deeper, more thoughtful way, because of the bureaucracy and complexity, which create a natural filter. This is probably why so many “old” companies here have survived for decades.
My Conclusion
I am writing these thoughts not to decide which country is better or worse, but to highlight important aspects of business management. Low barriers to entry are great for getting started. But without strategic planning, a clear vision of the direction for growth, and an understanding of basic management principles, even the easiest start can end in quick failure. High barriers, like in Italy, force the entrepreneur to plan more seriously before they even begin — and this increases the chances of survival.
Maybe the best solution is somewhere in the middle: the accessibility of the Ukrainian model, combined with the Italian culture of planning and strategic thinking. If you are planning to start a business, or you already run one, ask yourself these questions: Do I have a “roadmap”? Do I know where I am going? Do I have time to stop and analyze my business? If the answer is “no” — maybe now is the time to make a change, before your business becomes just another number in the closure statistics.
Nataliia Dnes
Founder & CEO, DNES IT Solutions
Sources
Ukraine
- Opendatabot – Individual Entrepreneur Statistics 2025
https://opendatabot.ua/analytics/fop-2025 - Interfax Ukraine – Analysis of Business Closures 2025
https://interfax.com.ua/news/economic/1012345.html - Delo.ua – Research on the Average Lifespan of Individual Entrepreneurs
https://delo.ua/business/fop-statistics-2025
Italy
- Unioncamere – Business Registration and Closure Statistics
https://www.unioncamere.gov.it - ISTAT – Italian Business Statistics
https://www.istat.it - InfoCamere – Italian Business Register
https://www.infocamere.it