Small business recovery: where and in what areas are the most sole proprietorships being opened
22 July 2025 17:53
INFOGRAPHICS
After a challenging start to 2025, the second quarter has become a real new starting point for small businesses in Ukraine: the number of newly registered individual entrepreneurs (IEs) has exceeded the number of closed ones. This indicates a gradual stabilization of the business environment, "Komersant Ukrainian" reports, citing data from YouControl.Market.
The company’s analysts have identified several key trends that make it possible to assess the pace of small business recovery.
Reversal of indicators: from -53 thousand to 34 thousand.
The beginning of the year was extremely difficult: in the first quarter, business closures dominated: for every 57.7 thousand new sole proprietors, there were 110.5 thousand liquidations, which resulted in a negative balance of more than 50 thousand businesses. The reason is not only economic difficulties, but also a technical failure of the registers due to a large-scale cyberattack.
In the second quarter, the situation improved significantly: the number of closures was almost halved(55 thousand), while 89.4 thousand sole proprietorships were opened, which is 55% more than before. The result is a net increase of about 34.4 thousand entrepreneurs.
Sectoral dynamics: development of retail and IT
The sectoral structure shows that more than 80% of new sole proprietors are concentrated in 10 industries. The retail sector was the leader, with 31.4 thousand new sole proprietorships, an increase of 113% compared to the first quarter. Despite the high number of closures(17.1 thousand businesses), the net increase exceeded 14 thousand, the best result among all sectors.
The IT sector took second place: 9.9 thousand new sole proprietorships were opened in this sector (14%), and there was a noticeable net increase (difference with closures).
The third place was taken by the category “Provision of other individual services” with an indicator of 9.6 thousand openings (against 7.6 thousand in the first quarter).
Other active areas include:
- transportation and logistics (6 thousand),
- catering (5.1 thousand),
- wholesale trade (4.5 thousand),
- education (2.9 thousand),
- marketing (2.2 thousand),
- medicine (2 thousand),
- agriculture.
The key point is that in all leading industries, the number of openings exceeds closings. Closures in IT decreased to 9.1 thousand participants, and in other types of activity, the number of closures is also about half as much as at the beginning of the year.
Read also: No other choice: why the number of individual entrepreneurs in Ukraine will increase
Regional leaders: Kyiv, Dnipro, Lviv, Kharkiv
In terms of regions, the most active recovery is taking place in cities with a population of over a million and regional centers. For example, 11,648 sole proprietorships were opened in Kyiv in the second quarter (compared to 8,542 in the first quarter), which demonstrates a leading increase. The capital is followed by the following regions:
- Dnipropetrovska oblast (8,100),
- Lviv region (6,900),
- Odesa region (6,800),
- Kyiv region (6,600),
- Kharkiv region (6,500).
These six regions account for almost half of all new registrations. The top ten also includes Poltava, Vinnytsia, Khmelnytsky, and Volyn regions. All of them demonstrate an active revival, with Poltava region showing 92% of new registrations and Volyn 81%.
Frontline regions: resilience despite risks
The results from Kharkiv, Zaporizhzhia, Sumy, Mykolaiv, and Kherson regions were particularly revealing. For example, Zaporizhzhia closed 1,736 sole proprietorships in the second quarter, but registered 2,316 new ones, a net increase. In the first quarter, 3,500 sole proprietorships were closed in the region, while only 1,500 were opened. Kharkiv region also has a positive balance of more than 2,000 enterprises; Sumy region – 79% of the increase; Kherson and Mykolaiv regions also have positive results. This indicates a recovery in activity even in the face of constant threats.
The role of women in entrepreneurship
Women remain the backbone of new business: 60.7% of the sole proprietorships registered in the second quarter (approximately 54.2 thousand) were started by women. Only 39.3% were started by men. This proportion has been almost stable since the first quarter. As for businesses that ceased operations, the ratio is also close to parity: women account for 52.4% of closed sole proprietorships.
Conclusions and prospects
The second quarter of 2025 proved to be a turning point for small businesses in Ukraine: business activity has resumed, and the positive balance indicates a real recovery. If current trends continue, the country may reach a zero balance of individual entrepreneurs by the end of the year. However, the factors of war, economic instability, and low solvency of the population are still putting pressure on the business environment.
At the same time, it is clear that Ukrainians – and women in particular – are not losing their entrepreneurial initiative. Given the geographical and sectoral diversity, the positive dynamics are a signal of the resilience of the economic fabric, even in times of war. If the business environment continues to be supported by adequate programs, government efforts, and increased security, the country may see a recovery in small business and a steady economic recovery.
This trend could become the foundation for the renewal of small businesses. It is important not to lose momentum and to channel the energy of growth into constructive uses.
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