Ukrainian President Petro Poroshenko has urged the nation's government to switch Kyiv's state finances from raising loans to the attraction of foreign direct investment (FDI).

"My goal as a president, the goal of the government is to move from assistance to cooperation with investors. Ukraine must switch from loans to FDI - foreign direct investment," Interfax news agency quoted Poroshenko as saying on May 25.

According to the head of state, international companies have an opportunity of writing their names in the history of Ukrainian success and simultaneously strengthen their positions in global markets.

After a dramatic drop in 2014-2015 due to a financial and economic crises in Ukraine, net FDI amounted to $2.2bn in 2017, according to official data. FDI stocks have been decreasing as Russian investors have withdrawn much of the assets they previously held. At the same time, Russia was the main investor in Ukraine in 2016-2017 due to the recapitalisation of Ukrainian subsidiaries of Russian banks.

"In addition to political instability, investors have pointed out the underlying inefficiency and corruption in the legal system as one of the main disincentive for investment," Nordea said in its May's review of Ukraine's investment climate. "The complexity of legislation and regulation, poor contract enforcement and poor governance constitute other serious impediments."

At the same time, Ukraine is an attractive investment destination for a number of reasons. The country has a large domestic market, proven agricultural potential, energy and mineral resources and a strategic geographic location, making it a transit hub and gateway to Europe and Eurasia. In addition, the current government seems to have actively taken on reforming the investment climate, Nordea added. 

Ukraine has made significant progress on the investment climate indicators of the World Bank's Doing Business Index. Ukraine ranks 76th (out of 190 economies) in the 2018 Doing Business report, an upgrade of eleven places over 2015, mostly due to improvements in starting a business, registering property and getting electricity.