Doing foreign business in Ukraine can be a challenge, if not a challenge
know all the nuances of legislation in this area. When opening a company in Ukraine, a foreigner should carefully analyze the peculiarities of registration, taxation and legal nuances of doing business in Ukraine.
We have collected some of the most common questions among businessmen from abroad that can be useful to any foreigner who wants to open a company in Ukraine.
Which form to choose: FOP, LLC or a representative office of a legal entity?
Ukrainian legislation allows and provides for virtually any form of doing business. Foreigners and stateless persons enjoy the same rights and freedoms as citizens of Ukraine.
The most common forms of business are:
registration of a sole proprietorship (private entrepreneur),
creation of LLC (limited liability company),
opening a representative office or branch of a foreign company in Ukraine.
To decide which form of business to choose, you should consider the purpose and objectives of starting a business, the prospects and scale of the company, as well as the features of taxation, business registration and any associated risks.
Do you want a simple registration and in the future plan to be the only co-owner free in your activity? Choose the form of your business - private entrepreneur. If these are you
It is more profitable to choose a limited liability company. It is logical to choose a representative office or branch of the company in the case of a company abroad and prospects for business expansion in Ukraine according to the same concept.
Is it possible to do business in Ukraine while physically being abroad?
Not yet, but this opportunity is likely to appear with the introduction of e-residency.
Bill №4240 has now been drafted and put on the parliamentary agenda.
If accepted, foreigners and stateless persons will be able to conduct business with the following features:
opportunity to open bank accounts, enter into civil law agreements, receive administrative services, etc.
registration as a single tax payer of the third group of the simplified taxation system.
free and fast obtaining of the status in the order of submission of the electronic application through the Action portal.
However, doing business by e-residents is provided only for a few activities:
publication of computer games (58.21 NACE);
publication of other software (58.29 NACE);
computer programming (62.01 NACE);
other activities in the field of information technologies and computer systems (62.09 NACE);
data processing, posting of information on web sites and related activities (NACE 63.11).
Is it necessary to have a residence permit in Ukraine to start a business?
No. Regardless of the form of your business, a permanent residence permit in Ukraine is not required for its registration.
On January 30, 2018, the Ministry of Justice provided clarification on the interpretation of the Law "On State Registration of Legal Entities and Individual Entrepreneurs" regarding the requirement to indicate the location. Earlier it was believed that the official address of Ave.
Residence of a person can be registered only if a foreigner receives a certificate of permanent or permanent residence in Ukraine.
From now on, alternative options for confirming the address are allowed: lease agreement, purchase and sale of real estate, documents confirming the ownership of real estate, etc.
However, please note:
To register as a self-employed person, a person must still have a valid visa or a border crossing mark (if a visa-free regime is established). It is important that staying in Ukraine on such grounds will be considered legal only during the validity of the visa, or 90 days in the case of visa-free travel. So if you want to run your business longer, in any case you will need to issue a residence permit in Ukraine to ensure a legal stay in the country.
Please also note that the owner of the company, having registered his business, acquires the official right to obtain a residence permit in Ukraine. On the other hand, such a rule does not apply to self-employed persons.
Is it possible to get a residence permit in Ukraine for investments?
Thus, in fact, the Law of Ukraine “On the Legal Status of Foreigners and Stateless Persons” in Art. 4 and 12 provide for such a possibility. The amount of investment must be at least 100 thousand euros at the official exchange rate set by the National Bank of Ukraine on the date of foreign investment.
How much does it cost to register a foreign business in Ukraine?
Registration of sole proprietorships or limited liability companies is free of charge, upon application to the Ministry of Justice according to the established forms (for sole proprietors, for limited liability companies).
Instead, the registration of a branch or representative office of a foreign company costs the payment of an administrative fee according to the specified details of the State Treasury.
The recently adopted Resolution “On Some Issues of Registration of Representative Offices of Foreign Business Entities in Ukraine” amended to reduce the fee for registration of a representative office of a foreign business entity in Ukraine from USD 2,500 to 1 subsistence level for able-bodied persons. As of 2021, it is 2,270 hryvnias.
An exception is established for the registration of representative offices of companies from a state recognized by the Verkhovna Rada of Ukraine as an aggressor state. The amount of such a fee is 30 subsistence minimums for able-bodied persons (68,100 hryvnias).
An exception is established for the registration of representative offices of companies from a state recognized by the Verkhovna Rada of Ukraine as an aggressor state. The amount of such a fee is 30 subsistence minimums for able-bodied persons (68,100 hryvnias).
Is there a simplified taxation system for foreigners?
Relatively low tax rates for business in Ukraine are one of the biggest advantages for foreigners, which constantly attracts foreigners to open their business in Ukraine.
Thus, foreign companies may be subject to taxation under a special simplified scheme on the same rights as citizens of Ukraine.
Thus, depending on the type of activity, income and number of employees, the special taxation system is divided into 4 groups:
10% of the subsistence minimum - a tax for persons who independently, without the right to hire, are engaged in small business activities.
20% of the minimum wage - a tax for companies in the amount of not more than 10 employees engaged in the provision of services, production, sale of goods, restaurants, etc.
3% of income for VAT payers and 5% of income for non-VAT payers - tax for persons whose annual income does not exceed UAH 5 million per year. (All legal entities in the simplified taxation system automatically fall into the third group of single tax payers).
single tax group, which covers agricultural producers and does not have a fixed tax.
In addition, any company is required to pay SDRs of 22% of the minimum wage.
How to register a foreign employee in your company?
The Labor Code prohibits the employment of foreigners without a permit.
For violation - the employer is fined 20 minimum wages, established at the time of detection of the offense (as of 2021 is 120,000 UAH).
That is why every employee, including director positions, must obtain a work permit.
To do this, you must apply to the employment center with a statement and the necessary list of documents in the manner prescribed by the Resolution of the Cabinet of Ministers 858-2017-n.
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