Publication date: 15.07.2024
Business registration by foreigners in Ukraine
Registering a business in Ukraine is becoming increasingly popular among foreigners due to the country's favourable geographical location, developed infrastructure and favourable investment climate. The business registration process has its own peculiarities that are important to consider for a successful start of business. In this article, we will take a closer look at all aspects of business registration by foreigners in Ukraine, including the choice of legal form, required documents, registration procedure and tax aspects.
Choosing an organisational and legal form
Before registering a business in Ukraine, foreigners need to decide on the legal form of the company. The most common forms are:
Limited Liability Company (LLC): The most popular form of doing business in Ukraine. Both individuals and legal entities can be founders of an LLC. The liability of shareholders is limited to their contributions to the charter capital.
Private enterprise (PE): The simplest form is a private enterprise that can be established by a single person. The owner is fully liable for the company's obligations with all of his or her property.
Representative office of aforeign company: Foreign companies may open representative offices in Ukraine. Representative offices can be either commercial or non-commercial.
Joint Stock Company (JSC): A form suitable for large companies. The authorised capital is divided into shares that can be freely bought and sold.
Individual entrepreneur (IE): Foreigners can register as individual entrepreneurs to run small businesses. This form provides for a simpler registration and taxation procedure.
Preparation of documents
To register a business as a foreigner in Ukraine, you need to prepare a set of documents. The main documents include:
Application for state registration: A standard application form that is filled out in accordance with the requirements of the law.
Charter of the company: A document that defines the internal structure, management procedure and other important aspects of the company's activities.
Minutes of the constituent assembly (for LLCs and JSCs): A document confirming the decision to establish a company and approve its charter.
Documents confirming the identity of the founders: Copies of the founders' passports or documents confirming the registration of legal entities.
Decision to appoint a director: A document confirming the appointment of a director or other manager of the company.
Certificate of nocriminal record: In some cases, a certificate of no criminal record may be required for the founders.
Documents confirming the legal address of the company: A lease agreement or a document of ownership of the premises.
Receipt of payment of state duty: Confirmation of payment of the company registration fee.
Business registration procedure
The procedure for registering a business in Ukraine consists of several stages:
Preparation of documents: Gathering all the necessary documents for business registration.
Submission ofdocuments to the state registrar: The documents are submitted to the state registrar at the Administrative Services Centre (ASC) or through an online system.
Review ofdocuments: The state registrar checks the submitted documents for compliance with the legal requirements. The review process takes up to 24 hours.
Obtaining a state registration certificate: After the documents are successfully reviewed, the company receives a state registration certificate, which confirms the fact of its establishment.
Registration with the tax authorities: After obtaining the registration certificate, the company is registered with the tax authorities at the place of its legal address.
Opening a bank account: The company opens a bank account for financial transactions.
Tax aspects.
Foreigners registering a business in Ukraine should consider tax aspects. The main taxes paid by businesses include:
Corporateincome tax: The corporate income tax rate for legal entities is 18%. Companies pay the tax based on their net profit.
Value added tax (VAT): The VAT rate is 20%. Businesses engaged in sales of goods and services are registered as VAT payers.
Single tax: Small businesses can opt for a simplified taxation system with a single tax paid instead of corporate income tax and VAT. The single tax rate depends on the amount of income and type of activity.
Personalincome tax (PIT): PIT is paid on income received by individuals, including dividends and salaries. The personal income tax rate is 18%.
Social contributions: Businesses pay social security and pension contributions from their employees' salaries.
Peculiarities of business registration by foreigners
Foreigners wishing to register a business in Ukraine should take into account certain peculiarities:
Obtaining a work permit: Foreign founders who plan to work in Ukraine must obtain a work permit. This permit is issued by the State Employment Service of Ukraine.
Investing in the charter capital: The minimum amount of charter capital for an LLC is UAH 1. However, for certain types of activities, other requirements may be set for the amount of the charter capital.
Legal address requirements: The company must have a legal address in Ukraine. It can be a leased premises or own real estate.
Knowledge of Ukrainian legislation: It is important for foreigners to be familiar with Ukrainian legislation governing business, taxation and labour relations.
Benefits of registering a business in Ukraine
Registering a business in Ukraine has a number of advantages for foreigners:
Favourableinvestment climate: Ukraine actively attracts foreign investment and offers various incentives for investors.
Favourable geographical location: Ukraine's location between Europe and Asia creates favourable conditions for business and logistics.
Developed infrastructure: Ukraine has a well-developed transport, telecommunications and financial infrastructure.
Skilledlabour force: The high level of education and qualifications of the labour force creates favourable conditions for doing business.
Business development opportunities: Ukraine offers various opportunities for business development in various sectors of the economy, including IT, agriculture, engineering and others.
Tips for foreigners planning to register a business in Ukraine
Market research: Before registering a business, it is important to conduct market research to assess potential opportunities and risks.
Legal advice: Consult a qualified lawyer for advice on business registration and taxation in Ukraine.
Business plan: Develop a detailed business plan to help you determine your business development and investment strategy.
Choosing a business location: Choose the best location for your business, taking into account logistics, accessibility and market opportunities.
Understanding the law: Become familiar with Ukrainian legislation governing business, labour and taxation.
Conclusion.
Registering a business in Ukraine is an attractive opportunity for foreigners to develop their business and invest. The registration procedure involves several stages, including choosing a legal form, preparing the necessary documents and submitting them to the state registrar. Foreigners should also take into account tax aspects and specifics of Ukrainian legislation.
Registering a business in Ukraine opens up wide opportunities for foreign entrepreneurs and investors, allowing them to take advantage of the country's favourable investment climate and developed infrastructure. In case of any questions or need for legal assistance, it is recommended to contact qualified lawyers or consulting companies for professional advice and support.
Thus, taking into account all of the above aspects, foreigners wishing to register a business in Ukraine should consider the importance of choosing the right legal form, preparing the necessary documents and complying with all legal requirements. This will ensure a successful start of entrepreneurial activity and facilitate further business development in Ukraine.
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