Start Business in Ukraine. Key Points
Every year Ukraine becomes more and more of an attractive market for foreign investments. Even currently Ukraine is included into TOP-100 countries according to auspiciousness criteria of doing business. In addition, the government is aiming on improving the conditions of doing business, and legal changes which simplify registration of business in Ukraine have come into force.
There are a few options for investors to start business on Ukrainian market: e.g., to buy (participation) shares in existing company, merge two or several companies into a new one or create a new company. Besides, foreign legal entity can open a representative office in Ukraine for performing marketing, commercial and other auxiliary functions on behalf of a foreign legal entity.
If you have decided to start a new company, we suggest looking at the key points which are to be considered:
+ Organizational legal form. Initially, you need to decide on organizational legal form. The most widespread forms of doing business in Ukraine are Joint Stock Companies and Limited Liability Companies. The biggest advantage of Limited Liability Companies in comparison to Joint Stock Companies is that the procedure of creation and exploitation of Limited Liability Companies is less burdening and does not take much time. The absence of shares in Limited Liability Companies makes this form of legal entity more mobile and flexible. The founder can be an individual or a legal entity as well as a group of founders, there are no limitations to the maximum number of founders. The law on Limited Liability Companies which came into force on June 17, 2018, changed the regulation of Limited Liability Companies’ activity in Ukraine drastically and opened new opportunities for business, giving companies freedom of actions in setting the rules of managing such companies.
Besides, there are other organizational legal forms of companies, e.g., Companies with additional liability, limited partnerships, private enterprises, cooperatives, etc. However, they are usually not used very often.
+ The permission to start a company. Consent of the authority on founding and managing a company is not needed. Although, for some types of entrepreneurial activity receiving license/permission is required.
+ Information from the founder and documents. For state registration, you need to prepare resolution on creating a company, charter (or alternatively – resolution on setting a model charter, which is approved by the Cabinet of Ministers of Ukraine), power of attorney for the representative party (if necessary), registration letter of the particular form.
For application, you would need to indicate the address of the office where the company will be located, description of key types of entrepreneurial activity (according to state classification of economic activities), bank details of the executive body.
Please take into consideration that at newly founded companies, only citizens of Ukraine can be appointed as executive body (director/general director/executive director), since working permission which is required for a foreign citizen is impossible to obtain before company registration.
Also, be ready to provide information about the company’s beneficial owners: full name, birth date, tax number, passport details, country of citizenship and residence address.
Additionally, documents from the founder are required: for a legal entity – extract from the trade register, for an individual – notarized copy of passport and tax number issued in Ukraine. All the documents issued outside of Ukraine need to be legalized (apostille and official translation into Ukrainian with notarized certification).
Also, at the discretion of the founder, while registering the company, it is possible to submit an application letter for simplified taxation system and/or an application letter for registration as a VAT payer.
It should be noted that the requirement on registration fee payment for conducting state registration of a legal entity or an individual entrepreneur has been called off.
An additional step to simplify doing business in Ukraine, the Ukrainian government has set up online-service for state registration of Limited Liability Companies with model charter.
+ Terms. The registration process completion depends on a big number of factors, such as corporate and tax structure, founders and beneficiaries, etc. For example, if a company is founded by an individual who already has a Ukrainian tax number, usually, the registration takes 1-2 working days.
The Accountor Ukraine Team will be happy to provide legal consultations on optimal structure of corporate rights, labor and immigration matters. We can prepare projects of all the documents required, organize communication with state authorities as well as provide advice on other issues related to ensuring confident and successful business start in Ukraine.