How to Start a Business in Ukraine as a Foreigner
Starting a business in another country is a task that requires careful planning and understanding of the local laws. This article is foreign entrepreneurs who consider expanding their business to Ukraine. We will describe the key steps and give you tips on how to go through each of them. Our goal at Accountor Ukraine is not just to give you some information, but to provide you with the means to achieve great results when doing business in Ukraine.
Choosing the Legal Form
Choosing the right legal form is the first important step. Understanding the pros and cons of each option is crucial to making an informed decision. The optimal legal form for your future company depends on what you are going to do, how many founders there are, what their accountability is, how they are going to manage the company, how the authorized capital is formed, what tax obligations the company is going to have, how easy it is to exit the business, etc.
There is a variety of legal forms for businesses in Ukraine, so, the choice can be quite tricky. These are the Limited Liability Company (TOV), Additional Liability Company (TDV), Sole Proprietorship (FOP), Joint-Stock Company (AT), General Partnership (PT), and Limited Partnership (KT).
Limited Liability Company in Ukraine (TOV)
A limited liability company may have one or more members, who may be individuals or legal entities. The number of participants can be limited or unlimited.
The authorized share capital of a limited liability company consists of the participants' contributions. These can be cash contributions or in-kind contributions (i.e. the participants’ property). The shareholders’ responsibility pertains only to their contributions to the authorized share capital, whereas their personal property is not affected.
Additional Liability Company in Ukraine (TDV)
An additional liability company may have one or several shareholders, who may be individuals or legal entities. Their number may be limited or unlimited. The authorized share capital of such companies consists of the shareholders’ contributions as well. However, the shareholders’ property may be affected in case of certain risks (hence the “additional liability”). Setting up an additional liability company in Ukraine may be a good option if you seek flexibility in management, and if you are ok with the idea of bearing the responsibility as described above.
Sole Proprietorship in Ukraine (FOP)
Becoming an individual entrepreneur, or FOP, is one of the most popular ways of doing business in Ukraine. This is a quick and simple way to launch a company without any significant administrative burdens. In this case, the owner – i.e., the individual entrepreneur (FOP), bears sole responsibility for all business obligations. The owner’s personal assets may be seized to settle liabilities. The owner is directly involved in managing all the business activities. Getting registered as a FOP is quicker and easier than registering other forms of business.
JSC in Ukraine (АТ)
A joint-stock company is a business entity that is owned by its shareholders. The shareholders’ liabilities pertain to the amounts of their contributions to the authorized capital. Personal assets of the shareholders are not subject to any risk.
This legal form is a good choice if you think of attracting investors and growing your company into a large business.
General Partnership
In a general partnership (PT), each participant bears unlimited personal liability for all the debts and obligations of the company.
Compared to other legal forms, general partnerships may be subject to more restrictions – e.g., in terms of expanding business or accessing capital investments.
Limited Partnership
Limited partnerships (KT) have two different types of members. One of the types – the ones who invest their costs or other assets – bear limited liability, while the other type bears unlimited personal liability.
For investors, limited partnerships may be an opportunity to make money without having to bear unlimited personal liability.
2. Company Registration in Ukraine
Company registration is an important step to get your business started in Ukraine. The required documents and the procedure may vary depending on the legal form and the status of the founder, who may be a natural person or a legal entity. Once your business is registered, you will receive the documents confirming the company’s legal status.
3. Getting Your Residence Permit in Ukraine
It goes without saying that foreign nationals must obtain a residence permit or a visa. Your type of permit/visa depends on the purpose and duration of your stay, so, it is crucial that you learn the requirements and criteria for obtaining a residence permit in Ukraine.
4. Opening a Bank Account
Opening a bank account is another important step of starting a company in Ukraine, as you will need your company account for selling goods and services, as well as for paying your taxes and fulfilling other obligations.
5. Obtaining a Tax Identification Number
Obtaining a tax identification number is a step you must take to become a tax agent in Ukraine. Make sure to obtain your tax identification number immediately upon getting your company registered. You will need it to file tax reports and to comply with other tax requirements.
How Can Accountor Ukraine Help?
- Advising on the optimal legal form for your business
- Consulting on the required documentation
- Advising on the optimal taxation system
- Tax planning
- Tax optimization advice
- State registration of companies
- Preparing corporate documents (charters etc.)
- Obtaining registration documents
- Opening bank accounts (UAH, EUR, USD, etc.)
- Translation of documents, notary services
- Drafting internal documents
- Preparing employment contracts
- Interim management service
- Temporary residence permits in Ukraine
- Permanent residence permits in Ukraine
- Work permits for foreigners in Ukraine
- Invitation letters for foreign visitors
- Setting up electronic document management system
- Legal Address for Companies
