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Company Formation Ukraine.com provides all the necessary instruments for company registration in Ukraine such as offering a registration office, opening a banks account, drafting the foundation documents.
Working with a team of local specialists is recommended for foreign investors who wish to incorporate a business in the shortest amount of time possible, and at the same time ensure that they comply with the rules and the registrations in force. Those who cannot be present in the country during the entire procedure, as well as those who are having language difficulties, can rely on the specialized assistance offered by our team of incorporation experts.
The process of company incorporation in Ukraine starts with choosing the proper form of business. The Ukrainian entrepreneurs can chose from the below forms of business.
Public joint-stock company: it has unlimited shareholders, can list its stocks on the market and it is subject to more complex accounting and reporting rules;
Private joint-stock company: it can distribute the shares only among the founders, it can have various numbers of shares and allow shareholders to have different rights;
Limited liability company: like for the private joint-stock company, the transfer of shares is limited, however, an important advantage is that the reporting requirements are lighter for this business form;
Branch and representative office: the branch is an extension of a foreign company with no legal identity and the representative office can be used only for limited, marketing purposes.
The private joint-stock company and the limited liability company are the two most used business forms.
These business forms are described below in more detail, along with other options. If you wish to know more, or receive answers to particular questions as well as assistance for registering any of these business forms, please feel free to reach out to our agents to set up a company in Ukraine.
Types of business entities in Ukraine
Establishing an Ukrainian TOV - Limited Liability Company. In Ukraine the limited liability company is a form of business established by small businesses as the maximum number of shareholders cannot exceed 10 and the provided minimum share capital consist of minimum 100 minimum salaries at the moment of registration. There is no restriction on the amount of authorized share capital.
At least half of this capital must be paid at registration and the other half in maximum one year after the registration. The capital of the TOV is divided into shares which are transferable only with the full consent of the company members. The management of the Ukrainian TOV is assured by the general meeting of participants, the Board of Directors and a General Director appointed from the members of the Board of Directors.
Other form of Ukrainian company is the Additional Limited Liability Company. The founders of a Ukrainian Additional Limited Liability Company must deliver a contribution of at least 100 minimum salaries and their personal assets can be used if necessary to cover the outstanding liabilities.
A Ukrainian PrAT- private joint-stock company or PuAT-public joint - stock companies are forms of business especially designed for medium and large businesses. Both of these entities must have a share capital of at least 1250 salaries at the moment of registration and the main difference is that the private joint-stock company cannot freely trade its shares to the public while the PuAT-public joint-stock company has its shares freely transferable and can be listed on a stock exchange. The main bodies which govern the joint stock companies are the general assembly, the executive body and a supervision body. The company can be incorporated for an indefinite period, and it is allowed to operate all types of business activities, as long as this is lawful. Shareholders meetings are expected to take place at least one a year. When a joint-stock company has more than ten shareholders, it is mandatory to establish a Supervisory Board.
In General Partnerships created in Ukraine all the members are united under the same economic purposes and share the same responsibilities and liabilities for the company’s debts.
A Limited Partnership incorporated in Ukraine is formed by at least one general partner with unlimited liabilities for the company’s debts and one silent partner with responsibilities limited by their contribution to the capital.
The choice between the available business forms depends on the available capital, the number of investors and the level of protection against liability that they wish to have during the course of running the business. Other considerations might include the complexities of the accounting and reporting requirements, which are different for large taxpayers compared to small ones.
We invite you to watch a short video about company formation in Ukraine:
Incorporation procedure in Ukraine
Corporations in Ukraine are registered with the United State Register of Legal Entities, which operates under the Ministry of Justice. The registration can be performed electronically via a special registration portal and our team specializing in company formation in Ukraine can assist you during this process.
Before applying for the registration at the Ukrainian State Register, the company’s representatives must notarize the company's charter or articles of association, opening a bank account and pay a registration fee.
The registration documents necessary for company incorporation in Ukraine consists in two copies of the application form, copies of the company's charter or articles of association, the minutes of the meeting where the decision of incorporation was taken, bank certificate related to the payment of registration fee and depositing the share capital. As the registration is made through a one stop shop, the registration with the Social Insurance Fund, the Industrial Accidents Fund, Employment Fund and Pension Fund and tax authorities is also made.
After applying at the one stop shop and receiving the certificate of registration, the newly established companies must register for VAT with the State Tax Authority. Also an official seal necessary for all the transactions must be purchased from stationary shops. The last step of registration consists in converting the initial temporary bank account into a permanent one
The Ukrainian District tax authorities will be notified as soon as the permanent bank account is opened and the newly formed company can begin its actions in Ukraine.
Company taxation in Ukraine
Once the company is incorporated and starts its business activities it will be subject on its worldwide income, as a locally registered (resident) company. A number of new rules, which are likely to enter into force in 2022, will make it possible for foreign companies with their effective place of management in the country to choose to become a tax resident.
The taxes for companies that were in force at the time this article was written are the following:
- 18%: the corporate income tax in Ukraine, a relatively low rate compared to the ones applicable in other European countries;
- 15%: the withholding tax on dividend payments made by nonresidents; dividends that are received by a domestic company from another Ukrainian company are not subject to tax;
- 20%; the standard value-added tax in Ukraine, with other lower rates of 14% and 7% and a 0% rate for certain types of goods or services;
- 22%: the unified social security contribution that is paid on the salary of an employee.
There is no payroll tax and no capital duty for companies. Companies that own real estate in the country (residential or nonresidential) are subject to a tax rate of 1.5% of one minimum salary per square meter per year. An annual tax applies when the area of the apartment exceeds 60 sqm or the area of the home exceeds 120 sqm.
The tax year is the same as the calendar year in Ukraine and the corporate income tax returns are submitted within 40 days after the quarterly reporting period and 60 days after the annual reporting period. Newly incorporated companies are subject only to annual reporting.
Ukrainian companies that fail to observe the rules and regulations set forth for tax purposes depend on the severity and the frequency and are expressed as a percentage of the due taxes over a pre-determined period of days. Our agents who specialize in company formation matters, including taxation issues, can give you more details about the administrative liabilities and can help foreign investor avoid such situations.
Economy overview in Ukraine
Situated in a very advantageous area in the Eastern Europe, bordered by the Black Sea, Ukraine is offering great opportunities for the investors who want to start a new company. If you are interested in company formation in Ukraine, you should know that the work force is well trained (for example, Ukraine is included in the top ten locations in the world regarding the IT specialists). The agricultural sector is an attractive one due to the fact that the country has large agricultural potential. Also, Ukraine has great deposits of titanium, zirconium, iron, manganese.
Companyformationukraine.com is a part of Bridgewest.eu, an international network which has affiliated partners throughout the world, including Polish lawyers which can provide local legal assistance to foreign investors.
Call us now at +7(495)504-12-15 to set up an appointment with our lawyers in Kiev, Ukraine. Alternatively you can incorporate your company without traveling to Ukraine.
As a Herman & Smith law firm client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Ukraine.