You have decided to create a business in Ukraine, have found like-minded people and completed your business idea. It`s great, but now you need to do something essential – it’s time for business registration. And it won`t be easy because Ukrainian legislation is quite complicated. So here is some advice to start with.
First of all, answer the following questions:
The choice of business form and type of taxation will depend on answers to these questions.
The most common forms of business in Ukraine are the IE (individual entrepreneur, or “FOP” in Ukrainian), LLC (Limited Liability Company, or “TOV” in Ukrainian) and PE (private enterprise, or “PP” in Ukrainian). In fact, LLC and PE are almost identical legal entities. The only difference is that the relationship between founders of LLC is regulated by a separate law, but between founders of PE – only by the statute. So let’s compare the IE and LLC.
Individual entrepreneur is a simple form of entrepreneurship as:
Limited Liability Company is the most common form of legal entity as:
Types of taxation depend on the company’s turnover and the volume of annual income. The most simple is a single tax, the most difficult is the general tax system plus VAT (value-added tax). Furthermore under Ukrainian laws you must pay VAT doing certain businesses, for example, selling excise goods (alcohol, tobacco) or jewellery.
Also, type of taxation depends on your clients. If your counterparties (business partners, customers) are VAT registered and you work with large turnover (goods / works / services to thousands hryvnas), it is unprofitable for them to work with non-VAT registered as they`ll pay more taxes. And individual entrepreneurs that are single tax payers on second group can provide services only to individuals and single tax payers. That is, it`s forbidden for them to work with legal entities that are VAT registered.
If you still can not accurately calculate your future annual income and plan to do something “simple” (for example, sale of stationery or lawn care), you should choose “the individual entrepreneur that is a single tax payer”. If you already have mess in your head, it’s time to call your lawyer. If not – let`s continue.
So, when you have decided with the form of business and type of taxation, it’s time to “legalize”. On January 1, 2016 the business registration procedure was simplified. Now it is possible to register for 24 hours from the moment of filing documents to registrar or notary. But better just expect for 2-3 working days. And do not forget that the very document preparation will also take time. It`s one more good news for you – you just needn`t to pay for registration.
In any case you will need to fill an application (in Ukrainian), which must specify:
As a result information about your business in Ukraine will be put on the Unified State Register. Are you here now? Hold on, because there are many other nuances.
You`ll spend some days or even weeks for it, as the process of opening an account is rather long in some banks. As a result, you just will not succeed to start a business in Ukraine in 24 hours. Expect for at least 4 days, or even more. In general, be patient!
Believe in your business idea and do not sit on plans. Even if everyone says that it`s not the best idea to start a business in Ukraine. But keep in mind that Ukrainian laws are complicated. So call Artius lawyers, who will take care of all the paperwork and protect your business!