As in Poland, economic activity in Ukraine may be conducted directly by a natural person (sole proprietorship) or by a legal person established for this purpose.
If a person wants to run a business on his own, he must register as an individual entrepreneur, referred to as the so-called “FOP” (from: фізична особа підприємець – natural person entrepreneur).
A legal person may operate in the form of a private enterprise (a special entity that has no direct equivalent in Polish law), general partnership, limited partnership, limited liability company or with additional liability, joint-stock company or foreign representative office, depending on the purpose of the activity.
Let us consider in more detail the arguments in favor of this form of business activity and the conditions for their registration.
FOPs have a simple registration procedure, taxation and reporting system.
To register a person running a sole proprietorship, a passport, a taxpayer registration card issued by the Tax Office and an application are required. Foreigners can be registered as a sole proprietorship if they have a taxpayer's registration card in Ukraine and a temporary or permanent residence permit in Ukraine, confirming the legality of their stay.
FOP registration can be done online in a special application of state services - Diya, or in person at the competent public administration body, at the so-called status recorder . When registering, indicate the type of activity that the person plans to carry out in accordance with the KVED (classification of economic activities) and choose the form of taxation. If you choose the simplified tax, the annual turnover is limited and cannot exceed a certain amount (e.g. 1167 times the minimum wage) - then the tax rate can be 3 or 5 percent. Tax returns are submitted quarterly. In addition, of course, social security contributions must be paid.
If the scale of the business you intend to run is not large, a sole proprietorship is a very convenient form of business. However, it should be remembered that the FOP, as an individual entrepreneur, is responsible for its obligations related to its business activity with all its assets, which is the basic risk of conducting business in this form.
Foreigners can be partners of legal entities in Ukraine.
Registration of a legal entity in Ukraine takes place - as in the case of FOP - in the competent public administration body, the so-called status recorder . Thus, it is not a judicial authority, unlike the system of registration of corporate entrepreneurs in Poland (KRS). Notaries can also act as state registrars . In any case, the notary public must certify the signatures on the documents, and the registration itself can be done by both the state registrar and the notary public. Due to higher costs, notarial registration is less frequent.
The choice of the right type of legal entity depends of course on many factors, including the amount of capital to be invested, the expected sources of future funding, the accepted risk scale, and the set goals, including in particular the expected income. An important point is the preparation of a special sheet that will meet certain formal requirements.
In order to register a legal entity, its founder or an authorized person must submit to the registrar: the relevant registration form, the founders' minutes of the decision to establish a legal entity in the original or a notarized copy; 2 copies of the original of the above-mentioned special card , as well as documents certifying the identity of the person making the application (in the case of a foreigner it will be a passport).
It is also necessary to determine the size of the authorized capital. Currently, the minimum amount threshold in this regard has been abolished - it can be as high as UAH 1. However, in the case of certain types of activity, such a minimum is determined by specific regulations (it is required, among others, for trading in securities, stock exchanges, banks, tour operators, news agencies, etc.).
The registrar makes a decision on the registration of a legal entity or on refusal to register within 24 hours of submitting a correctly completed package of documents. The chances of quickly obtaining a positive decision and starting a business are definitely increased by using the legal assistance of specialists.
This entry contains general information about the legal issue discussed. It does not constitute legal advice or a solution to a specific case or legal problem. Due to the unique nature of each factual situation and the variability of the legal status, we recommend seeking legal advice from our law firm.