How can a foreigner start and run a business in Ukraine?

What a foreigner can do

Ukraine leaves foreigners plenty of room to do business. A foreign national can found a limited liability company, register as an individual entrepreneur or represent a foreign company through a representative office. A foreigner needs no separate permission to do business. The limits sit elsewhere, in your migration status, your right to work and your tax position.

This guide shows how those pieces fit together, from the first tax number to closing a business. If you are new to the documents foreigners deal with in Ukraine, start with the guide to your first steps in Ukraine.

A few Ukrainian terms come up throughout. ТОВ is a limited liability company (LLC, transliterated TOV). ФОП is an individual entrepreneur (FOP), a person registered to trade in their own name. A посвідка is a temporary residence permit (TRP), and ДМС is the State Migration Service (DMS).

Four common models

In practice foreigners come to business in Ukraine by one of four routes.

The first step is a tax number

Almost every business route for a foreigner starts with a податковий номер (individual tax number, IPN). The registration law formally treats it as a founder's detail to be given "if available". Without it, though, opening a bank account, getting an electronic signature and completing notarial steps all become difficult. A director and an FOP must have one.

You get a tax number at the tax office in person or through a representative holding a notarised power of attorney. The process is explained in the article on getting a tax number as a foreigner.

LLC (TOV)

The LLC is the most common business form among foreigners. Its founder can be a foreign individual or a foreign company, and no residence permit is needed for that. One founder is enough. The law sets no minimum amount of authorised capital.

To register, you file an application with the state registrar together with the founder's decision or the minutes of the founders' meeting, the charter and the ownership structure. A notary certifies that the founders' signatures on the decision and on a custom charter are genuine. Documents issued abroad are legalised and translated. The full process, step by step, is in the article on opening an LLC as a foreigner.

The investor who stays abroad

Not every foreign owner plans to live in Ukraine. An LLC participant can manage their stake remotely. Decisions of the general meeting or of the sole participant are signed abroad and certified there by a notary, followed by legalisation, or signed online with a qualified electronic signature if the participant has one. Such a participant needs neither a residence permit nor a work permit, because they do not work in Ukraine.

Income reaches the investor as dividends. Tax is withheld from them, and if Ukraine has a double taxation treaty with the investor's country of residence, the rate can be reduced once that residence is confirmed. In this model the director is usually someone who already has the right to work in Ukraine.

Registered address

An LLC is registered at a specific address in Ukraine, and that address goes into the ЄДР (Unified State Register). It can be your own office, rented premises or an address provided for registration under a contract. Official mail from the tax authority and other bodies arrives there, so someone has to collect it. Before you register, check that the owner of the premises agrees to registration at that address.

A foreign director

In an LLC, the key migration question concerns the director. A director works in the company, and founders and participants are not on the list of foreigners who may work without a permit. That is why a foreign director needs a дозвіл на застосування праці (work permit), even when they own the company.

The sequence runs like this. First the LLC is registered. The company, acting as employer, then applies for the permit. Once the permit is issued, the director obtains a type D visa if their nationality requires one, enters Ukraine and applies for a residence permit on the basis of employment. The details are in the article on a work permit for a founder or director.

Until the permit arrives, the director can be someone who does not need one, such as a Ukrainian citizen or a foreigner with permanent residence. This lets the company start trading without waiting for the owner's permit.

Individual entrepreneur (FOP)

Registering as an FOP suits a foreigner who already lives in Ukraine on a residence permit and wants to work for themselves. An FOP can be registered without a residence permit, but that rarely pays off. The Tax Code treats registration as an entrepreneur in itself as a ground for tax residency, yet an FOP without a residence permit will most likely not meet the residency tests and will not be able to stay on the simplified single tax.

Working for themselves as an FOP, the foreigner does not need a work permit. On the other hand, an FOP is liable for debts with everything they own and faces tax restrictions. How to register is explained in the article on registering as an FOP.

Representative office

A foreign company can operate in Ukraine through a representative office. The office is not a legal entity and acts on behalf of the foreign company. The employment law names staff of branches and representative offices of foreign legal entities among those who work without a work permit.

For the head or an employee of such an office, this is a convenient route to a residence permit, because work at a representative office is a ground in its own right. More on this in the article on a residence permit for representative office staff.

Business and the residence permit

A widespread mistake is to assume that owning a company gives you the right to live in Ukraine. On its own it does not. A residence permit can be based on working in the company under a work permit, on an investment in its authorised capital, or on working at a representative office of a foreign company.

Investment as a ground comes with its own requirements on amount, currency and documents. The foreigner's share in the authorised capital must be at least EUR 100,000. How this ground works is set out in the article on the investor residence permit.

Permanent residence and business

Foreign investment of at least USD 100,000 in the Ukrainian economy is also a category for an immigration permit under Article 4(2) of the Law 'On Immigration'. Categories under Part 2 work within a quota, which in practice the Cabinet of Ministers sets every year. If no quota is set for the year, applications in these categories are not considered. A foreigner with ПМЖ (permanent residence) works without a work permit, which makes running a business easier. The grounds are described in the article on grounds for permanent residence.

Documents from abroad

A foreigner's business almost always needs documents issued abroad. Typical examples are an extract from the register of the foreign company, documents on the beneficial owner and a power of attorney for a representative. They are legalised or apostilled, unless an international treaty provides otherwise, and translated into Ukrainian.

An extract from the foreign company's register must be recent on the date you file it. Plan the apostille and the translation so that they do not use up its whole period of validity. The way to choose between the procedures is explained in the article on apostille and legalisation.

Ultimate beneficial owner

Every Ukrainian company discloses its ownership structure and its ultimate beneficial owner (UBO). For a foreign UBO, you file a notarised copy of an identity document that confirms all of that person's citizenships. A foreign corporate founder also files an extract from its home register. The ownership structure is updated whenever it changes, and breaching these requirements carries liability.

Electronic signature and Diia

Much of doing business in Ukraine now happens online. A qualified electronic signature is needed for tax reporting, for the bank and for state registration. A foreigner with a biometric residence permit and a tax number can use Дія (Diia, the state services app) and create a Diia.Signature. The article on Diia for foreigners explains how.

Banking

Both a company and an FOP open a current account with a Ukrainian bank. The bank checks every client under financial monitoring rules and usually asks a foreign owner for more documents than the minimum in the National Bank of Ukraine instruction. After an LLC is registered, the registrar produces a description of documents with an access code, and the bank uses that code to download the charter from the register itself. Opening an account is covered in the article on a Ukrainian bank account for foreigners.

Taxes

How a foreigner is taxed depends on tax residency. A Ukrainian tax resident pays income tax on income from Ukrainian and foreign sources, a non-resident only on income from Ukrainian sources. Among the residency tests, the Tax Code names spending 183 days or more in Ukraine during the tax year. Non-residents cannot pay the єдиний податок (simplified single tax) in groups one, two and three. At the same time, the Tax Code treats registration as an entrepreneur as a sufficient ground for residency, although an FOP without a residence permit will most likely not meet the residency tests. The detail is in the article on taxes for a foreign entrepreneur.

Accounting and reporting

A company with a foreign owner keeps its books and reports exactly like any other Ukrainian company. That means tax and financial reporting, employer reporting and, for VAT payers, registration of tax invoices. Most reports are filed electronically with a qualified signature. A foreign owner who does not know Ukrainian tax law should have an accountant from the first month, ideally one who understands both the tax side and the migration consequences.

Keep the ownership structure in mind too. Information on beneficial owners has to stay current, and changes in the ownership chain abroad may also require an update of the data held in Ukraine.

Ukrainian staff

A foreign company or an LLC with a foreign owner can hire Ukrainian citizens under the general rules of employment law. A work permit is only needed for foreigners who do not have the right to work without one. As employer, the company withholds personal income tax of 18% and the military levy of 5% from salaries, accrues the single social contribution of 22% and reports on each employee.

Hiring other foreigners

When the company hires other foreigners, it goes through the same work permit procedure as for its director. The employer files documents with the центр зайнятості (employment centre), signs the employment contract within the set period and reports any changes. The list of documents is in the article on documents for a work permit, and the conditions of employment in the article on employing a foreigner.

Step-by-step plan for an owner-director

The most demanding model is the owner who personally manages their LLC in Ukraine. Here the steps run in this order:

Each step depends on the one before it. Skip one, such as the tax number, and every later step slows down. That is why we draw up a calendar of all stages at the first consultation and track the deadline of every document.

1. 1Tax numbers for the founder and the future director.
2. 2Preparing documents, including the apostille and translation of foreign papers.
3. 3Registering the LLC with the state registrar.
4. 4Opening the company's bank account.
5. 5Applying for the director's work permit on behalf of the LLC.
6. 6A type D visa at a consulate, if the director's nationality requires one.
7. 7Entering Ukraine and applying for a residence permit on the basis of employment.
8. 8Registering a place of residence after the residence permit is issued.

Model charter or your own

An LLC can operate under the model charter approved by the Cabinet of Ministers or under its own. The model charter is simpler and cheaper to register because no separate charter text is needed. It offers little flexibility, though. It provides for a single director and ignores points that often matter to foreign owners, such as several managers or a special procedure for a participant to leave.

A custom charter can be drafted in two languages, Ukrainian and English, which is convenient for a foreign owner. The registration application itself is always completed in Ukrainian. A notary certifies the founders' signatures on the first version of the LLC's charter.

Business activities and permits

At registration you choose the types of economic activity, with the main one listed first. They determine whether your chosen tax system is available and whether you need licences or permits. Some activities, financial services for example, cannot be combined with the simplified system. Check this before registering so that you do not have to change systems later.

Changes in the company

Over time a company changes its director, its participants, its address or its charter. Such changes are entered into the Unified State Register through the state registrar. Signatures on the decisions are, as a rule, certified by a notary. When a participant is a foreigner living abroad, their signature is certified abroad and legalised, so plan changes well ahead.

For a foreign director, a change of director is also tied to the work permit. If the foreign director leaves, the employer reports it, and a residence permit based on that job loses its ground.

Closing the business

An FOP is not liquidated but terminated. The termination entry in the register does not end the process, because liquidation reports, a reconciliation with the tax office and deregistration still follow. An LLC is liquidated under a separate procedure, with a liquidation commission and settlements with creditors.

For a foreigner, closing a business also has migration consequences. If your residence permit rested on working as director of your own company, the ground disappears when the company is liquidated. Plan the closure together with the question of what ground you will live in Ukraine on afterwards.

The owner's family

When an owner-director has received a residence permit on the basis of employment, their family can obtain permits as family members of a foreigner who holds one. The application includes documents proving the family relationship and evidence of funds to support the family. Nationals of countries that need a visa first obtain a type D visa as family members. This route is described in the article on a residence permit for a family member.

Martial law

Business registration continues under martial law, including online and through notaries. Migration procedures, however, have their own particularities. During an air raid alert, DMS offices do not provide administrative services, so leave extra time when you plan to file for a residence permit. Separate restrictions apply to people under sanctions, and that situation is worth checking before the company is registered.

Common mistakes

• Registering as an FOP to obtain a residence permit, when FOP status is not a ground for a permit.
• Appointing the foreign owner as director without a work permit.
• Putting off the tax number until later.
• Filing a foreign company extract that has gone stale while waiting for the apostille.
• Choosing the simplified single tax without checking tax residency.
• Forgetting to update the ownership structure after participants change.

Lawyer's experience

Most often foreigners come to me with a ready-made plan of "I will register as an FOP and get a residence permit". That route does not work. I start by asking where the person is now and whether they intend to live in Ukraine. The answer tells me whether they need an LLC with a work permit for the director or whether an FOP will do.

My second piece of advice concerns the order of steps. Tax number, company registration, bank account, work permit, visa, residence permit. Swap the steps around and the process stalls, and some documents have to be prepared twice. We give every client a calendar of all stages from the first consultation.

The third concerns the accountant. Foreigners often think they will sort out taxes later. The choice of tax system and the question of residency have to be settled before registration, because correcting them afterwards costs more.

If you are planning a business in Ukraine, at a migration law consultation we will build your plan from the tax number to the residence permit.

All articles on this topic

• [How a foreigner opens an LLC](/knowledge/business/how-to-open-llc)
• [How a foreigner registers as an FOP](/knowledge/business/how-to-become-fop)
• [LLC, FOP or representative office](/knowledge/business/business-legal-forms)
• [Taxes for a foreign entrepreneur](/knowledge/business/taxation-in-ukraine)
• [Work permit for a founder or director](/knowledge/work-permit/work-permit-founder-director)
• [Investor residence permit](/knowledge/temporary-residence/residence-permit-investor)
• [Residence permit for representative office staff](/knowledge/temporary-residence/residence-permit-branch-rep)
• [Branch or representative office of a foreign company](/knowledge/business/foreign-company-branch)
• [Disclosing the ultimate beneficial owner](/knowledge/business/ubo-disclosure-foreigners)
• [Diia City residency](/knowledge/business/diia-city-residency)

Frequently asked questions