How does a foreigner open an LLC in Ukraine?

Who can found an LLC

A ТОВ (limited liability company, LLC, transliterated TOV) can be founded by a foreign individual or by a foreign company. No special permission is needed for this. A single founder is enough, and nationality makes no difference. For the wider picture of doing business in Ukraine as a foreigner, see the guide to business for foreigners.

What makes the process demanding is paperwork rather than the right to set up a company. Foreign documents have to be legalised and translated, the founder needs a Ukrainian tax number, and a foreign director needs a work permit.

Documents for the registrar

To register an LLC, you file the following with the state registrar:

A notary certifies that the founders' signatures on the decision and on a custom charter are genuine. The exception is documents generated online and signed with a qualified electronic signature. Only the pages of the application that you need are filled in, and blank pages are neither filed nor signed.

• an application for state registration of a legal entity on Form 1;
• the decision of the sole founder, or the minutes of the general meeting if there are several founders;
• a custom charter, or a decision to operate under the model charter;
• the ownership structure with details of the ultimate beneficial owner (UBO);
• copies of the founder's passport documents with a certified translation.

When the founder is a foreign company

Every foreign legal entity files a document confirming its registration in its home country, such as an extract from the commercial register. The law requires this extract to be recent, meaning issued shortly before filing. We are currently checking the exact period and will add it to this article once confirmed.

Documents issued abroad are legalised or apostilled, unless an international treaty provides otherwise, and translated into Ukrainian. How to choose the procedure is explained in the article on apostille and legalisation, and how to certify the translation in the article on notarised translation.

Ultimate beneficial owner

A foreign founder brings with it a full set of UBO documents. The ownership structure is accompanied by an extract from the foreign register and a notarised copy of the UBO's identity document confirming all of their citizenships. Details of foreign beneficial owners who have no Ukrainian tax number are entered into the register on the basis of the documents filed.

Tax number

The registration law describes the founder's tax number as a detail given "if available". On paper, then, an LLC can be registered without one. In practice you cannot open a bank account or get an electronic signature without a tax number, and notarial steps become difficult, so it comes first. The article on getting a tax number as a foreigner shows how.

A foreign director

When a foreigner becomes the LLC's director, they work in the company and the rules on employing foreigners apply to them. Founders and participants are not on the list of people who work without a permit. An owner-director therefore needs a дозвіл на застосування праці (work permit) just like any hired employee. The details are in the article on a work permit for a founder or director.

Here is the order of events. The LLC is registered first. Next, the company as employer applies for the director's work permit. Only after the permit is issued can the director start work and apply for a residence permit.

Name, activities and tax system

Before registration, the proposed name is checked against the Unified State Register (ЄДР) to make sure it is not identical to an existing one. Searching the register on the Ministry of Justice website is free. Next you pick the types of economic activity and choose a tax system, either the general one or the simplified one. For the simplified system, check whether your chosen activities are allowed in the group you need. Choosing a business form is covered in the article on LLC, FOP or representative office.

Authorised capital

Ukrainian law sets no minimum authorised capital for an LLC, so the founders decide the amount themselves. Foreign investment in the authorised capital does matter for certain migration grounds, such as the investor residence permit, and there the law sets its own requirements. For a temporary residence permit, the foreigner's share in the authorised capital must be at least EUR 100,000. More on this in the article on the investor residence permit.

After registration

Once the company is registered, the registrar generates a description of documents with an access code. With that code you can download the register extract and the charter in electronic form. Keep the description issued with the charter you filed, because the bank will ask for exactly that. The next steps are opening the company's account and, where needed, registering as a VAT payer or as a payer of the simplified single tax.

Lawyer's experience

The most common delay in registering an LLC with a foreign founder comes from documents issued abroad. The foreign company's register extract did not get through the apostille and translation while it was still recent. That is why we plan the sequence so that all foreign documents are ready at the same time.

My second piece of advice concerns the director. Founders often plan for the foreign owner to become director straight after registration. Without a work permit, however, the owner cannot work, so either appoint a director who needs no permit for the first period or build the permit timeline into the plan from the start.

If you are planning an LLC with a foreign founder, at a migration law consultation we will go through the structure and the order of steps.

Frequently asked questions