Ukraine Company Formation

Opening a company in Ukraine

Why open a company in Ukraine? What are the advantages in the state of Ukraine?
Ukraine, a post-socialist country (former Soviet Union), is a great opportunity for entrepreneurs in the coming years.

The local currency is the Ukrainian hryvnia (HRV), and living is very cheap in the country.

Ukraine is a huge country, bigger than all European countries. In Ukraine, maintenance costs are very cheap, and the local market is western and understands the English language reasonably well.

The country is in Eastern Europe next to Romania, Poland, Belarus and Russia, and this is a very important strategic location for import/export operations to all of Europe and even the Middle East, via the Black Sea.

Educated Ukrainian economists, engineers, IT specialists and scientists are in demand and highly valued workers who find work in IT companies, R&D centers and scientific institutes.

Ukraine is a perfect place for investment and business expansion. Ukrainian programmers are cheap labor that produces great software products.

Due to the results of Russia's war against Ukraine, there is a need for a lot of investment in the country financially and in terms of real estate projects. The Ukrainian government is eager to boost the economy by providing incentives to foreign investors.

The process of opening a company in Ukraine
Opening a company in Ukraine begins with the signing of a notarial power of attorney to open a company by a local agent. The document was then sent with a courier urgently to Ukraine to be processed by a local Ukrainian notary. After several processes in Ukraine, the customer is required to sign the application for registration in the commercial register, and again send the document to Ukraine. At this stage the company already exists legally and can start business activities.

After the company is opened, a company form is issued from the commercial register (this is the Ukrainian certificate of incorporation).

In Ukraine you do not need any European citizenship to open a company. You can open a Ukrainian company even if you are a foreign citizen.

This means that it is possible to open the company with 100% shareholding in the name of a foreign citizen - in your name, or even in the name of a foreign company. The director can be foreign.

The demand for a local director in Ukraine
For the process of registering a company in Ukraine, it is required to appoint one director of the new company who is a resident of Ukraine. This means that the director must be a citizen of Ukraine, or a foreign citizen with a valid residence permit or residency in Ukraine, such as marrying a Ukrainian spouse or obtaining a work permit in Ukraine.

In practice there is no need for a local director, but the foreign client can be a sole director if he has a work permit in Ukraine. But it's like a chicken and an egg because the company needs to exist in order to issue a work permit to a foreign citizen, before the company can hire the foreign director as the only director. That is, the request for a work permit as mentioned above is submitted by the company itself. Since the appointment of the director according to the Ukrainian law takes place at the same time as the registration of a newly created company, at the time of submitting the application a company has not yet been created, therefore it is impossible to submit such an application. This is the real reason that a local director is required, but it also means that after establishing the company and receiving the work permit for the foreign client, the local director can be removed. We note that a work permit is something that is very easy to issue in Ukraine, and the process of obtaining such a permit will take about 3 months.

Opening a bank account in Ukraine - a current account for the company
Anyone who wants to open a bank account is required to physically come to Ukraine.

However, there is an alternative, and that is opening an internet bank account. Indeed, similar to our "Zero One" bank, there are Internet banks in Europe that would be happy to accept your company in Ukraine as a client.

Registration with the tax authorities
As part of the process of opening the company, automatic registration of the new company is carried out in all tax authorities of the country. The company will receive a VAT number and you can start trading.

Company maintenance
The company requires annual maintenance of payment of fees, annual submissions, local address (which we will provide for you), as well as submissions to the tax authority.
However, all costs in Ukraine are low due to the relatively cheap cost of living.

Tax in Ukraine
The company tax in Ukraine stands at a low rate of only 18%.
For sales to the local Ukrainian market, the VAT is 20%.

Questions and answers
Question: Is it necessary to physically fly to Ukraine to open a company in Ukraine?
Answer: The entire process is carried out remotely and at no stage is it necessary to physically come to Ukraine. There is no need to fly to Ukraine to open the company, but it is required to fly physically to open the company's bank account in Ukraine. However, the process of opening the company itself is carried out remotely without stepping on Ukrainian soil.

Question: Who provides the local address for the company in the new Ukraine?
Answer: We will provide the local address.

Question: How can I find a good accountant who can take care of the company in our new Ukraine?
Answer: We will connect you with a local accountant.

Question: If I want to come to Ukraine to open a bank account, what should I do?
Answer: We will try ahead of time to arrange a meeting for you at the branch for the purpose of signing the account opening forms, so that everything will be in order before you arrive, so that you will not just walk around the city in order to find a branch that will accept you and open a bank account for your new company in Ukraine.

Question: What type of company in Ukraine should I open?
Answer: In Ukraine there are two types of companies:
The first type is a limited liability company. In Ukrainian, it is called Товариство з беременною оставкальности or TOB. This is the LLC.
LLCs are considered more flexible in terms of organizational structure and easier to operate on a daily basis. They are suitable for investments of different scopes.

This company is the most flexible type of company structure. Since it technically has no shares, it is not subject to Ukrainian securities law.

The second type is a "joint stock company", that's how I imagine it can be translated into Hebrew. In Ukrainian this type is called Акционерне товариство or AT.
AT companies are generally designed for large-scale investments. As a result, they are less flexible from a legal point of view and much more formal in terms of organizational structure and day-to-day operations. On the other hand, they are great for raising capital, because their shares can be issued on the Ukrainian stock exchange, and they can issue securities of various types.

Foreign investors often choose TOB companies, i.e. companies of the first type, unless their business requires the company to be of the AT type (for example, if it is planned to establish a new bank or insurance company).

Question: How long does it take to open a company in Ukraine?
Answer: On the day the documents are submitted, the memorandum of association of the company receives a state registration stamp.
Within a day of submitting the documents, the company receives registration approval from the state.
Within five working days, the company receives automatic registration with the tax bodies, the state's statistical authorities, the National Insurance Fund of the Ministry of Labor and National Insurance, and also the registration with the Ukrainian National Insurance Company "Belgosstrakh".
After that, the process of opening a bank account takes several weeks, depending on the readiness of the banks to accept the new company as a customer. Usually the whole process including the bank account ends in about 4 weeks. Of course, these are times that depend on third parties, so this is only an estimate.

Question: Is it possible to open a company in Ukraine for a person with American citizenship or a person living in the USA?
Answer: Yes. We know how to open a company in Ukraine for a person with American citizenship or a person living in the USA.

On the face of it, it seems trivial that a person with ties to the USA could open a company in Ukraine, but we assure you that this is not the case. Today, all banks in Ukraine without exception refuse to open an account for a new Ukrainian company if its owner has any ties to the USA. Therefore, we are probably the only ones, and certainly one of the few in Ukraine, who know how to open a company in Ukraine for a person with American citizenship or who lives in the USA.

Question: Is it possible to define that any foreign company will be the subsidiary of a company in Ukraine?
Answer: Yes, absolutely, we know how to do such a process with the foreign Registrar of Companies without any problems and in a completely smooth manner.

Question: How much does it cost to open a company in Ukraine?
Answer: Click here and get in touch and get a current quote without obligation!