How to register a company and get started the right way

Launching your company in any jurisdiction — is a structured process that, if carefully followed, can set you on the path to success. Here’s a detailed guide to help you navigate the essentials:

1. Decide on the type of enterprise

Selecting the appropriate legal entity is fundamental. In Ukraine, the most common forms are:

1. Private Enterprise (PP) — same as our LLC, but without a minimum capital requirement.
2. Limited Liability Company (TOV/TOB) — no minimum capital requirement and more flexibility.
3. Joint Stock Company (PAT/PrAT): as of September 27, 2021, requires a minimum capital of 1,250 times the minimum wage, or UAH 7,500,000. Each structure has distinct implications regarding liability, taxation, and regulatory obligations.

Of course, it is better to communicate with legal professionals. This will allow you to determine what exactly will be fully consistent with the goals of your business.

For example, if you company registration a Private Enterprise (PP) and operate as a small freelance designer, you do not need to invest a minimum capital and can operate under the simplified tax regime paying 5% of your income. For an annual income of 200,000 UAH, the tax is 10,000 UAH.

On the other hand, if you open a LLC  (TOV/TOB) for an e-commerce company, you have more flexibility and may hire employees. Assuming annual sales of UAH 1 million, you will have to pay a corporate profit tax of 18%, which amounts to UAH 180,000.

For joint stock companies (PAT/PrAT), such as large agricultural businesses planning to issue shares, a minimum capital of UAH 7.5 million is required to meet the statutory requirements. In addition, the company will need to comply with stricter reporting and auditing standards, which may result in higher operating costs.

2. Go through the company registration procedure

So, if you’re setting up a Private Enterprise (PP) through Diia, you’ll breeze through the process in 20-30 minutes. The best part? It costs around 100 UAH and you’ll get your registration certificate right in your inbox. No trips to the office. Easy, right?

For a Limited Liability Company (TOV/TOB), you’ll need to provide some extra paperwork, like articles of incorporation and shareholder info. Still, it’s a quick ride. It’ll cost you roughly 400 UAH, and you’ll have all your digital docs ready in no time.

Once your business is all set up, you can dive into the National Business Info Centre. It’s free, fast, and gives you all the deets you need, from registration dates to tax info. Think of it as your business’s public profile, all laid out for the world to see.

3. Understand Taxation and Compliance

Grasping the tax landscape is crucial:

• Corporate Profit Tax: Standard rate is 18%.
  Value Added Tax (VAT): Applicable rates can reach up to 20%, depending on the product or service.
  Simplified Tax System: An alternative 5% rate on revenue is available, with optional VAT registration.

Ensure timely submission of all necessary documentation to the tax authorities to maintain compliance and avoid penalties.

4. Leverage Government Support

Ukraine offers resources to bolster business ventures:

• Invest Ukraine. Operating under the State Agency for Investment and National Projects, Invest Ukraine provides investment consulting services, assisting with information about investment opportunities and liaising within the government
• Diia.Business. A platform supporting businesses with free consultations and development ideas. It has provided over 14,500 specialized consultations to date.

5. Adapt and get important information on time

The business environment is dynamic:

• Economic Initiatives. The Ukrainian government is actively promoting value-added production to reshape the wartime economy, offering grants, loans, and aid to small and medium-sized businesses.
• Security and Resources. Discussions are underway regarding leveraging Ukraine’s rare earth minerals in exchange for security support, potentially impacting the business landscape.

By meticulously following these steps and staying attuned to the evolving economic climate, you’ll be well-equipped to establish and grow your business in Ukraine.

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