In accordance with the Constitution of Ukraine, foreigners and stateless persons who are in Ukraine on legal grounds enjoy the same rights and freedoms and also bear the same duties as citizens of Ukraine.

In addition, the Economic Code of Ukraine and the Law of Ukraine «On the Legal Status of Foreigners and Stateless Persons» also stipulates that foreign citizens and stateless persons in the exercise of economic activity in Ukraine enjoy the same rights and have the same duties as citizens of Ukraine.

Registration of foreign enterprise

The establishment of foreign enterprise is governed by the Law of Ukraine «On State Registration of Legal Entities and Individual Entrepreneurs». Ukrainian legislation does not provide an obligation of foreign entities to establish enterprises in certain organizational and legal form. In accordance with Part 1 of Article 117 of the Economic Code of Ukraine establishment of unitary enterprises as well as corporate, foreign enterprises, depending on the will of the founder and the requirements of the legislation on mandatory implementation of certain types of activity in certain legal forms.

If non-resident physical person intends to become a founder of a legal entity in Ukraine in this case he must provide a copy of the passport and get a non-resident tax payer's card - a personal identification number to the tax authorities.

The registration process of non-resident founder

It should be noted that if non-resident founder intends to hold the position of director of an enterprise, it’s necessary for him to obtain a work permit in the relevant employment office.

Non-resident founder passes through the same stages of registration that resident founder. Accordingly, in order to register the company with the non-resident founder in Ukraine, the following documents are needed:

• copy of the passport (translated into Ukrainian and certified by a notary) and tax payer code, gained in Ukraine;
• application for registration of a legal entity;
• statutory documents;
• minutes of the meeting at which it was agreed to create a legal entity.

If non-resident founder is a legal entity, the following documents are also needed:

• extract from the register;
• minutes of the meeting at which it was agreed to become a member of the newly created legal entity.

Preparatory stage for the registration is carried out after provision of the necessary documents. Registration of an entity by foreign founder in stages consists of:

• obtaining of an identification number in Kiev (for physical persons);
• provision/receipt of a document about the fact of registration of company in Ukraine (for legal entities);
• preparation of all constituent documents;
• forming of statute of the company with foreign investments;
• registration of foreign investments;
• filing of documents for registration in all government bodies, including fiscal services, funds, etc.;
• seal-making;
• opening an account.

Choice of the organizational-legal form

Generally, both residents and non-residents in establishing of enterprises choose such organizational-legal form as limited liability company (LLC), despite the absence of a limited selection of the organizational-legal form. This relatively regulated by the legislation of Ukraine form of enterprise can solve all the basic objectives of non-resident founder (carrying out economic activities on the territory of Ukraine through the controlled enterprises or with the participation of partners from Ukraine, an opportunity to obtain profit and profit repatriation, lack of liability of the non-resident founder for debts of created enterprise, etc.). At the same time LLC does not provide for additional formalities dealing with issue of shares and difficult reporting, as in joint-stock companies.

The legislation does not provide for minimum share capital for a limited liability company (LLC). But it should be noted that if the foreign non-resident founder will form the authorized capital of launching enterprise in the amount of not less than 100 000 US dollars, registering foreign investment, the foreign citizen has the right to obtain a permanent residence permit in Ukraine.

Implementing of budgets in the share capital of LLC under formation with foreign capital is possible only in foreign currency of the first category (euro, dollars, etc.). For putting the Ukrainian national currency - hryvnia in the share capital, the amount of foreign currency should be transferred to a special bank account of the investor-founder thereafter to give a mandate to bank to sell the depositing currency and then to enroll the profits as a contribution into hryvnias (UAH) in the formed statutory fund.

Companies with foreign capital or foreign founders and legal entities on the territory of Ukraine are identical subject to taxation. In 2016, the profit tax rate for all legal entities, including companies with a foreign owner is 18%.

Law company «Aleksey Pukha and Partners» has vast experience in the market of legal services in the sphere of corporate, tax law and conducts registration of companies with foreign capital and with the participation of non-residents.

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