Business Setup and Registration in Various Legal Forms
Business Setup and Registration in Various Legal Forms
Acquisition of corporate rights in a company by a non-resident
This refers to becoming a member of an existing company by a non-resident in exchange for contributed property or non-property rights. They may be contributed in cash or in the form of property, securities, property rights or intellectual property rights. The types and forms of foreign investment are listed in more detail in Articles 2 and 3 of the Law of Ukraine “On the Regime of Foreign Investments”.
The inclusion of a new shareholder (including a non-resident) entails a change in the composition of the company’s shareholders and/or the size or ratio (proportions) of the share capital. This results in the need to amend the company’s constituent documents.
A non-resident may receive income in the form of dividends from holding corporate rights in a Ukrainian company.
Opening a Representative Office or Branch of a Non‑Resident in Ukraine
Foreign companies may establish a representative office or a branch in Ukraine as a form of local presence without incorporating a Ukrainian legal entity. A branch may carry out commercial and operational activities on behalf of the foreign company, while a representative office is generally limited to non‑commercial functions, such as representation, coordination, marketing support, liaison with local partners and protection of the foreign entity’s interests.
Following state registration, a representative office or branch must be registered with the Ukrainian tax authorities. Depending on the nature and scope of activities performed in Ukraine, such structures may be treated as corporate income tax payers, including with respect to profits attributable to Ukrainian operations. Separate accounting records must be maintained in Ukraine, and statutory tax and financial reporting obligations apply.
Representative offices and branches may open bank accounts in Ukraine to support their activities, including payment of local operating expenses, payroll and taxes.
As part of ongoing compliance, foreign companies operating through branches or representative offices are required to maintain up‑to‑date information on their ownership structure and ultimate beneficial owner (UBO) in accordance with Ukrainian transparency requirements.
Both forms may employ Ukrainian staff and foreign nationals. Foreign employees may work through a branch or representative office without obtaining a Ukrainian work permit, provided that they legally reside in Ukraine on the basis of a temporary residence permit.
Ukrainian law also provides a formal and regulated procedure for termination and liquidation of branches and representative offices, including settlement of tax liabilities, closure of bank accounts, appointment of a liquidator and transfer of documents to state archival institutions.
This structure allows foreign investors to establish a regulated local presence in Ukraine without incorporating a subsidiary, while operating within a clearly defined tax, accounting and employment framework.
Registration of legal entities in Ukraine
Legal entities are registered in accordance with the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organisations”.
Limited liability companies and additional liability companies
Limited liability company (LLC) is the most common form of business entity in Ukraine. In general, non-residents go through the same procedure as Ukrainian citizens when registering LLC/LCL, except for obtaining a work permit (if, for example, a foreign citizen will be the head of LLC/LCL), obtaining a residence permit, etc. Both foreign legal entities and foreign citizens can be founders of LLC. In addition, these persons do not necessarily have to be located or reside in Ukraine. To confirm the information about non-resident legal entities as shareholders, the state registrar is provided with an extract from the commercial, banking or other register of the country of registration of such entities, which, if necessary, is legalised or apostilled.
The list of documents and information required by a non-resident when registering LLC/ALC:
Registration of LLC in the state register can be completed within 24 hours. Receiving all registration documents, opening a bank account and registering an LLC at customs can take up to several business days.
The presence of the founders during the signing of the charter and minutes, as well as during the registration procedure itself, is not mandatory. An authorised person may sign the statutory documents, register the company, and obtain all necessary documents on the basis of a notarised (legalised/apostilled) power of attorney.
Joint Stock Company
According to the Law of Ukraine “On Joint Stock Companies”, non-residents may register a public (PJSC) or private (PrJSC) joint stock company or acquire a part of the shares of an existing one. The list of documents and information required by a non-resident, when registering a JSC, includes:
The main differences in the registration and operation of LLC and JSC are as follows:
Registration of FOP
FOP (sole proprietorship) is a popular legal form for small businesses, including if you plan to provide services or sell goods to end users — individuals. Information about FOP is entered into the Unified State Register, is public and can be checked at any stage of the sole proprietorship’s activities.
One of the advantages of registering as a private entrepreneur is the ability to choose a simplified taxation system, which really facilitates the submission of financial statements to regulatory authorities and allows individuals to apply reduced flat-rate income tax. However, this type of business is not suitable for all market participants, as it imposes certain restrictions on the amount of allowed annual turnover, the number of employees and allowed activities.
However, it is worth remembering that private entrepreneurs in Ukraine are liable for business-related obligations with all their property.
Documents required to register FOP by a non-resident:
Registration of a public association
The activities of public associations are carried out under the Law of Ukraine “On Public Associations”. Public associations may have the status of a legal entity and may not have the status of a legal entity.
Non-governmental organisations of other states and international non-governmental organisations operate in Ukraine, including through branches and representative offices established in Ukraine.
Public associations may cooperate with foreign non-governmental organisations and international governmental organisations in compliance with the laws of Ukraine and international treaties of Ukraine, ratified by the Verkhovna Rada of Ukraine.
