The most common form of business entity in Ukraine is the Limited Liability Company (LLC).
Unlike other business entities, an LLC has no restrictions on the types of activities it can undertake, the number of shareholders, or the amount of authorized capital. Shareholders are only liable up to the amount of their contributions to the capital. Both individuals and legal entities, whether residents or non-residents (foreigners), can establish an LLC under the same terms.
This form allows foreign founders to achieve their main goals without complex additional formalities.
For a long time, the legal regulation of LLC activities was based on outdated provisions of the Ukrainian Law on Business Companies from 1991. In February 2018, the Ukrainian Parliament adopted a new law on LLCs, significantly updating the requirements for LLCs, particularly regarding the founding document – the charter.
Steps to Register an LLC in Ukraine:
1. Decision Making
- Drafting the minutes of the founders’ meeting or the decision of the sole founder on the establishment of the company and preparation of the necessary documents.
At this stage, you need to determine:
- Company Name:
- The name can include information about the purpose, type, method of business activity, dependency on other organizational units, and other information as per the legal requirements.
- The name must be in the official language but can also be in other languages.
- Before registration, check if the chosen name is already in use to save time and resources.
- Legal Address of the Company:
- Typically, this is the actual place of business or the office from which daily operations are managed. It can also be an official address (virtual office) for receiving correspondence from Ukrainian authorities.
- Founders of the Company:
- There can be one or more founders, including individuals or legal entities, residents or non-residents.
- Foreigners must obtain a tax identification number, and if they stay in Ukraine for more than 180 days a year, they need a temporary residence permit.
- Company President:
- A foreign president needs a work permit. Initially, a Ukrainian citizen must be appointed as president, who can later complete the procedure to replace themselves with the foreign founder.
- Amount and Formation of the Authorized Capital:
- Contributions can be in the form of money, securities, or other assets. Contributions must be fully made within six months of the company’s state registration.
- Types of Business Activities:
- Ensure the selected activities are permissible under the chosen tax system and obtain the necessary permits (licenses, patents, etc.) after registration.
- Company Tax System:
- By default, the LLC is registered under the general tax system. Applications for VAT or simplified tax system must be submitted separately or with registration documents.
2. State Registration of the Company
- Holding the General Meeting of the Company and adopting the founding documents.
- Notarizing the founding documents. A translator is required for non-Ukrainian speakers.
- Obtaining the registration certificate of the company.
- Creating the company seal.
3. Opening a Bank Account and Paying the Authorized Capital
- Signing bank cards and necessary documents for opening an account (personal presence required for signatories).
- Receiving a certificate of account opening and payment of the authorized capital (for foreign transfers, specify the purpose of payment – capital contribution).
- Obtaining electronic keys for submitting electronic reports.
All documents in a foreign language must be officially translated into Ukrainian and properly notarized.
Establishing an LLC in Ukraine is not a lengthy process but requires careful preparation of all documents, especially for foreign founders. Any mistakes can prolong the registration process and incur additional costs for document compliance and notarization.
Suggested related links about Establishing a Limited Liability Company (LLC) in Ukraine: – Invest in Ukraine – Kyiv Post – Baker McKenzie – PwC – ePravda – Deloitte – KPMG These resources can provide comprehensive information that would be useful for someone looking to establish an LLC in Ukraine.