Set up a company in Ukraine in 2017

Here we describe the process of registration of LLC as the most common and practical form of legal entity in Ukraine.

LLC (Limited Liability Company) - is the company share capital of which is divided into stakes/shares between shareholders; there is no securities issued in LLC. The number of founder/ shareholder in LLC can be the one and up to 100. There are no minimal share capital amount requirements, so it can be any amount (contributions into share capital can be made also in material form or it can be rights etc.), which is by law should be contributed into share capital during a year after registration. Responsibility of LLC shareholders is limited to their contributions, so they are not responsible by their personal assets for debts of LLC.

The registration procedure of the LLC is the following:

1. First step is to choose name of the company and to check it online in Ukrainian language here LLC can also have its name in other languages; the English version of the name can be listed online.

2. You decide on activity types, choose up to 20 types of activity types and the main one. They are listed here.

3. You decide on shareholders structure, percentage of their contributions into share capital of LLC, the person of director. Director is the elected position. The main body of LLC is shareholders meeting, which can decide on main strategical matters of LLC and elect director. Director is the one who operates LLC, open and operates LLC bank account. The director can be Ukrainian resident or non-resident on condition of work permit obtaining. In the latter case company is being registered with Ukrainian director, then company obtains work permit and then director is to be changed in state register.

4. Decide on taxation system:

- Common system without VAT. Company profit tax is 18 %, paid annually.
- Common system (18 % annually) with VAT (obligatory in case the VAT taxable operations for 1 mil. UAH during a calendar year). VAT rate is 20%.
- Simplified system without VAT– 5 % from income (not from profit, but all LLC gains on the account). Applicable to small and medium businesses (income up to UAH 5 million per year and some other criteria)
- Simplified system 3 % with VAT 20 %.

5. Choose legal address: this can be shareholder’s place of living (resident with registered address) or any office address. No need to prove the place of business by documents at the moment.

The company may have Articles of Incorporation – printed document, constituted by law requirements, sighed at notary public. Or it may have so called “Model Articles”, which means company operates according to Model Articles which is regulation, issued and changed from time to time by Cabinet of Ministers of Ukraine. The Model Articles are available here
The option with Model Articles is more practical.

After the above information is gathered, the founding documents are to be made: Minutes of General Meeting of Shareholders #1, Articles of Incorporation (or without it in case of Model Articles implication).

The founding documents are to be submitted to state registrar (or notary public who is also entitled to provide functions of state registrar) and company becomes registered in tax inspection and as tax payer and as social contribution payer in few days after.

The state registrar is issuing Extract from State Registrar as the document on company registration.
The next steps are registration in tax as VAT and/or simplified tax payer if applicable.

The final step is opening of bank account. For this director should first visit notary public to certify his signature on bank card. Along with the card the bank usually requires registration document (Extract from State Registrar) and company owners structure.

The documents to be provided for registration from the non-residential founders:

- Power of attorney (POA) from behalf of the founder, either legal entity or individual. Usually the POA includes the powers to register LLC documents, to apply and obtain documents.
If the founder is individual, he additionally authorizes representatives to obtain tax code for him, which is necessary to include in application for registration of LLC.
The shareholders may authorize representatives to sign the foundation documents: Minutes of the General Meeting of Shareholders on behalf of them in the POA. This is necessary if the shareholders themselves are not physically present in Ukraine to sign the founding documents.

- An Extract from commercial/court/banking registry issued in the country of the founder confirming the state registration of the company-founder*

- Information about beneficial owners of LLC* – individuals which are owners of company - founder of LLC: names, birth date and passport information of the individuals.

The POA and the Extract should be legalized or apostilled in the country of their issuance. For some countries notarization is enough procedure of document validation. Information about procedure of validation of documents from your country you may find here.

* Applicable when the founder of LLC is non-residential company.

  • Category: CORPORATE
  •  Viewed: 660
  • Date: 29 August 2017