Company Law

To better understand why a LLC is the most optimum choice for most small to mid-size businesses, refer to our article titled Business Structures in Ukraine. If you have chosen a LLC as your business structure, this article will help you understand the requirements and procedure for incorporating this entity. According to Ukrainian law, a legal entity is created from the moment of its registration in the Unified State Registry of Legal Entities, Private Entrepreneurs and Public Formations (hereinafter – the Companies Register). Starting from 2016, registration of a LLC company in Ukraine can be performed by any one of the following authorities: Executive committees of municipal city councils Notaries (public or private) Accredited by Ministry of Justice of Ukraine public legal entities Online (still a pilot program and work in-progress).

Shareholders. LLC must have a minimum of 1 and a maximum of 100 shareholders. The shareholders can be individuals or corporate entities and either local or foreign individuals/entity.

Directors. Directors can be one or more individuals (can be either local or foreign individuals, the latter have to obtain work permit and temporary residence permit). Corporate directors are not permitted. Directors are appointed by shareholders via a general meeting of shareholders.

Company Secretary. Appointment of a Company Secretary is not required.

Registered Address. Each company must have a local registered address in Ukraine which acts as the place of office, management of the company and from where company conducts its activities.

Share Capital. Share capital has to be formed, but there is no minimum share capital required so minimum amount is 1 UAH.

Registration Cost and Timeline. Government registration of a LLC is free of charge and the registration can be generally completed in 1 working day once the necessary documents are ready.

Governance. A LLC is governed by the following bodies: General meeting of shareholders (“GMS”) – the main decision-making body which has powers to resolve all issues Board of directors as elected by the GMS. Reserve Commission (in case you have at least 3 shareholders)

Transfer of Shares. Shares can be freely transferred subject to the priority rights as described in the company charter. A LLC requires that all shareholders to be listed in the company charter. Therefore any change in shareholders requires amendment to the company charter.

Employment Agreements. Can be either in written or verbal form. Employment of foreign citizens can be only in written form. The general rule is that employment of foreign citizens requires work permit and temporary residence permit (unless foreign individual has obtained a permanent residence permit)

Corporations doing business in Ukraine are required to take into account and comply with Ukrainian corporate compliance management standards. These standards vary depending on the industry or the customer base of the company. Our corporate attorneys can explain which regulations are relevant to your business and can help you set up policies and procedures to satisfy said regulations. And, as needed, Marzoni can audit existing policies and procedures to ensure ongoing compliance.

Whenever a company intends to purchase or sell a corporation, restructure or reorganize itself or engage in other major transactions in Ukraine, thorough legal preparation at an early stage is essential to success. Drawing on years of experience and expertise, our corporate attorneys can advise you on all aspects of major transactions, restructuring or reorganizations, including M&A due diligence reviews. If other areas of law are implicated, our corporate attorneys will also work with our in-house specialists for employment law, tax law or banking & finance to ensure that all relevant legal issues are properly addressed.

The liability of managing directors as well as members of executive and supervisory boards is and continues to be a major issue because an increase in legislative measures intended to more closely regulate corporations. Our corporate attorneys can advise on all aspects of director and supervisory board liability – both as regards preventative measures as well as litigation representation both in and out-of-court.

• Support and advice for companies new to the Ukrainian market, including the selection of an appropriate Ukrainian legal form,
• Advice on Ukrainian immigration law and complete support with all aspects of applying for Ukrainina visas and residence and employment permits,
• Mergers with, and acquisitions of, Ukrainian companies,
• Sales of Ukrainian subsidiaries,
• Counsel and advice on regulatory compliance with respect to all relevant Ukrainian tax and financial laws, including regulatory rules for banking & finance,
• Counsel and advice on all dealings and interactions with ukraininan financial authorities,
• Compliance audits and preparation of compliance programs,
• Negotiation and drafting of business agreements and general terms and conditions,
• Drafting of contracts with suppliers, employees and other business partners,
• Handling all issues related to Ukraininan employment law,
• Licensing and sublicensing of copyrights and trademarks,
• Guidance regarding the marketing of products in Ukraine, including franchising options,
• Examining business websites for compliance with Ukrainian media and internet law,
• Business litigation services, including defense against lawsuits or the pursuit of claims against other parties, in all courts throughout Ukraine.

Set up company in Ukraine | Start company in Ukraine

Registration of an company with foreign founders (participants) in Ukraine.

The basic cost is 150 USD

Duration:  is 3-5 days.

On the territory of Ukraine, any foreign legal entity or an individual can be the founder of any enterprise (company). There are neither restrictions on the size of the statutory fund, nor on the composition and number of founders.

We recommend set up enterprises with foreign founders in the form of a limited liability company.

The complex of services for the registration of an enterprise (LLC, company) with foreign founders includes following services:

–        Advising on the possible options for taxation ;

–        Help in selecting the name and its eligibility;

–        Preparation and printing of documents;

–        Registration in the state register with payment of fees;

–        Registration in the Pension Fund;

–        Registration at the tax inspection;

–        Assistance in the selection of the KVED 2012 (classification of the type of economic activity);

–        Assignment of the KVED 2012 and its registration with payment of fees;

–        Obtaining permission for the official stamp of the enterprise;

–        Production of the stamp;

–        Assisting the client with opening an account at the bank;

–        Registration of the bank account with the tax inspection;

–        Unblocking a bank account.

Duration of the registration: 3-5 business days.

Documents to be submitted by the foreign founders:

1. Individuals must provide a copy of the passport. If a foreigner has a tax code assigned in Ukraine, a copy of the assignment certificate is provided. If the future founder is not assigned a tax code, then it must be obtained before the start of the procedure of the enterprise registration. The procedure for assigning a tax number takes from 5 to 7 business days and costs 500 UAH ($ 60). The future founder does not need to travel to Ukraine in order to open an enterprise (LLC, company) in his name. He can issue a power of attorney and all procedures will be performed on his behalf.

2. A legal entity must provide:

–        A document that confirms the fact of registration of a foreign company. Depending on the legislation of the country in which the company is registered, this may be the following documents: Certificate of registration or extract from the judicial (commercial) register;

–        A power of attorney for a person who is authorized to perform all activities related to  theregistration.

The taxation system in Ukraine, which applies to enterprises with foreign founders.

Enterprises with foreign founders are obliged to pay taxes in the same amounts and at the same time as any other legal entities in Ukraine. For such enterprises, there are no tax privileges, but, at the same time, there are no additional tax burdens.

The tax system in Ukraine is divided into two main categories: the general taxation system and the simplified taxation system.

The general system of taxation.

Enterprises that are assigned to the general taxation system must pay income tax and value added tax.

The basic rate of income tax for all types of enterprises, (incl.  foreign founders)  is – 18% from 01.01.2014.

The basic rate for the value-added tax is 20%.

Tax benefits for enterprises with foreign founders.

As oftoday there are no privileges for such enterprises.

Simplified system of taxation.

Any enterprise,  (incl. one with foreign founders ), can switch to a simplified taxation system. (may be a subject to certain restrictions)

A simplified system of taxation implies the payment of a single tax. Details on the single tax for legal entities >>>

Who can be the head of an enterprise (LLC, company) with foreign participants?

The head of an enterprise with foreign participants can be a citizen of Ukraine, a foreign citizen who has a residence permit in Ukraine or a foreigner who has obtained a work permit in Ukraine.

It should be noted that you can obtain a work permit only after registering an enterprise in which, at the time of registration, a Ukrainian citizen is appointed as a director. After obtaining a work permit for a foreign citizen, a citizen of Ukraine is dismissed and a new foreign founder is appointed.

In what currency can foreign investments be made?

Foreign currencies can be submitted by a foreign founder as an investment, if the preferred currency is attributed to freely convertible currencies. Today, such currencies include:Australian Dollar, British Pound, Danish Krona, US Dollar, Icelandic Krona, Irish Pound, Canadian Dollar, Norwegian Krone, Swedish Krona, Swiss Franc, Japanese Yen, Euro.

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