If you decide to start a business in Ukraine, you have to register. If you are serious about opening a business in Ukraine, you first have to decide whether you will act as an individual entrepreneur or a legal entity. Business registration is regulated by Ukrainian law, and businesses should be registered with the tax authorities in the same area where your office will be located or where your residence is registered if you are a foreigner (for individual entrepreneurs).
Even if a person is already registered as an individual entrepreneur in his or her native country, it is necessary to register in Ukraine, too. If you already registered as a legal entity abroad and want to open a representative office in Ukraine, you have to submit an additional document – an extract from the register of foreign legal entities in the country of origin or any other similar document confirming the legal status of your company. To open a representative office in Ukraine, a foreign legal entity needs a special permit from Ukrainian Chamber of Trade and Industry. Registration is done by the State Registration Chamber. There are lots of legal firms providing their services on such registration and the fee for the service varies from 3000 to 4000 UAH (depending on a region of registration). And the term of registration usually takes at about 2 months.
Let me go into further detail and compare the status of a legal entity with that of an individual entrepreneur. If you are a for-profit organization, you should be familiar with the forms of incorporation under the Ukrainian law. These include the ZAO (closed joint-stock company), OAO (open joint stock company), and OOO (limited liability company), to most common types of companies. For example, to register OOO in Kyiv will cost you at about 2500-3000 UAH and the term of registration is 2 weeks.
In Ukraine, the most popular form of incorporation is a limited liability company (Ukrainin acronym is OOO). The creation of a limited liability company does not necessarily lead to a securities issue, and such companies are easier to manage, which differentiates them from joint stock companies. This form of incorporation is most popular with small and mid-sized businesses. It is similar to the LLC in the US, the PLC in Britain. You should also be aware that you may choose the name for a legal entity to be registered, but if you are an individual entrepreneur, you can only register using your own name. However, if you don’t fear the legal risk potentially resulting from errors on the part of your employees, or if you don’t expect daily cash operations, you can register as an individual entrepreneur. This type of structure has the advantage that it is much easier to close. But closing of a legal entity will take a lot of time and efforts as for a foreigner so as for any Ukrainian.
What documents are needed for business registration? To register as an individual entrepreneur, you need an application for state registration; a copy of your ID; a copy of your birth certificate; a copy of a document confirming your right to reside in Ukraine temporarily or permanently; a document confirming your residential address; and a receipt for payment of the registration fee (at about 120-150 UAH). E.g. in Kyiv to register as an individual entrepreneur will cost 1500 UAH, but in regions and other cities it’s cheaper.
The same documents are needed to register an OOO, plus a resolution to create an OOO, foundation documents (Articles of Association and a Memorandum of Association if there are two or more founders), and a receipt for payment of registration fees.