Why Setup an LLC (Limited Liability Company) in Ukraine

Ukraine is bordered by Belarus to the north, Russia to the east, the Sea of Azov and the Black Sea to the south, Moldova and Romania to the southwest, and Hungary, Slovakia, and Poland to the west.

Situated between two big economic blocs, the European Union and the Eurasian Economic Union, Ukraine is the second biggest country in Europe after Russia.

The currency of Ukraine is the Hryvnia (UAH).

Ukraine has been ranked on the 71st place among 190 economies in the ease of doing business, according to the latest World Bank annual ratings.

Since January 1, 2016, Ukraine is part of the European Union’s free trade zone, which obligates the EU to provide it with a higher level of economic assistance.

Limited Liability Company – Ukrainian TOV

LLC is the most common form of legal entity in Ukraine. More than 90% of legal entities in Ukraine are limited liability companies.

In Ukraine, the limited liability company is a form of business established by small businesses as the maximum number of shareholders cannot exceed 10 and the provided minimum share capital consists of minimum 100 minimum salaries at the moment of registration.

There must be at least 1 shareholder and corporate Shareholders are permitted. Foreign ownership is allowed, up to 10% of the ownership of the legal entity.

A legal entity is only required to have 1 director on the board. Directors should not have an expectation of privacy, as they are not kept private in Ukraine. The rights and obligations of Limited liability company Director (CEO) are imposed by articles of association (charter).

There is a requirement to have annual meetings of shareholders. An LLC does not typically require a financial audit unless it is specifically demanded by a shareholder holding at least 10% of the capital.

The value-added tax (VAT) rate is 20.00%, which ranks Ukraine as 134th overall with regards to VAT globally.

VAT is imposed on domestic sales of goods and/or services, imported goods or services.

A reduced rate of 7% is applied to the supply and import of registered medicines and specific medical
goods. For export of goods and other services defined by law, 0% rate applies under special
conditions.

Provision of services to a non-resident are subject to 20% VAT or it can be considered as an outside
the scope of VAT, depending on the place of supply.

Furthermore, the Corporate income tax is currently levied at 18%.

Ukraine is a signatory to a Treaty for the Prevention of Double Taxation with many countries all over the world. Ukraine is a potentially attractive country for virtually any kind of business since it has an available large-scale domestic market and a developed transport infrastructure.

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