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June 26, 2020

Limited Liability Company in Ukraine

To become more competitive on a world-wide investor map, Ukraine has significantly simplified the legislative provisions for establishing a business in Ukraine. Currently there are no dangerous curves and obstacles that could prevent foreign investors from starting a business in Ukraine.

Setting up a limited liability company (LLC) is the most common practice of foreign companies establishing their business in Ukraine. LLC offers more benefits than any other entity type. Therefore, LLC has become the entity of choice among many others.

There are the following undeniable advantages of establishing an LLC in Ukraine:

1) Limited Liability
2) Charter capital
3) Shareholders are of the utmost importance
4) Possibility to conclude shareholders’ agreements
5) Control over company’s activity
6) Simpe taxes
7) Registration is simple


1) Limited Liability

LLC shareholders are not liable for the company’s obligations and incur the risk of losses associated with the company’s activities only within the limits of the shares they own. It’s the key privilege attracting investors.

2) Charter capital

There is no minimum charter capital requirement. For instance, charter capital may be USD 1. However, it is necessary to pay your attention to the fact that the company needs initial financing (e.g., lease, salaries etc. at the very beginning) and for keeping the company alive.

3) Shareholders are of the utmost importance

LLC members could be legal entities or individuals, both residents and non-residents of Ukraine. A foreign individual, that is going to be a shareholder, shall obtain a Ukrainian tax number prior to the state registration.

Moreover, the number of LLC shareholders is not limited, no matter whether you are the only investor or you are one of 100 investors, an LLC would be a perfect match in both cases as it is less regulated and gives the investors a lot of freedom to run their own show.

4) Possibility to conclude shareholders’ agreements

Shareholders’ agreements are used as safeguards to protect the investors’ interests. They regulate the relationship between the shareholders, the company management, the shares ownership and the shareholders protection. It’s often called the constitution for the owners as the provisions of shareholders’ agreement are binding for the owners.

A shareholders’ agreement may stipulate conditions under which the shareholder is entitled or obliged to purchase or sell the share in the charter capital, as well as to determine cases when this right or obligation arises. «Control your company or someone else will», that would be our main advice to investors.

5) Control over company’s activity

The Ukrainian LLC governing bodies are the general meeting and board of directors (or a sole director). The decision-making body is the general meeting. The company’s articles of association may establish a different number of the company shareholders’ votes (but not less than the majority of votes) necessary for the adoption of decisions on the issues related to the company activities, except for decisions that shall be adopted unanimously.

LLC’s executive body responsible for day-to-day management is the board of directors or a sole director. Special attention should be paid to the fact that prior to employment, a foreign national should be granted a work permit. The company’s articles of association shall clearly stipulate the powers of the director in order to prevent abuse of power.

The supervisory board as the controlling body could be established in LLC. In particular, the supervisory board may appoint and dismiss the director, establish the remuneration to the director etc.

6) Taxes in brief

LLC may be a payer of general tax system (profit tax – 18%), VAT (20%), or simplified tax system when the Ukrainian LLC pays 5% of income (VAT included) or 3% of income (VAT excluded). However, restrictions for being registered on a simplified tax system need to be taken into account.

More information about the taxation system in Ukraine you can find in our comprehensive publication Taxes in Ukraine.

7) Registration is simple

LLC registration in the Unified State Register of legal entities, individual entrepreneurs and non-governmental organizations could be carried out within two hours. Obtaining all registration documents, opening a bank account and customs registration could take up to one week.

Simple steps required for registration:

  • Issuance of the Power of Attorney (that needs to be legalized/apostilled depending on the country of origin) for the persons authorized by shareholders to approve and sign the articles of association on behalf of the new company, to open bank accounts and to carry out registration procedures;
  • Obtaining an extract from the trade register of the shareholders – foreign legal entities, that needs to be legalized/apostilled depending on the country of origin;
  • Obtaining individual Ukrainian tax payer codes within 5 business days for foreign individuals, if they are shareholders or directors;
  • Signing the articles of association and Minutes on LLC registration. We recommend signing the articles of association in the presence of a Ukrainian notary – just to be on the safe side. In cases specified by the Ukrainian law the LLC articles of association must be approved by the Antimonopoly committee of Ukraine.

There is no registration fee providing the procedure is followed by the registrar. A fee for the notary certification could differ depending on the region and the number of signatories.

Note! Under the law that came into force on 28 April 2020, it is now obligatory for legal entities to disclose and update the information on the ultimate beneficial owner(s) and ownership structure.

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