What Is the Best Option for a Foreign IT-Specialist to Work in Ukraine? Sole Proprietorship or Employment?

Thanks to a comfortable tax background and the general low cost of living, Ukraine over the past few years has become an attractive destination for foreign entrepreneurs wishing to move and work in its territory.

First of all, it concerns representatives of the IT-sector, who are free to work in Ukraine in their specialty, paying only 5% tax rate as a single taxpayer, while in other countries they would have to pay 16-20% tax.

Moreover, for the last few years Ukraine has been offering IT specialists an opportunity to get a Permanent Residence Permit in Ukraine under relaxed rules, compared to representatives of other professions. This procedure is called getting a Permanent Residence Permit under a quota for IT-specialists. Read more about the quota and how to use it here.

Today, we will talk about more pressing questions — how to organize your working activity in Ukraine as an IT-specialist.

If you want to understand what would be more beneficial for you — please contact our experts for personal consultations.

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When is it better to choose the sole proprietorship to work with IT projects in Ukraine?

Let’s say right away that Ukrainian IT-specialists mostly prefer to work as sole proprietors. This is facilitated, firstly, by the tax rate of 5% for payers of the single tax, and secondly, gives the opportunity to cooperate with a large number of customers and different IT projects.

It’s also worth noting that companies specializing in large IT-projects prefer to cooperate with specialists under civil law contracts, especially if the company receives orders for software development and other projects from foreign contractors.

Thus, the registration of a sole proprietorship for a foreign IT-specialist in Ukraine is very profitable. But it involves a few nuances to consider.

Firstly, the sole proprietorship does not give you the right to obtain a Temporary Residence Permit in Ukraine, which means that you have only two choices:

  • If you want to work and live in Ukraine, you need to obtain a Temporary Residence Permit or a Permanent Residence Permit in Ukraine on any other grounds;

  • You can work as a sole proprietor in Ukraine, but you have to leave the territory within the period prescribed by law (standard term of stay in Ukraine for foreigners is 90 days).

In this situation, a good option may be applying for a Permanent Residence Permit. Please remember that Ukraine has quotas and special rules for obtaining a Permanent Residence Permit for IT-specialists. The advantages of this option will be as follows:

  • No binding to a specific place of work —you can freely choose the job or work as a sole proprietor;

  • Long-term permit — the Permanent Residence Permit is issued for 10 years with the possibility of renewal.

However, this type of Permit also has disadvantages:

  • The period for obtaining a Permanent Residence Permit from the date of submission of documents is 1 year. During this period, you can stay in Ukraine only for the allowed number of days according to the general procedure;

  • You must meet the requirements established for quota representatives.

If one year is too long for you, you can consider a Temporary Residence Permit in Ukraine. This permit is issued much faster — within a couple of months, if you have grounds for a Temporary Residence Permit. The most common grounds are marriage, relatives in Ukraine, employment, or work in a public organization.

If you have no legal grounds for obtaining a Temporary Residence Permit in Ukraine, you can always use an option of starting a company here. You register a company in Ukraine, become a director (with minimum maintenance costs per month), and get a Temporary Residence Permit on the basis of the Work Permit.

You don’t need to be paid a salary as a director, and at the same time you can register a sole proprietorship and work with your beneficial counterparts. 

The cost of obtaining a Temporary Residence Permit without grounds can be found here.

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When is it better to choose official employment for a foreign IT-specialist in Ukraine?

Official employment in Ukraine with residence in its territory is possible in the following cases:

  • You have a work invitation from a Ukrainian IT company, which will be your future employer. Having obtained a Work Permit at its request, you get the right to apply for a Temporary Residence Permit in Ukraine;

  • You have a Permanent Residence Permit in Ukraine —then, as we have said before, you can safely obtain employment at any company in Ukraine of your choice.

Is it more profitable for an IT-specialist to work as a hired worker in Ukraine? If there is such a possibility, it is up to the specialist. Official employment is not so widespread in the field of IT, because many prefer to work under contracts. But on the other hand, official employment for many people is synonymous with stability and security.

The period of obtaining a Work Permit in Ukraine, if you have an invitation from a Ukrainian company, is from 7 to 10 business days. Please check the price here.

Our company has already helped many IT-specialists to legalize their stay in Ukraine and to successfully start their economic activities on its territory. We not only help to obtain a Work Permit and residence permits, but also provide consultations on tax optimization, marriage, real estate purchase and other aspects of your safe and comfortable life in Ukraine.

Do you want to move to Ukraine and continue your business activity here in the IT-sector? Don’t hesitate to contact us! We will not only find the best way for you to organize your activity, but also help you put your plans into reality.

Didn’t find an answer to your question?

Find out if you can emigrate to Ukraine within quotas of IT-specialists here.

Everything about the procedure of obtaining a Temporary Residence Permit in Ukraine here.

All services for non-residents and consulting fees here.

Publication date: 22/09/2021

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