Registration of company (LLC) in Kiev, Ukraine

The Main Stages and Mistakes of Registering a Company in Ukraine

Preparation Stage: This involves more than just drafting the articles of incorporation and protocol of creation. It also involves selecting a tax system, deciding on the optimal amount of authorized capital, and distributing shares among founders. Sometimes, it's better to have separate founders and investors. 

If foreign citizens or legal entities will be among the founders, that's a separate issue altogether. Certain documents must first be prepared in the country where the foreign founders are located. The most common mistakes at this stage are incorrect certification of documents or an incomplete set of documents sent to Ukraine. Also, mistakes can lead to significant currency costs.

Document Development: Ukrainian legislation often changes. The most common mistakes are outdated document templates. Using a template from the internet is probably the worst idea that could come to mind. Documents for company registration in Ukraine are developed in several copies.

Submission of Documents for Registration: If one document is missing, the registration will not take place. In addition, foreigners often do not know that, without a tax identification number in Ukraine, it is impossible to become a company founder. And if a foreigner is going to be a manager, a work permit must be obtained beforehand.

Common Mistakes When Opening an LLC in Ukraine

Some of these issues have already been covered above. The most common mistakes include using "flawed" internet document templates, not knowing exactly what needs to be submitted (such as notarized passports of ultimate beneficiaries if they are of an old format). Not to mention that for foreigners, the quest begins long before LLC registration itself, namely with obtaining a tax identification number.

It's not so difficult to download articles of incorporation from the internet and visit a registrar. However, the main question here is whether the company you register will meet your interests. The article of incorporation outlines the fundamental details of the company, including its name, purpose, and structure. Are the levers of company management outlined in the articles of incorporation as you want them to be? Are the ways of financing the company, distributing profits among participants, director's powers, etc. fixed? 

All of these issues can be anticipated with extensive experience not only in registration but also in working in the field of Ukrainian business, especially for foreigners.

Advantages of registering a business as an LLC in Ukraine

Compared to setting up a foreign company representative office in Ukraine, creating a new company (LLC) gives the company the status of a legal entity, and therefore, independence. The procedure is much faster than registering a representative office.

Online LLC registration in Ukraine

Despite the announced simplicity, in practice, it mostly doesn't work for various reasons (often the service itself is unavailable), and for foreign founders, it's generally impossible because it requires an electronic digital signature (EDS) (which is only available in Ukraine, of course).

When working with clients, our lawyers personally handle the document submission

Step-by-step instructions for registering an LLC in Ukraine

• Consider who you will be creating this company with. Remember that a 50/50 split of ownership is the most dangerous in terms of decision-making if one of the two founders loses interest in the business or stops communicating altogether;
• Choose the most optimal tax system. Remember that if a simplified system (single tax) is required, there are certain restrictions on the types of activities and even the circle of founders;
• Properly prepare a package of documents for registration, including the charter, minutes of the general meeting or the decision of the sole participant, ownership structure, copies of the passports of ultimate beneficiaries (or an explanation of why they are not available). If there are foreign individuals or legal entities among the founders, their documents must be correctly notarized in the country of issue and then translated into Ukrainian with a notarized translation;
• Submit the documents for registration. Since there are either queues or no electricity in the administrative service centers (CNAPs), we recommend submitting the documents to private notaries, although this is not free. However, it is quick and they can advise on how to correct any deficiencies if they exist;
• Collect the registration certificate;
• Open a bank account and obtain an EDS. The package of documents varies depending on the bank, but the universal package is the presence of all constituent documents. With them, the director comes to the bank - and everything else is up to the bank manager. Of course, you can make everything beautiful so that the meeting is organized and the bank is already waiting for the director. Some banks provide EDS if you open an account there. However, not all do. For the convenience of submitting reports, it's best to obtain an EDS if your bank doesn't provide it. Note: some banks provide such a key, but it is only suitable for working in the online banking of that particular bank;
• If there is a foreign citizen among the founders, they must obtain an individual taxpayer identification number (ITIN) before submitting the LLC registration.

What to choose: LLC, private enterprise, or sole proprietorship?

The choice depends on the nature of the organization's activities and the number of personnel involved. It's important to note that private enterprise (PE) is outdated and is no longer registered. The law on private enterprise lost its force years ago, and for a while, this organizational form wasn't used. However, there's no longer any point in using PE now that the differences with LLC have almost disappeared.

For most small or medium-sized businesses, sole proprietorship (SP) is usually sufficient. However, some types of activities require the creation of a legal entity like LLC, which has specific requirements for the charter and authorized capital. The main advantage of LLC is its ability to be sold quickly if there's no longer a desire to continue running the business.

Registering a company in Ukraine is often the choice of foreign investors who want to conduct their activities in the country in a controlled manner and save the currency. Additionally, LLC allows foreign directors to obtain a residence permit in Ukraine. 

Nuances of registering a new legal entity: services for starting a company

The establishment of an LLC is a complex process that requires in-depth legal knowledge and careful adherence to regulatory requirements. To open a company in Ukraine, you must comply with local registration and tax regulations. A newly created business cannot immediately opt for the third group of single tax payers with a 3% income tax rate plus value-added tax (VAT). This tax rate can only be chosen from the next quarter. From the day of registration, the business can only become a single tax payer with a 5% income tax rate.

We also offer a turnkey service for opening a limited liability company (LLC), tailored to your specific requirements. We can also assist you in obtaining any necessary licenses and permits for your activities.

Our firm provides LLC registration services in the following way:

• After the details of your order have been agreed upon, we arrange a time for signing the contract for legal services and for the transfer of the necessary documents and information to us.
• Upon receiving payment and the aforementioned information, we prepare the LLC Charter and other documents (within approximately one working day), and coordinate a meeting with the client at a notary public's office in Kyiv to issue notarial powers of attorney to our specialists and to certify the signatures of the founders on the Charter.
• In the notary public's office, the client also signs the minutes and other documents required for the company's registration. From this point on, the company will be registered within 1-2 days, and the documents will be handed over to the client for opening a current account.

Upon completion of the LLC registration process, you will receive:

• An extract - a document containing codes that allow you to view the electronic versions of the founding documents of legal entities, as well as find and download an extract from the Unified State Register of Enterprises and Organizations of Ukraine;
• One copy of the Charter;
• The minutes of the general meeting of founders;
• The company seal.

If necessary, after we have registered your LLC, our company can:

• Assist in obtaining VAT or single tax payer status;
• Help develop standard contracts for your business activities;
• Develop a website;
• Provide tax law consultations or offer full legal support for your business activities.

Our lawyers provide detailed advice on the legal requirements for company formation.
If you want to find out the cost of registering an LLC or register a business, please give us a call!

We offer legal entity registration services in Kyiv, Ukraine, and work with clients from any region!