Top Tips for Doing Business & Investing in Ukraine


Following the recent reforms and closer ties with West, Ukraine is gradually becoming an attractive, albeit still difficult, the place to do business and invest for the foreign business community. Regardless of the still weak political, legal, and financial climate in the country, Ukraine has an excellent geographic location, the largest territory in Europe, rich natural resources, and a low cost but skilled workforce.

Ukraine’s confusing regulatory regime, ever-changing regulations, and significant red tape can cost foreign investors significant money and time. In our experience, every day we encounter front-facing government staff, bank representatives, private consultants, and notaries who are not aware of the latest changes and provide incorrect information.

But these challenges are by no means insurmountable, the savvy entrepreneur can easily find his/her way past to make some great investments. Here’s a list of business tips for any foreign individual exploring doing business or investing in Ukraine. Note that law and regulations change frequently, therefore always consult for the latest updates before making any decisions!

Personal Bank Accounts

As a foreign national (resident or non-resident), you are allowed to open the following types of personal bank accounts in Ukraine:

  • Regular current and savings accounts in the local currency UAH and selected foreign currencies.
  • An Investment Account that allows foreigners to make investments into Ukraine and subsequently repatriate profits and capital out of the country.

Keep the following points in mind when opening and operating your bank account in Ukraine:

  • Rules for bank accounts vary depending on the type and are strictly regulated by Ukrainian Banking law. For example, you are not allowed to withdraw cash from your investment bank account (whereas it is possible from a regular current bank account). Therefore, use the type of bank account that corresponds to your planned purpose and transactions.
  • While you are free to deposit money into these accounts from overseas and bonafide local payments, cash withdrawals in foreign currency as well as overseas transfers are subject to certain limits at present (depending on types of bank account and transaction). These restrictions are a result of the currency controls imposed by the government mainly because of the political and economic crisis that started in 2013 and still lingers today. They apply both to businesses as well as individuals, although the specific rules may vary.
  • You can use your debit card (linked to your regular current account) when making purchases overseas as well as withdraw cash, subject to certain limits.

Starting a Company

While there are a number of different business structures available in Ukraine, the most suitable limited liability structure for a small- to mid-sized business in Ukraine is a Limited Liability Company (LLC). Both resident and non-resident foreigners are free to incorporate a LLC and can be 100% shareholders of the company. Points to note when opening a LLC:

  • The process of incorporating a Ukrainian company is fairly straightforward and can be completed in 1-2 working days after all the necessary documents are ready.
  • Prior to registration of an LLC, foreign shareholders need to obtain a Ukrainian tax number.
  • The director of an LLC can be only an individual who has right to reside in Ukraine (a citizen of Ukraine, or a permanent citizen or foreign individual who has obtained a work and residence permit in Ukraine). Corporate directors are not permitted.
  • A Ukrainian company must have a local registered address.
  • Foreign entrepreneurs who wish to relocate to Ukraine to operate their company can apply for relocation visa (work permit & residence permit), which is subject to approval by authorities.

It’s important to work with a knowledgeable and competent corporate services provider that knows the latest regulations to ensure the accuracy and timeliness of the work done.

Work and Residence Permits

Work permits and residence permits are two different permits issued to foreigners. With the exception of few situations, both permits are required when relocating to operate or work for a company in Ukraine. Keep in mind the following:

  • Foreign entrepreneurs who have opened their LLC company in Ukraine will need to apply for both permits if they wish to relocate to Ukraine. The same is true when the LLC is hiring other foreign staff.
  • Certain categories of foreign citizens (such as permanent residents of Ukraine, employees of representative offices and permanent establishments of foreign companies, representatives of foreign mass media, professional athletes, artists and some others) do not need to apply for work permits when working in Ukraine (but they still need to obtain residence permits). However, in most other cases, a valid work permit is required before commencing work.
  • The processing time for a work permit application is about 1 month.
  • After the work permit application has been approved, the permit holder must obtain a temporary residence permit if he/she plans to relocate to Ukraine to work. Family members are also eligible to obtain the temporary residence permit.
  • Obtaining a residence permit takes up to 15 days upon application.
  • Both work permit and temporary residence permit applications are subject to review and approval by government authorities. However, under valid grounds, there should be no problem with the approval process.

Buying Real-Estate

Due to attractive prices in the current Ukrainian real-estate market, foreign investors are increasingly interested in purchasing residential property here. However, the real-estate market in Ukraine is not very mature and therefore often fraught with significant difficulties and risks at almost every step of the transaction. It’s extremely important to work with a knowledgeable and trustworthy legal advisor when dealing with real-estate in Ukraine.

Here are some basic guidelines:

  • It is important to perform the deal and payment strictly in accordance with Ukrainian Civil, Banking and Investment law to avoid future difficulties with repatriation of investments and investment income.
  • Proper due diligence as well as proper legal planning and examination of real-estate transactions are crucial while investing in real-estate in Ukraine due to risk of fraud.
  • The commission of real-estate agencies is typically around 3–5% from the real-estate purchase price, payable only if the deal is concluded. Real-estate agencies are not regulated and do not require a license to operate. Therefore, we highly recommend that you also use an independent real-estate legal advisor to assist you with proper advice when buying property in Ukraine.

Paying for Investments

Foreign nationals are allowed to pay for their investments in Ukraine (opening a business, buying real-estate or other type of investment) in two possible ways:

  • Directly from their account overseas (in this case, payment is made in foreign currency); -or-
  • By opening an investment bank account in Ukraine. In this case, the foreign national must transfer money in foreign currency to the investment account, convert it to local currency hryvna (UAH), and then pay for the investment in the local currency. Note that an investment account is the only type of bank account in Ukraine for foreign individuals that allows them to make settlements for their investments.


Tax rate in Ukraine depends on the type of taxpayer and her income. The base tax rates are listed below:

  • Corporate tax rate: 18%
  • Individual income tax rate: 18% plus 1.5% military tax
  • Social security tax: 22% (applicable as part of payroll tax)
  • VAT: 20%
  • Individuals registered as Private Entrepreneur (similar to Sole Proprietorship in other countries) and listed under the Simplified Tax Scheme (3rd Group): 3–5%

Note that the Ukrainian tax code defines specific rates for certain types of income or transactions which can be different from the ones mentioned above. In addition, some types of income/transactions are exempt from taxation. Therefore, to define applicable tax rate for each specific case, it is important to get professional advice.

Getting a Ukrainian Tax Number

As a foreigner, if you are planning to work, invest, or start a business in Ukraine, most likely you will need to obtain a Ukrainian tax number. Therefore, it’s usually a good idea to get this done as soon as possible. If you are overseas, the application for tax number can be filed by your representative in Ukraine under a Power of Attorney. The application processing time is about 5 working days.

Hiring Staff

In Ukraine, a company can hire people either under labour agreement (i.e. as a salaried employee) or under civil services agreement (i.e. as a freelancer, provided the person being hired is registered as a Private Entrepreneur (PE)).

If hired as a salaried employee, the company should assume roughly 40% tax overhead on top of the salary in-hand to the employee. On the other hand, in a freelancing arrangement, the salary tax burden is approx. 5%. As a result of this anomaly, many companies tend to reduce their costs by arranging staff as a mix of freelancers and full-time staff. However, such a structure requires careful tax and legal planning in order to avoid getting on the wrong side of the law.

Mistakes in Documentation

This is the last tip we have for you today, but it is certainly not the least! Unfortunately in Ukraine, you will often find that important agreements and documents that are prepared for you may contain misprints and errors. This can be caused by a number of reasons including lack of professional quality controls, lack of use of computer technology and automation or overworked staff.

What should you do? A simple solution is to presume that the documents have errors and have them double-checked by your trusted local professional advisor.

Related Resources

Here are some additional resources that you might find useful:

For further information, please contact us.