Ukraine is an eastern European country sharing borders with Russia, Poland, Slovakia, Hungary, Romania, and Moldova. The capital Kyiv is also the largest city in the country. The total population of Ukraine is approximately 42 million.
Ukraine has a rich culture and history that reflects in its traditions, literature, and society. Since its independence from USSR, Ukraine has gone through many political and economical reforms. However, the dispute over Crimea and the ongoing conflict with Russia has drastically hindered the country’s growth and led to failure to achieve its full potential.
Types of business structures in Ukraine
In Ukraine, there are several types of business structures that entrepreneurs can choose from depending on their needs, goals, and resources. The most common business structures in Ukraine include:
| S# | Type of business structure | Local name | Min.paid-up capital requirement |
| 1. | Limited Liability Company | Товариство з обмеженою відповідальністю (TOV) | €1 |
| 2. | Joint Stock Company | Акціонерне товариство (AT) | €3,500 |
| 3. | Sole Proprietorship | Фізична особа-підприємець (FOP) | No minimum paid-up capital required |
| 4. | Partnership | Товариство з обмеженою відповідальністю (TOV) | No minimum paid-up capital required |
Limited Liability Company (LLC)
This is the most popular business structure in Ukraine. An LLC is a legal entity with one or more owners who are not personally liable for the company’s debts and obligations beyond their investment in the business.
Joint Stock Company (JSC)
A JSC is a type of business structure where ownership is divided into shares, and shareholders are liable only to the extent of their investment. JSCs can be public or private and have different requirements for registration and reporting.
Sole Proprietorship
In a sole proprietorship business structure, a single individual owns and operates the business. The owner is personally liable for all the debts and obligations of the business.
Partnership
A partnership requires more than one person to form a company, a single person can not enter into partnership with him/herself. Partners may contribute equally or in any way deemed fit. Limited partners’ liabilities are limited to the extent of their investment, while general partners assume full responsibility in case of debt or loss.
Cost involved in registering and incorporating a company in Ukraine
The cost of registering and incorporating a company in Ukraine can vary depending on the type of business structure and the specific requirements for each case. Here are some of the typical costs associated with registering a company in Ukraine:
Legal and Accounting Fees
Entrepreneurs in Ukraine typically engage lawyers and accountants to help with the registration process. Legal fees can range from €130 to €500 depending on the complexity of the registration process and the scope of legal services required. Accounting fees can range from €25 to €150 for the initial setup and registration.
State Fees
The State Registration Service of Ukraine charges a fee for registering a company. The fees can vary depending on the type of business structure and the number of founders. For example, the state fee for registering an LLC with one founder is €30, while the fee for a JSC with five or more founders is €300.
Notary Fees
Notary fees are required for certain documents, such as powers of attorney, that need to be certified and notarized. These fees can range from €2 to 500 €15UAH per document.
Translation Fees
If any documents are in a language other than Ukrainian or Russian, they must be translated into Ukrainian by a certified translator. Translation fees can range from €2 to €7 per page.
Overall, the total cost of registering and incorporating a company in Ukraine can range from approximately €250 to €1,500 depending on the specific requirements and circumstances of each case.
Operational costs of business in Ukraine
The cost of doing business depends on a number of factors, including the industry, location, and size of the business.
Some of the typical costs associated with doing business in Ukraine are as follows:
Taxes
Ukraine has a flat income tax rate of 18% for individuals and corporations, with some exemptions and deductions available. There are also other taxes and fees, such as value-added tax (VAT), social security contributions, and local taxes, that businesses may be required to pay.
Labor Costs
The cost of labor in Ukraine is generally lower than in many other European countries but can vary depending on the location and industry. The average monthly salary in Ukraine is around 12,000 UAH (~$430 USD), but can be higher in cities and certain industries.
Real Estate
The cost of renting or buying commercial property in Ukraine can vary depending on the location and size of the property. In major cities like Kyiv, commercial real estate prices can be relatively high compared to other regions.
Utilities
The cost of utilities such as electricity, gas, and water can vary depending on the region and usage. Generally, prices for utilities in Ukraine are lower than in many other European countries.
Transportation
The cost of transportation in Ukraine can vary depending on the mode of transportation and distance traveled. Public transportation in cities like Kyiv is relatively affordable, while taxis and private transportation can be more expensive.
Business Licenses and Permits
Depending on the industry and location, businesses in Ukraine may be required to obtain various licenses and permits to operate. The costs for these licenses and permits can vary depending on the type and complexity of the business activities.
Overall, the cost of doing business in Ukraine can be relatively affordable compared to other European countries but can vary depending on the specific circumstances of each business. It is important to research and understand the costs and requirements associated with doing business in Ukraine before starting or expanding a business in the country.
Economic environment of Ukraine
The business environment of Ukraine is a mix of challenges and opportunities. Here are some key aspects of the business environment in Ukraine:
Political Environment
Ukraine has experienced political instability in recent years, which can create uncertainty for businesses. However, the country has made progress in implementing reforms aimed at improving the business climate and attracting foreign investment.
Legal System
The legal system in Ukraine can be complex and unpredictable, and corruption is still a problem in some areas. However, recent reforms have aimed at improving the legal framework for businesses and addressing corruption.
Access to Capital
Access to capital can be a challenge for businesses in Ukraine, particularly small and medium-sized enterprises (SMEs). The banking sector has undergone significant reforms in recent years, but lending rates can still be high and collateral requirements can be strict.
Workforce
Ukraine has a well-educated and skilled workforce, particularly in IT and other high-tech industries. However, wages can be relatively low compared to other European countries, and there can be a shortage of skilled workers in certain industries.
Infrastructure
Infrastructure in Ukraine can be outdated and in need of modernization, particularly in the transport sector. However, the country has made progress in recent years in improving infrastructure, including through public-private partnerships.
Market Opportunities
Ukraine is a large and growing market with a population of over 40 million people. The country has a diverse economy with opportunities in sectors such as IT, agriculture, manufacturing, and tourism.
In recent years, the overall business environment in Ukraine has improved, however, the challenges remain. Primarily the conflict with Russia has badly damaged the economic fabric of Ukraine; hopefully, things may change once the situation normalizes.
