Business in Ukraine (general information)
2 августа 2017 г.: en 1 всего: 116.02.07Total area: 603,700 sq. km
Population: ~48 million
Principal cities: Kyiv (Kiev), Donetsk, Zaporizhzhya (Zaporozhye), Dnipropetrovs’k (Dnepropetrovsk), Kharkiv (Kharkov), Lviv (Lvov), Odesa (Odessa)
Official language: Ukrainian (although in business Russian is mainly used)
Neighboring states: Russia, Moldova, Belarus, Poland, Romania, Slovakia, Hungary
Currency : Hryvnya (UAH)
Ukraine has focused long ago on closer integration with the rest of the world while preserving its traditional links with the countries of the former Soviet Union. Reflecting its importance and size, Ukraine is a member of the United Nations, the IMF, the World Bank, the EBRD, etc.
Investment policy and investment possibilities
Possible business structures and corresponding regulations
- The corporate and management structure is relatively flexible.
- A joint stock company is a legal entity whose capital is divided into a specified number of shares. There are two types of joint stock companies: "open" joint stock company and "closed" joint stock company. Shares of joint stock companies must be registered with the State Commission for Securities and Stock Exchange. n
- Limited liability companies require less complex structure. A limited liability company does not have shares. Participants in the company own a percentage of the company’s capital.
- To establish a presence in Ukraine representative offices are used although they can be engaged in business activities. The representative office does not constitute a legal entity.
- A joint venture can take the form of a company which has a distinct legal personality or an un-incorporated entity which does not.
- Concessions are allowed in certain fields for the period up to 50 years.
- Preliminary approval from the Antimonopoly Committee may be required for certain acquisitions of shares or assets.
- There is no ceiling regarding the amount of capital a foreign company invests into a Ukrainian company.
- Foreign investments must be registered with the local authorities.
- Ukraine has developed a wide double tax treaty network.
- Domestic tax treatment applies to foreign corporations and expatriate personnel.
- Dividends, interest and royalties may be freely repatriated.
- Withholding tax of 15% applies to dividends, interest and royalties, but domestic tax law is subordinated to international tax treaties.
- The principal taxes in Ukraine are corporate profits tax, personal income tax, VAT, payroll taxes, excise tax, land tax, tax on owners of motor vehicles and import duties. There are also other taxes and different local taxes that may be levied by the local authorities.
Investment protection & incentives
- Investment incentives are generally available on an equal basis for both local companies and foreign investors.
- In-kind contributions may benefit from certain tax exemptions.
- Property (except for goods for re-sale) contributed by a foreign investor to the statutory fund of a Ukrainian entity can be imported free of import duty.
- Exemption from import duties is available in respect of goods traded with ex-USSR countries.
Accounting and financial reporting and banking system
- The banking system consists of the National Bank of Ukraine and commercial banks. The National Bank of Ukraine (NBU) is the country’s central bank that leads a uniform monetary policy and performs bank supervisory functions.
- The law On accounting and financial reporting provides for National Regulations (Standards) on Accounting in Ukraine (NR(S)AU) which are intended not to contradict IAS. Overall, standards combine the concepts found in IAS, but with less interpretative guidance.
Exchange control r
- Payments under foreign trade contracts between a resident and a non-resident entity should be in foreign currency only.
- Certain transactions between residents and non-residents require a license from the NBU.
- Foreign loans must be registered with the NBU.
- Payments in foreign currencies between residents of Ukraine are prohibited.
- Ukrainian companies usually must receive payment for exported goods, and obtain pre-paid imported goods within the period of 90 days.
The above is intended to provide a brief guide only. It is essential that appropriate professional advice is obtained. Our company will be glad to assist you in this respect. Please do not hesitate to contact us.