How to start a business?
To start business operations in Zhytomyr Region one should go through state registration procedure and become an entrepreneur. After the state registration of business entity it is necessary to be registered in local offices of the State Tax Service, the State Statistics Service and State social funds. Business entities can register in the form of physical or legal entity.
An entrepreneur is established from the moment of its state registration. For the business state registration the following documents are needed:
- Foundation documents: statute, articles of incorporation and a founder’s decision to establish a legal entity.
- Registration card certifying payment for the state registration.
- A document certifying contributions paid into the authorized fund, if the company is created in the form of business entity.
- If the cofounder is a foreign legal entity it is necessary to submit documents that attest the registration in its own country, and minutes of the meeting of the foreign company about establishing in Ukraine an appropriate business unit with the capital of this company. These documents must be certified in accordance with the laws of the country of its issue, translated into Ukrainian language and legalized in the consular office of Ukraine or certified by the Embassy of an appropriate State in Ukraine. A legal entity has to reserve the full name of the company.
- If the cofounder is a foreign investor – an individual person, it is enough to present a document proving his identity and assign an Individual tax number in the State Tax Service.
The most common forms of business for foreign investors are:
- establishment of a foreign company that is entirely owned by the investor;
- establishment of an office, a subsidiary enterprise or a branch of a foreign company in Ukraine;
- signing a joint operation agreement (foreign promotion of investment by Ukrainian company for implementation of individual projects);
- purchase of shareholding of a public joint-stock company by a foreign investor;
- Establishment of a limited liability company (LLC) with partial participation in the authorized fund of the company.
The most popular type of a legal entity with foreign investment is LLC.
Limited liability company (LLC) is the most optimal legal form in Ukraine. The legal nature of an Ukrainian LLC is similar to that of a German “GmbH”, and/or a French “societe a responsibility limitée (SARL)”, and/or Italian “società a responsabilità limitata – SrL”.
LLC in Ukraine is a legal unit and is authorized to do all the activities stipulated in the Statute, as well as all operations necessary or useful for the attainment of social purpose of the LLC.It is important to highlight the fact that the LLC can be found with 100 per cent of foreign investments and can be owned either by the only one person or several persons.
The minimal number of founders (owners, shareholders) of a limited liability company in Ukraine is one corporate or natural (private) person, a resident or non-resident of Ukraine. The maximum number of founders (owners, shareholders) is one hundred. The founders of LLC are liable for the LLC’s commitments only to the extent of their capital contributions to its share capital.
There are no requirements to a minimum share capital of LLC in Ukraine. The share capital shall be paid within 365 days from the date of incorporation.
At the moment of incorporation of a limited liability company it is necessary to appoint a manager (director). The manager can be only a natural (private) person, resident or non-resident of Ukraine. Therewith, for non-residents it is required to get a permit for work in Ukraine first. The manager represents the LLC and acts for and on its behalf without a power of attorney on the grounds of Articles of Incorporation (Articles of Association, Statute or Charter) and signs each corporate document with his personal signature and a corporate seal, but his powers are limited by the applicable Ukrainian regulations and by the articles of incorporation as well. This person is also liable of all activities of the company.
A summary of taxation rules for LLC in Ukraine:
- Corporate income tax (CIT) is 18%;
- Value added tax (VAT) is 20%;
- Social security contributions is 22%.
The list of ASC providing services with state business registration.