It is noted that foreign citizens of selected countries benefit from visa-free entry in relation to private, short-term travel i.e., they do not require a visa for travel to Ukraine for up to 90 days every 180 days. The full list of countries that entitle their citizens to short-term visa-free entry can be found at the Ministry of Foreign Affairs.

For long-term stays, foreign nationals must obtain a temporary residence permit, which is necessary for pursuits such as education and employment. Those seeking long-term visas or temporary residence permits should obtain specialised advice and prepare thoroughly to meet all immigration requirements. For information on obtaining a foreign residence permit, visit the State Migration Service of Ukraine.

Investors interested in formalising their business operations in Ukraine have multiple setup options. They can choose from a wide range of legal entities such as Limited Liability Companies (LLCs) or Joint-Stock Companies. Alternatively, they can conduct activities through representative offices.

The LLC is the most prevalent business form in Ukraine due to its flexibility and cost-efficiency. An LLC can be established by individuals or legal entities, either foreign or Ukrainian, with no maximum limit on the number of founders. There is no required minimum share capital; however, founders must fully pay the initial capital within six months of registration. Registration typically takes one business day, is free of charge, and can be completed through a power of attorney.

Opening a representative office is another common practice among foreign investors. A representative office is a division of a foreign company and not a separate legal entity. It is managed by a head appointed by the foreign company and must register as a permanent establishment for commercial activities. Although registration takes longer and is less regulated than an LLC, it offers certain tax advantages, such as including expenses directly in the foreign company’s costs.

It is noted that foreign citizens of selected countries benefit from visa-free entry in relation to private, short-term travel i.e., they do not require a visa for travel to Ukraine for up to 90 days every 180 days. The full list of countries that entitle their citizens to short-term visa-free entry can be found at the Ministry of Foreign Affairs.

For long-term stays, foreign nationals must obtain a temporary residence permit, which is necessary for pursuits such as education and employment. Those seeking long-term visas or temporary residence permits should obtain specialised advice and prepare thoroughly to meet all immigration requirements. For information on obtaining a foreign residence permit, visit the State Migration Service of Ukraine.

Business entities in Ukraine are required to pay corporate income tax on their worldwide profits at a rate of 18%, which is relatively low compared to regional peers. This rate also applies uniformly to capital gains, which are classified as ordinary income. For a comparative overview of Ukraine’s corporate tax rate with its regional peers and EU leaders, refer to Table 1: Selected Tax Indicators: Comparison of Ukraine with Regional Peers and EU Leaders.

In Ukraine, most corporate expenses are deductible, including organisational and start-up costs, interest payments, social security contributions, and research and development (R&D) expenses. Additionally, deductions are available for selected charitable donations, which may vary based on the recipient, such as the Ukrainian armed forces, or the type of goods and services donated, like personal protective equipment and medical devices.

Foreign companies operating in Ukraine are taxed on all locally sourced revenue and are subject to a 15% withholding tax on most income payments. However, lower rates may apply if there is a tax treaty between Ukraine and the company’s country of tax residence that aims to avoid double taxation.

Employers are responsible for withholding personal income tax at 18% and a military duty at 1.5% from salaries. They must also contribute a unified social security payment at a rate of 22% of the payroll cost. For employees in Diia.City (see Section 6.5.3 below), lower rates may apply.

Companies operating in Ukraine may also be liable for additional taxes, including local real estate taxes, state duties, and environmental taxes. Note that these taxes can vary significantly between different regions and municipalities.