Basic information on setting up a new LLC in Ukraine
A Limited Liability Company (LLC) is by far the most common form of company incorporation in Ukraine. In fact, most foreign investors prefer their subsidiaries to be organized in the form of a LLC.
The following is a brief description of the procedure to keep in mind, once you have decided to establish a legal presence for doing business in Ukraine.
First things to consider
Establishing a new LLC starts with coming up with an idea about the following:
- name of a future company,
- its legal seat,
- number of shareholders,
- person of a director and chief accountant,
- amount of charter capital and distribution of the shares,
- principal types of business activities.
You can check whether a particular corporate name is not already being used at the website of the Ukrainian Company Register: https://usr.minjust.gov.ua/ua/freesearch. There is no reservation, so it’s a good idea to have at least two options for a case that a chosen name turns to be occupied in the process of registration.
To use a certain address as a legal seat for your company, you normally need to own some non-residential premises or have a lease agreement. Alternatively, you can resort to companies providing the services of a “virtual office”, including a legal address and secretary services.
Single-shareholder companies are allowed, the maximum number of shareholders in a LLC is not restricted. Both natural and legal persons, foreign nationals and legal entities can be on the list.
A newly formed company should already have a designated director and a chief accountant, combination of both positions in one person is allowed. A foreign citizen can be appointed as a director, but since he will need a work permit (which can be obtained not before incorporation), a Ukrainian national should provisionally act as a director.
No minimum capitalization requirement is provided for a LLC, so the amount of its charter capital can be as little as 1 UAH. The charter capital of a company must be formed by way of contributions of its shareholders in cash, assets, etc. Each shareholder should pay its share in full within 6 months after the incorporation, unless otherwise provided by the company charter.
A company charter and the application form to be submitted to the Company Register should specify the principal types of business activities (choose appropriate codes from the National Classification). This information is for statistical purposes only and theoretically does not prevent a company to engage in other activities. Nevertheless, it is recommended to designate at least three types of business activities which will make the core of future business transactions.
Step 2 – Filing for registration
Now that all the above information is available, you should arrange for a set of formal documents to be filed with a registrar or a notary for registration of a LLC. They include the following:
- application for registration,
- minutes of the first General Meeting of the shareholders,
- company charter/articles of association,
- application for VAT payer registration.
If one of the shareholders (or a sole shareholder) is a foreign legal entity, there additionally should be filed:
- extract from the local company/judicial register,
- corporate resolution of the foreign legal entity about formation of a company in Ukraine,
- power of attorney for a person, authorized to file these documents on behalf of the foreign legal entity.
The above documents should be provided with a Ukrainian translation, an excerpt and a power of attorney should in addition be notarized and bear an apostille or be otherwise legalized.
While at a notary, you can also have the signature cards notarized, they will be needed in a bank to open a corporate account.
All newly incorporated companies are simultaneously registered with the Tax authority and the Pension funds, no separate filing is required.
Step 3 – Opening a bank account
After the company record appears in the Company Register (normally the next day after your visit to the registrar or the notary), you can proceed with opening a corporate bank account.
The formalities may vary from bank to bank, but most typically you will need to submit all the corporate documents available at that moment (register excerpt, charter, minutes of the first General Meeting of the shareholders, notarized signature cards etc.).
Once the new company is registered, bank account opened and director appointed, it can start operation as envisaged – congratulations!