Small Business in Ukraine. We Help Foreigners to Launch and Develop their Enterprises

For the majority of foreign businessmen, Ukraine is a country with an unstable political and economic situation, changeable weather, and a special mentality of people. Those who have decided to invest in Ukraine are attracted by such advantages, as fertile land and lower taxes, rent, and salaries if compared to the European ones. However, many non-resident investors faced the cunningness of the complicated legislation, despite they got all necessary approval documents. By the way, foreigners quite often opt for starting a small business in Ukraine. And the reason is clear: It’s better to develop step by step, betting on diligence and honesty of the personnel.

Norms of Small Business Registration in Ukraine for Non-Residents

The legal status, fundamental rights and obligations of foreigners are determined by several legislative acts of Ukraine. Non-residents can carry out investment, foreign economic, and other types of entrepreneurial activity on an equal footing with the Ukrainians unless otherwise is stipulated by norms. With regards to small enterprises, non-residents (foreigners) are doing business in Ukraine adhering to the same scheme as the citizens, except for some additional documents. For example, they must translate their passports into Ukrainian, notarize and apostille them as well as get taxpayer ID numbers.

International Companies in Ukraine. We Dispel Myths and Misconceptions

At first, many foreigners perceive doing business in Ukraine as a real challenge. However, some business niches are still empty, the competition is low. Nevertheless, the Ukrainian legislation has its peculiarities. There are some administrative restrictions and tacit rules of the market. Foreigners think that all this is not really logical. It will take a lot of time for entrepreneurs and accountants from other countries to understand how to do reporting. Those who are attracted by business opportunities in Ukraine also should get used to the excessive bureaucracy of some processes. Moreover, starting a small business in Ukraine requires more time than in some other countries, such as Poland. Especially this is the case when you need to get approval documents. The most conspicuous example is construction. Some time ago, a builder had to get a lot of approval documents to start construction of the object. Now, this procedure is slightly simplified. Yet entrepreneurs still have to fill tax and accounting reports far too frequently.

Great Ideas to Invest in Ukraine

When you decide to buy business in Ukraine, of course, you have to choose the most profitable directions. In general, we can certainly say that now is a  good time for doing business in Ukraine. The most promising fields target global and foreign markets with foreign currency revenue. During the recent decade, IT became one of the best spheres to invest, as startups in Ukraine are already a full-fledged trend. People from other spheres come to IT and build their businesses using modern technologies. However, sometimes Ukrainians have great ideas, but lack funds to launch a startup in Ukraine. They are the ones who need the help of foreign investors. There are lots of such developers, therefore, Ukrainian startups are really a great choice. Such ideas can be quite original, implemented by a bold, creative approach or a trusted method.

We understand that foreign investors are looking for transparent companies with managed risks. That’s why, we offer an opportunity to scan all processes of the enterprise, a way of management and operation. An investor will be able to assess a specific company as well as a whole list of interesting proposals on the Ukrainian market. On the other side, not all enterprises that are looking for additional sources of funds understand the expectations of investors.

We offer complete support of small business for those who have decided to invest in Ukraine, from management to technical issues related to the standardization of the operation of a company. After this procedure, both parties understand the peculiarities of doing business in Ukraine and know how to cooperate. They have no problems with tax, financial, and other reporting.

Successful Small Business. You Do Not Choose the Times, You Deal with Them

There are strategies to launch and run a small business during the period of rise or decline. Many world-class marketing specialists believe that it’s easier to stand out if the business is started in difficult times. The point is that a crisis forces big companies to make decisions more slowly and, hence, the speed and quality of their service lags behind. Small business in Ukraine (as well as in other countries) more quickly reacts to changes in the market. When the growth starts, a new enterprise will have a more advantageous position. Of course, doing business in Ukraine 2016, now, and probably in the future, will be tough, so it’s better to use the professional help of A. T. Consulting.

Our employees have gained managerial experience and knowledge during the cooperation with various economic sectors. They turned years of experience and up-to-date data into comprehensive services of business consulting. They analyze the situation with small business in Ukraine and explain to foreign investors why certain issues arise. The specialists of A. T. Consulting offer a development strategy and help to solve problems if they exist. In addition, international companies in Ukraine face the same problems as the local ones. For example, conditions of work change really often, and you have to risk to hold your position. Having experience in keeping accounting of international companies in Ukraine, our specialists know what they will have to work with.

A Flexible Approach to the Organization of the Work of an Enterprise

The aspects of running large, medium, and small business in Ukraine differ, but the goal is the same – making a profit. Due to the current conditions, entrepreneurs have to be flexible, decisive, and creative. To be successful in this situation, regardless of the scale of your business, you need to get in order your financial and tax documentation.

Consulting services of A. T. Consulting are focused on:

  • Companies, the top management of which is in a tough situation and cannot stabilize it;
  • Businesses that are ready for changes and want to utilize new opportunities;
  • Investors that enter the Ukrainian market.

With our assistance, small businesses in Ukraine get new opportunities for growth. The specialists of A. T. Consulting help to optimize expenses, increase the return on existing assets, and build a proper functional structure. Companies that cooperate with us have no problems with fulfilling their obligations and can make timely decisions on business expansion. Foreigners that decided to buy business in Ukraine during the decline also can ask for the assistance of our employees. Of course, customers with many problems need more time and help. They get “first aid” and are “prescribed fast-relieving medicine”. To feel the desired changes a small business in Ukraine needs to go through an adaptation period. And only after, that a development strategy based on individual characteristics is created.

Click to view Agribusiness in Ukraine

Enterprise Liquidation Process

Peculiarities of Enterprise Liquidation Process

Sometimes legal entities that run business are forced to stop their activity for certain reasons. Today jurisprudence formulates only a generalized definition of enterprise liquidation. Namely, this is a process which results in a full stop of a legal entity operation. There is a set of normative acts that are supposed to regulate enterprise liquidation procedure (the Civil Code of Ukraine, the Economic Code of Ukraine, the Law of Ukraine On Business Associations, etc).

Enterprise liquidation process is quite complicated and time-consuming. Almost all entities related to a corresponding type of activity are involved in this procedure. In order to complete all enterprise liquidation steps in a relatively fast and accurate way, one must perfectly know all the necessary information and adhere to the algorithm of actions specified by the Law of Ukraine.

Not everyone can properly organize an enterprise liquidation, as during this process different problems and discrepancies may appear and delay the procedure for some additional time. Therefore, the best choice is to use professional help. Contact A. T. Consulting Company to get a qualified legal advice about creation, operation, and liquidation of an enterprise.

Who Takes Decisions on Enterprise Liquidation

Liquidation is one of the ways to stop the activity of a legal entity. In such case, there is no possibility of legal succession and the enterprise fully loses its obligations and rights. Enterprise liquidation process consists of different stages, first of which is the decision to stop the activity. Future steps will depend on the cause of the liquidation. A legal entity can be liquidated for the following reasons:

  • By the personal decision of an enterprise owner. It is necessary to complete the protocol of a co-founders’ general meeting resolution. However, if the enterprise is a founder (member) of a business association, it cannot be liquidated as a legal entity. To stop its operation through liquidation such enterprise has to exit all business associations.
  • By bodies of executive power (for example, court). This is an enforced enterprise liquidation. In the course of this process, the state registration of the legal entity is acknowledged as invalid. This type of activity liquidation can, for example, happen due to the mistakes made during the entity registration procedure.
  • When the Law of Ukraine stipulates the decision to liquidate the enterprise. For example, an LLC must submit a liquidation decision, if the value of net worth is less than the indicated minimum (less than the minimal amount of the authorized capital specified by the law).

The liquidation rules related to the specific types of enterprises are clearly indicated in the legislation, which manages the activity of these legal entities. For example:

  1. Declaring an enterprise bankrupt (bankruptcy). The liquidation rules are described in the Law of Ukraine On Restoring Debtor Solvency or Declaring a Debtor Bankrupt.
  2. Banking institutions liquidation is specified by the Law of Ukraine on Banks and Banking Activity.”

If enterprise members, court or other governmental bodies have decided to liquidate the enterprise, they should immediately notify (in written form) the body responsible for state registration about this decision. Later they will have to submit a set of documents to this body. And after that, it will record the decision on the legal entity activity termination in the Unified State Register of Legal Entities and Individual Entrepreneurs. Anyone can access the data of this registry. Therefore, creditors will be able to learn that the legal entity is planning to terminate the activity of the enterprise.

Here are some nuances related to the decision to terminate the activity of an enterprise. Different forms of enterprise organization have unlike demands:

  1. Private enterprise. The decision is taken by the owner and formalized in a form of disposition, order, or decision within the enterprise.
  2. General and limited partnership company. The decision is taken by the general consent of all association’s members who participate in the meeting. It is attested with a participants meeting protocol.
  3. Limited liability company and additional liability company. The decision about the enterprise liquidation is taken on a company members meeting and attested with a meeting protocol. It can be taken if the majority of the meeting participants vote for this while the members who have more than 60% of joint votes are absent.
  4. Joint stock company. In this case, the decision is attested with the protocol completed on a general stockholders meeting. It is taken by the majority of the participants’ votes (at least three fourths) when the people with more than 60% of votes are present.

The decision regarding liquidation commission appointment and liquidation balance sheet approval is made in the same way. As to affiliates (separate units that are not legal entities), they are also liquidated by the decision of the corresponding enterprise management body, which is authorized to take such actions by the statute. However, sometimes affiliates can face compulsory liquidation (if a legal entity is declared as bankrupt, etc).

The Second Stage of Enterprise Liquidation: Special Commission Appointment

After the authorized bodies have decided to liquidate the enterprise, in order to deprive it of a legal entity status it is necessary to move to the following step of the liquidation process. Namely, appoint a commission that will carry out the liquidation. It is created by a body or a person who has taken the decision on the enterprise liquidation. In some cases, it may be even a management body of the enterprise that is currently terminating its activity. This commission can consist of one or more people. If the enterprise liquidates itself, the commission is created by a company owner or an authorized person. Therefore, they will terminate the enterprise activity within the scope of their job responsibilities. This procedure can also be carried out by one individual. Usually, this is true for small enterprises. Note that if the liquidation is voluntary, the composition of the liquidation commission is not regulated. In such cases the group usually consists of:

  1. Enterprise manager (head of the liquidation commission).
  2. Senior accountant.
  3. Other employees.
  4. Representatives of audit companies, etc (if required).

If there is a state share in the authorized fund of the enterprise, the commission should also include a representative of the state-owned property owner from the corresponding body. It is better if a number of commission members is odd as this simplifies the decision-making process and helps to count the votes.

The day when the special liquidation commission is appointed, it acquires powers to manage all activities of the legal entity. However, the members reserve some authority, such as liquidation balance sheet approval. During the liquidation process, the enterprise maintains the status of a legal entity. However, the very liquidation commission does not obtain such status. It speaks in the court and takes other actions on behalf of the legal entity, acquiring obligations and rights for it. The details of the enterprise are used to formalize its operations in all documents.

If the commission has decided to close the enterprise through liquidation, its owner should define the term during which the documentation (accounting, etc.), stamps, seals, and material assets of the enterprise will be transferred to the commission. If the liquidation is carried out by a body of the legal entity, there is no need to transfer the aforementioned assets and documents. The body that is supposed to decide on the enterprise liquidation sets the time and order of this procedure and defines the deadline (no less than two months) during which the corresponding claims of creditors should be satisfied.

Work of an Enterprise Liquidation Commission: a Special Announcement is Placed in Press

The liquidation commission should publish a special announcement about the termination of the legal entity activity in media. The announcement indicates the terms and order of creditors’ claims. Such announcements must be placed in a special printed mass medium (“Herald of state registration”). In addition, they must include the following information about the legal entity:

  1. Name.
  2. Address.
  3. Taxpayer licence number.
  4. The reason for the enterprise liquidation (reconstruction, merger, liquidation, takeover, or division).
  5. Information about the liquidation commission and the date of its appointment.
  6. Data about the date and place where the enterprise liquidation decision entry was made.
  7. The term during which the creditors can assert their claims to the enterprise under liquidation and the order of this procedure.

Only business associations have a set term (three days after the corresponding decision) after which the information about the enterprise liquidation is placed in media.

Enterprise Liquidation: an Inventory Check

During the enterprise liquidation, it is obligatory to organize an inventory check. This process is described in the last subparagraph of the third clause of the Instruction on the inventory of fixed assets, intangible assets, inventories, cash and documents and calculations (Order of August 11, 1994, № 69). However, the exact date of the inventory check cannot be set based on the information provided in these documents. It is logical that the inventory check should be conducted the day when the decision about the enterprise liquidation was taken. It must be organized right before a responsible body starts to complete an interim liquidation balance sheet. It is a certain sequence of actions that are supposed to document the availability, assessment, and condition of the enterprise’s obligations and property. The inventory check is carried out according to the Instruction on the inventory and covers all the obligations and assets of the enterprise (intangible assets, fixed assets, cash, calculations, documents, and inventories). The results of the inventory check are recorded in tax and regular accounting documents under the normal procedure. It is very important to ensure that the debts with passed limitation period are written off and the records include the information about shortages and surpluses.

Enterprise Liquidation: How to Evaluate the Property of a Legal Entity?

When the period during which creditors can submit their claims ends the liquidation commission draws up an interim liquidation balance sheet. It includes the information about the enterprise property assets, the list of creditor’s demands, and the results of their review.

It is important to take into account that during the enterprise property evaluation the accounting continuity principle stops working. Therefore, a special procedure is used to evaluate the obligations and assets of the enterprise under liquidation. If a municipal enterprise or a business association with a state share of the property is liquidated, the property should be evaluated by special appraisers (estimating entities). If a legal entity of other type or business pattern and ownership is under liquidation (sole proprietor, etc.), a special appraiser can evaluate the property, yet it is not obligatory.

Usually, the property of the enterprise is used to satisfy creditors’ property claims, yet sometimes it is not enough to cover the demands. Hence the priority of payments to creditors is set (art. 112 of the Civil Code of Ukraine):

  • First of all, the enterprise should satisfy the demands related to the compensation for damage caused by an injury, an occupational disease,  other health damage or even a death, as well as the creditors’ claims secured by a mortgage etc.
  • Then it is necessary to satisfy the employees’ demands related to labor relations and the authors’ claims regarding the payment for the use of their creative or intellectual activity.
  • After that, the demands related to charges and taxes.

The demands in separate queues are satisfied proportionally to the amount of drawings stated by every creditor. If a creditor asserts one’s claims after the time period for claim submission has passed, one receives a part of the enterprise property, which is left after the rest of demands timely submitted by other creditors are fulfilled. The demands are regarded as settled if the creditor did not address the court with a lawsuit during the defined time, the enterprise liquidation commission did not approve them, or the court refused to meet them.

The Order of Employment Contract Termination in case of Enterprise Liquidation

There is a procedure of employment agreement termination (a fixed-term contract that remains in effect till its validity and a permanent contract with the indefinite term) for wage laborers. It is carried out after the decision about the enterprise liquidation is taken. In such situation, some temporarily disabled employees may be laid off. The day the employees are dismissed they must receive properly filled employment record books (in the “Cause of dismissal” column should be indicated “Dismissed as the result of the enterprise liquidation…”) and copies of the orders of dismissal. In this case, the consent of a trade-union is not required to terminate the employment contract. However, the employees must be notified of the dismissal two months before it takes place. After the employees have been familiarized with the order, they should acknowledge this with their signatures. It will serve as an official confirmation.

There are some categories of employees who mandatorily need a job placement after the enterprise is liquidated. Including women with children under three years old, single mothers (if they have a disabled child or a child who has not reached 14 years of age), and pregnant women. If the representatives of this category are employed, they preserve the average salary during the employment process. In a way, it serves as a motivation for the employer who is liquidating the enterprise. All employees receive a severance pay if they are dismissed as the result of the liquidation. This sum should not be less than the average monthly earnings.

The Last Stage of Enterprise Liquidation Process

On the last stage of liquidation, the record about the state registration of legal entity termination is made in the Unified State Register of Legal Entities and Individual Entrepreneurs. After the formalized liquidation procedure is completed, the head of the commission or an authorized person must send a set of documents defined by the legislation to a state registrar. The signatures of members and the head of the liquidation commission must be attested by a notary. The liquidation balance sheet is confirmed by the body that has taken the decision about the liquidation or the legal entity founders. After all the aforementioned steps are taken, the enterprise will not be regarded as a legal entity.


The Law “On amendments to some legislative acts of Ukraine about corporate contracts” was passed by Parliament of Ukraine on March 23, 2017.
Nowadays, participants (shareholders) of the Company have an opportunity to conclude contracts regarding their further mutual running of business, including:
1. Voting agreement
2. Put option, call option, drag along, tag along regarding shares of the Company
3. Deadlock resolution
4. Rotation of officials
5. Non-competition provision
In accordance with mentioned document irrevocable power of attorney is available for shareholders of the Company.
Decisions of meeting of shareholders cannot be defined as invalid via violation of corporate contract, but in this case the suffered Party has an opportunity to demand reimbursement from another Party.


In accordance with Art. 1 and 2 of the Law of Ukraine “On the order of payments in foreign currency” period of payments in import and export transactions cannot be more than 180 calendar days.
Nevertheless, National Bank of Ukraine has an authority to establish additional limits.
Nowadays period of payments in such transactions cannot be more than 120 calendar days (p.1 of Regulation of NBU No.410 as of December 13, 2016). This limit is valid until June 16, 2017.


In accordance with tax legislation accounting documents should be saved during 3 years (transfer pricing documents – 2 555 days). Tax authorities have not a right to review accounting documents older than 3 years, because period for tax checking can not be more than 3 years. So if tax payer had been saving accounting documents three years and then these documents were destroyed (even with violation of the destruction order) there will not be negative tax consequences for a tax payer.
Nevertheless period of saving of accounting documents is also prescribed in The list of typical documents created during the activities of state agencies and local governments, other agencies, businesses and organizations, specifying the terms of document storage. But in case of violation the terms of this document Ukrainian legislation prescribes only small penalty – from 136 to 255 UAH (≈5-10 USD) (Art. 1642 of Code of Ukraine on Administrative Offences).


On 23 February 2017 the National Bank of Ukraine (NBU) amended its regulations whereby it revisited the legal regime for placement money on foreign accounts and making foreign investments by individuals-residents of Ukraine (Resolution of the Board of the NBU No. 14 dated 23 February 2017 “On Amendments to Certain Regulations of the National Bank of Ukraine.”).
The amendments cancel the requirement for individuals-residents of Ukraine to obtain an individual license from the NBU in the following cases:

placement of funds originating from abroad on foreign bank accounts; and
investing into foreign assets at the expense of funds originated from abroad.
The above changes apply to individuals-residents of Ukraine only — and only with respect to funds originated from abroad. Ukrainian companies and individual entrepreneurs will still be required to obtain an individual license from the NBU in the aforementioned cases. This is significant step towards liberalization of Ukrainian currency market.
The aforementioned changes came into force as of 25 February 2017.


In accordance with p.292.5 of Tax Code of Ukraine Income denominated in foreign currency shall be converted into Ukrainian hryvnia at the official exchange rate of Ukrainian hryvnia to the foreign currency established by the National Bank of Ukraine on the date of receipt of such income.
According to the NBU Regulation No.410 as of 13.12.2016 there is established a mandatory sale of 65% of the proceeds in foreign currency transferred by non-residents to Ukrainian bank accounts.
There are two current accounts of a single tax payer: in UAH and in USD.
65% of income in USD is transferred on interim bank account, then this sum is converted to UAH at the interbank exchange rate of Ukrainian hryvnia to the foreign currency and afterwards a single tax payer receives income in UAH on his current bank account in UAH.
35% of income in USD is directly transferred on current account in USD of a single tax payer.
For the purpose of taxation only current bank accounts are considered.
So determining of income of a single payer will be following:
Income according to details of current bank account in UAH (65 % of total income) + Income according to details of current bank account in USD converted into Ukrainian hryvnia at the official exchange rate of Ukrainian hryvnia to the foreign currency established by the National Bank of Ukraine on the date of receipt of such income (35% of total income)
There is a question what to do in case when single tax payer would like to sale 35% of income in USD. Are exchange differences in this case included into income or not?!
In depends on the legal status of a single tax payer: a sole proprietor or a legal entity.
1) A sole proprietor
In accordance with pp.1 p. 292.1. of Tax Code of Ukraine income of a single tax payer for a sole proprietor — the income received during the tax (accounting) period in specie (cash and/or non-cash); tangible or intangible form, specified in clause 292.3 of this Article. In this case passive income received by such a person in the form of interests, dividends, royalties, insurance reimbursement and indemnity, as well as income received from the sale of movable and immovable property owned by a natural person under the ownership and used in economic activity are not included to the income.
So in case of sale of 35% of income in USD by single tax payer – sole proprietor exchange differences are not included to the income of sole proprietor because these exchange rates are passive income of sole proprietor. Tax authorities has a similar position:;
2) A legal entity
According to pp.2 p.292.1. of Tax Code of Ukraine income of a single tax payer for legal entity — any income, including income of representative offices, branches, departments of such legal entity received during the tax (accounting) period in specie (cash and/or non-cash), tangible or intangible form, specified in the clause 292.3 of this Article.
So income of legal entity has not exceptions regarding passive incomes. That’s why in case of sale of 35% of income in USD by single tax payer – legal entity exchange differences are included to the income of legal entity (obligation regarding including of exchange rates to the income is also prescribed in bylaw – Regulations on accounting standards No.21). Tax authorities has a similar position:

Ukraine Economic Outlook

Ukraine’s economy grew at the fastest pace in nearly three years in Q3, as it proceeds on a modest recovery path following a deep recession. While there have been improvements in economic data, the country is facing exorbitant challenges and remains reliant on external financing. The IMF visited the country in November but postponed completion of the third bailout review, stating that further reform efforts are required. Key areas that the government needs to address include tackling corruption, cutting expenses and reforming inefficient state-owned enterprises. However, unpopular measures have eroded the government’s popularity and sparked large-scale protests. Public anger has been especially high throughout November after new anti-corruption measures revealed vast stores of wealth held by prominent civil servants.