Sole proprietorship in Ukraine: Manual for registration

Author : News Agency

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Being a self-employed person is one of the options to be clear on the law
09:00, 17 December 2019

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In order to officially do your business, you need to undergo certain registration procedures. Being a self-employed person is one of the options to be clear on the law. How to undergo self-employed person registration? Find it out in our article.

What is a self-employed person and why do you need to register it in Ukraine?

According to the law, an individual entrepreneur (independent contractor or sole proprietor) is the simplest legal form of a business entity for which no constituent documents and starting capital are provided.

According to the Civil Code of Ukraine, any individual can carry out entrepreneurial activity only after state registration established by law. Having completed such registration, an individual gains the status of an individual entrepreneur.

An individual entrepreneur can operate on a general or simplified taxation system. Entrepreneurs on a simplified taxation system make up a significant part of small business in Ukraine, representing the fastest in registration and the easiest, from the point of view of accounting, way of doing business.

Related: Trade with occupied Donbas without taxes, registration is financing of terrorism, - Prosecutor General

Becoming an individual entrepreneur provides you with benefits, namely:

  • The entrepreneur eliminates the risks of criminal and administrative liability for tax evasion;
  • Registration as an individual entrepreneur allows you to freely hire employees, conclude contracts, form the history of your own brand, engage in its advertising;
  • The legislation, in turn, offers simplified accounting (depending on the chosen tax system);
  • A simple and affordable state registration procedure, as well as the ability to work without employees (in some cases);
  • The individual entrepreneur has the ability to work remotely and report via the Internet.

After the type of activity - choose the appropriate Standard Industrial Classification (classifier of types of economic activity, SIC).

Any Ukrainian who has reached the age of 18 can become a private entrepreneur.

Also, a Ukrainian who has reached the age of 16 can also register as a private entrepreneur, but in this case, the consent of the parents or the guardianship authority will be required.

The law of Ukraine provides for registration of a private entrepreneur in two ways:

  • through the registrar, by filling out and submitting documents: in person or by mail;
  • using electronic services: with an electronic digital signature.

In both cases, the procedure will occur within one working day.

Related: USA to impose new taxes against China from September 1

To personally register as a private entrepreneur, you need to contact the appropriate authority at the place of your residence, which has the authority to register entrepreneurial activity:

  • district, city, inter-district justice department;
  • the main Kyiv territorial department of justice;
  • district, city administrations, and notaries.

Contact the state registrar at the place of residence with a passport and identification code, provide copies of these documents. There you will need to fill out a registration card.

Documents might be submitted to the state registrar by a special letter or through a representative (by issuing a notarized power of attorney).

If all of your documents are in order, then within three business days from the date of submission of the documentation you should be entered into the state register and issue an appropriate statement. If you sent the documents by letter, then you will receive the statement by mail.

Next, you must personally submit documents to the tax office:

  • copy of passport and identification code;
  • a single tax application;
  • an extract you received earlier from the unified state register;
  • income book;

In this case, the income book will need to be registered even in the case of the online registration of private entrepreneurs.

You will receive a certificate that you are a single taxpayer and the details of the bank account to which you will pay this tax.

Related: Ukraine gets into top with highest taxes

Important! Regardless of the registration method, you will need to open a bank account for cashless payments.

How to open private entrepreneur online

Spoiler: To complete an online application for registration of a private entrepreneur, you must have an electronic digital signature.

Method 1 - through the website of the Ministry of Justice

We pass to the website of the Ministry of Justice here. The algorithm of actions is as follows:

  • enter the "Cabinet of electronic services";
  • click the "Register of legal entities and individual entrepreneurs" button, then select the menu item "Application for state registration of a legal entity or individual entrepreneur;"
  • The login (registration) window will open. If you have not previously been registered in the system, then do it according to the instructions.

Method 2 - using the iGov Public Services Portal.

The algorithm is as follows: select the "Business Services" button, go to the "Registration Data" subsection, then chose the item "State registration of an individual entrepreneur" (the function is available in Dnipropetrovsk, Ternopil, and Donetsk regions).

After obtaining excerpts from the State Register on registration, it is necessary to register with the State Fiscal Service.

What to expect in 2020?

Changes in the size of ERUs and the single tax for the individual entrepreneurs, associated with the entry into force of the budget for 2020, in which MPs and the government revised the minimum wage and the cost of living.

Related: PM Honcharuk: Ukraine's government is planning to reduce taxes gradually

So, individual entrepreneurs of the first group of the simplified taxation system from January 1, 2020, will have to pay 1249.26 UAH per month (53 USD).

Individual entrepreneurs of the second group of the simplified system - 1983.66 UAH per month (84 USD).

The third group of the simplified taxation system, the size of the single tax will depend on the amount of income and the system that the payer chooses: 3% of monthly income for those Individual entrepreneurs who pay value-added tax (VAT) and 5% of income for those who do not have VAT pays. The size of ERUs will be 1039.06 UAH (44 USD) per month.


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