Registration of private entrepreneur in Ukraine

Professional legal assistance to run small size business in Ukraine

Starting a business in Ukraine requires its first registration. If you are planning to start a small business one of the options is a registration of a private entrepreneurship (so called in Ukrainian “FOP” (physical person businessman) or in Russian FLP) – it is the most popular option for beginners, the procedure is simplifier compared to registration of a legal entity however (e.g. a limited liability company), however in the meantime it allows to choose suitable business model and flexible taxation group.

Private entrepreneurship is the most optimal option for doing small business in Ukraine.

Registration of entrepreneurial activity is the first and very important stage of starting your own business. In addition, it is important to understand that the state registration of an entrepreneur is not the only necessary procedure. Perhaps your future activity will require obtaining certain permits and licenses.

At the very beginning the entrepreneur, first of all, must decide on the tax system on which he will work. When choosing it, in addition to the type of activity, you should consider such factors as:

– planned annual business turnover;

– the approximate amount of costs that may arise during the operation;

– circle of clients and object of your activity: services or goods;

– required number of employees, etc.

Taxation in Ukraine for private entrepreneurs 

Today in Ukraine there are 2 taxation systems: 

– simplified system (single tax); 

– general system. 

The sole proprietor independently chooses which tax system he will be on. At the same time, if the general system of taxation has no restrictions, then the simplified system can be chosen by not all sole proprietors, as such a system has its limitations and prohibitions.

The general system allows all types of activities that provide for the classification of economic activities. There is also no limit to the number of employees and the amount of income.

Taxation on the general system as of 2021

Let’s move on to the most important question that interests all entrepreneurs – what tax must be paid on the general system of taxation?

The list of income taxes is currently as follows:

– personal income tax = 18%;

– military tax = 1.5%;

– single social contribution = 22%;

– as well as taxes on employees, if any.

* in addition, there is a possibility of an additional tax – VAT (value added tax). It occurs if a private entrepreneur is voluntarily registered as a VAT payer or if his income exceeds the allowable limit (UAH 1 million).

There is an important nuance in taxation in the general system – taxes are calculated and paid not from total income, but from net profit. What does this actually mean?

Profit is the entrepreneur’s income minus the allowable operating expenses. Therefore, if the entrepreneur has significant costs, it is the general system that is more profitable, as this reduces the tax base.

Periodicity of payment of taxes on the general system

Single social contributions are mandatory to be paid quarterly and are paid by the 20th day after its completion. By the way, from January 1, 2021, single social contributions can be omitted in the absence of income during the year.

Personal income tax is calculated quarterly. Payments for the 1st, 2nd and 3rd quarters are called advance payments and are paid by the 20th day of the month following the end of the quarter.

For the last 4th quarter, the advance payment of personal income tax is not calculated and paid, as the total amount of tax for the year is paid, taking into account already paid advance payments. This must be done within 10 calendar days after the deadline for filing a declaration of assets and income.

The military tax is calculated based on the results of the year and is paid together with the annual amount of personal income tax.

Tax reporting on the general system as of 2021

For reporting on the general system it is necessary to submit only 2 documents:

– property and income tax return;

– report on the amounts of accrued income of insured persons and the amount of accrued single contribution for themselves.

The deadline is 40 calendar days after the end of the calendar year.

Thus, the general system of taxation has its advantages. 

The simplified taxation system provides a number of conditions and restrictions for staying in this system.

What is a single tax for private entrepreneurs (simplified taxation system)

Simplified system of taxation, accounting and reporting is a special mechanism for collecting taxes and fees, which establishes the replacement of certain taxes and fees established by paragraph 297.1 of Article 297 of the Tax Code of Ukraine, to pay a single tax in the manner and under the conditions specified in Chapter I of Section XIV of the Tax Code of Ukraine, with the simultaneous maintenance of simplified accounting and reporting.

The conditions for staying in the simplified taxation system are as follows:

First group

Annual income is not higher (UAH): 167 amounts of the minimum wage established by law on January 1 of the tax (reporting) year (in 2021 – UAH 1,002,000)

Number of employees not more (persons): 0

Activity: exclusively retail sale of goods from outlets in the markets and / or carry out economic activities to provide household services to the population

Single tax / single social contribution rate: 

Single tax within 10% of the subsistence level of UAH 227 in 2021) 

Single social contribution “for yourself” for retirement: 22% of the minimum wage (UAH 1,320 from 01.01.2021; UAH 1,430 from 01.12.2021)

Second group

Annual income is not higher (UAH): 834 amounts of the minimum wage established by law on January 1 of the tax (reporting) year (in 2021 – UAH 5,004,000)

Number of employees not more (persons): 10

Activity: economic activity of providing services, including household services, to single taxpayers and / or the population, production and / or sale of goods, activities in the restaurant industry (except intermediation services for the purchase, sale, rental and valuation of real estate (the classification of economic activities group 70.31 DK 009: 2005), as well as activities for the production, supply, sale (sale) of jewelry and household products made of precious metals, precious stones, precious stones of organogenic formation and semi-precious stones)

Single tax / single social contribution rate: 

Single tax within 20% of the minimum wage (UAH 1,200 in 2021)

Single social contribution “for yourself” for retirement: 22% of the minimum wage (UAH 1,320 from 01.01.2021; UAH 1,430 from 01.12.2021)

Third group

Annual income is not higher (UAH): 1167 amounts of the minimum wage established by law on January 1 of the tax (reporting) year (in 2021 – UAH 7,002,000)

Number of employees not more (persons): no limit

Activity: N/A

Single tax / single social contribution rate: 

Single tax 3% of income from VAT;

* 5% of income in the case of inclusion of VAT in the single tax

Single social contribution “for yourself” for retirement: 22% of the minimum wage (UAH 1,320 from 01.01.2021; UAH 1,430 from 01.12.2021)

Fourth group

Who can do: agricultural producers – legal entities and private entrepreneurs who carry out activities exclusively within the framework of a farm registered in accordance with the Law of Ukraine “On Farming”

Annual income is not higher (UAH): share of agricultural production of legal entities for the previous period ≥ 75%

Number of employees not more (persons): no limit

Activity: for private entrepreneurs, provided that a set of the following requirements is met:

– carry out exclusively cultivation, fattening of agricultural products, harvesting, catching, processing of such self-grown or fattened products and its sale;

– carry out economic activities (except for supplies) at the place of tax address;

– do not use the work of employees;

– members of the farm of such a natural person are only members of his family in the definition of part two of Article 3 of the Family Code of Ukraine;

– the area of ​​agricultural lands and / or lands of the water fund owned and / or used by members of the farm is not less than two hectares, but not more than 20 hectares.

Single tax / single social contribution rate: rates are defined by paragraph 293.9 of the TCU as% to the normative monetary value of 1 ha, taking into account the indexation coefficient as of January 1 of the current year, depending on the category (type) of land, their location

Restrictions for the first – third group of the simplified taxation system

  1. Restrictions on the subject composition:

– Business entities (private entrepreneurs and legal entities) that on the day of filing the application for registration as a single taxpayer have a tax debt, except for bad tax debt, which arose as a result of force majeure. The tax debt arises in case of non-payment by the taxpayer of the amount of the agreed monetary obligation (taking into account penalties in their presence) in the terms established by Tax Code of Ukraine, and also the penalty accrued on the amount of such monetary obligation (sub clause 14.1.175 of clause 14.1. Tax Code of Ukraine). It should be noted that: the presence of non-tax debt is not an obstacle to obtaining the status of a single taxpayer (for example, is not considered a tax debt arrear of a single contribution to the obligatory state social insurance).

– Individuals and legal entities – non-residents:

  1. a) foreign companies, organizations formed in accordance with the legislation of other states, their registered (accredited or legalized) in accordance with the legislation of Ukraine branches, representative offices and other separate subdivisions located on the territory of Ukraine;
  2. b) diplomatic missions, consular posts and other official missions of other states and international organizations in Ukraine;
  3. c) persons who are not residents of Ukraine (annually reside in Ukraine less than 6 months and 1 day).

Legal entities in the authorized capital of which the set of shares owned by legal entities that are not payers of the single tax is equal to or exceeds 25%.

Representative offices, branches, offices and other separate divisions of a legal entity that is not a single taxpayer.

Business entities, namely:

– insurance (reinsurance) brokers;

– banks; credit unions; pawnshops;

– leasing companies; trust companies;

– insurance companies;

– institutions of accumulative pension provision;

– investment funds and companies;

– other financial institutions specified by law;

– registrars of securities.

Other subjective restrictions. For example, private notaries do not have the right to engage in business activities under the Law of Ukraine “On Notaries”, individuals who practice law or arbitration, may not conduct business and choose a simplified system of taxation, taking into account the Law of Ukraine “On Advocacy and Advocata’s activity” and the Bankruptcy Procedure Code of Ukraine.

  1. Restrictions by type of activity:

– Activities for the organization, conduct of gambling, lotteries (except for the distribution of lotteries), betting (bookmaker bet, betting bet).

– Gambling does not include, in particular, billiards, bowling and other games held without the player receiving a prize (win), playing on slot machines such as “crane-machine”, where as a win the player receives only material things (toys, sweets, etc.) (Law of Ukraine “On state regulation of activities related to the organization and conduct of gambling”).

– Foreign currency exchange.

– Production, export, import, sale of excisable goods (except for retail sale of fuels and lubricants in containers up to 20 liters and the activities of individuals related to the retail sale of beer and table wines). Retail trade involves the sale of goods for personal consumption and home use (ie the final consumer). At the same time, business entities that sell fuel coupons cannot be single taxpayers (the sale of coupons is essentially a sale of fuel). Entities that change the oil (oil) during the provision of vehicle maintenance services, this restriction does not apply, as such activities do not belong to the sale of fuels and lubricants.

– Extraction, production, sale of precious metals and precious stones, including organogenic formation (except for production, supply, sale (sale) of jewelry and household products made of precious metals, precious stones, precious stones of organic formation and semi-precious stones).

– Precious metals are gold, silver, platinum and platinum group metals (palladium, iridium, rhodium, osmium, ruthenium) in any form and state (raw materials, alloys, semi-finished products, industrial products, chemical compounds, products, waste, scrap, etc.) .

– Precious stones are natural and artificial (synthetic) minerals in raw, untreated and processed form (products), the list of which is given in the Law of Ukraine “On state regulation of extraction, production and use of precious metals and precious stones and control over operations with them”.

– Precious stones of organogenic formation include pearls and amber in raw, unprocessed and processed form.

– In groups 1 and 2, entrepreneurs can only provide “jewelry” services (and to individuals), for example: the manufacture of jewelry to order, repair of watches and jewelry.

– Extraction, sale of minerals (except for the sale of minerals of local importance).

Minerals – natural mineral formations of organic and inorganic origin in the subsoil, including any groundwater, as well as man-made mineral formations in places of waste production and loss of mineral products that can be used in the field of material production and consumption directly or after initial processing (subclause 14.1.91 TCU). The list of minerals is contained in the resolution of the Cabinet of Ministers of Ukraine of December 12, 1994 № 827 “On approval of the lists of minerals of national and local significance”.

– Activities in the field of financial intermediation, except for activities in the field of insurance, carried out by insurance agents defined by the Law of Ukraine “On Insurance”, surveyors, emergency commissioners and adjusters.

– Business management activities.

– Activities for the provision of postal services (except courier activities), activities for the provision of fixed telephone services with the right of maintenance and operation of telecommunications networks and the provision of telecommunication channels (local, long distance, international), service activities fixed telephone communication with the use of wireless access to the telecommunication network with the right of maintenance and provision of telecommunication channels (local, long-distance, international), activity on provision of mobile (mobile) telephone communication services with the right of maintenance and operation telecommunication networks and provision of telecommunication channels, activities for the provision of services for maintenance and operation of telecommunication networks, terrestrial television and radio broadcasting networks, wired radio broadcasting and telecommunication networks.

– Activities for the sale of art and antiques, activities for the organization of auctions (works) of works of art, collectibles or antiques.

– Activities for organizing, conducting touring events. Activities covered by the concept of “touring events” in accordance with the Law of Ukraine “On Touring Events in Ukraine” are also subject to prohibition.

III. Additional restrictions on the activities of private individuals:

Technical tests and research (subclause 291.5.2 TCU).

– Audit activities.


– land plots with a total area exceeding 0.2 hectares;

– living quarters and / or their parts, the total area of ​​which exceeds 400 square meters. m;

– non-residential premises (buildings, structures) and / or their parts, the total area of ​​which exceeds 900 sq. m. m.

Procedure for accrual and terms of payment of the single tax

Payers of the single tax of the first and second groups pay the single tax by making an advance payment no later than the 20th day (inclusive) of the current month. Such single taxpayers may pay the single tax in advance for the entire tax (reporting) period (quarter, year), but not more than until the end of the current reporting year.

If the village, settlement or city council decides to change the previously established rates of the single tax, the single tax is paid at such rates in the manner and terms specified in subparagraph 12.3.4 of paragraph 12.3 of Article 12 of the TCU.

Advance payments for single taxpayers of the first and second groups are accrued by the supervisory authorities on the basis of the application of such single taxpayer on the amount of the selected single tax rate, application for the annual leave and / or application for temporary disability.

Payers of the single tax of the third group pay the single tax within 10 calendar days after the deadline for filing a tax return for the tax (reporting) quarter.

Payment of the single tax by payers of the first – third groups is carried out at the place of the tax address.

Single tax payers of the first and second groups who do not use the work of employees are exempt from paying the single tax for one calendar month per year during vacation, as well as for the period of illness confirmed by a copy of the certificate (sheets) of incapacity if it lasts 30 or more calendar days.

The amounts of the single tax paid in accordance with the second paragraph of paragraph 295.1 and paragraph 295.5 of Article 295 of the TCU shall be credited to the account of future payments of this tax at the request of the single taxpayer.

Single taxpayers of the fourth group: independently calculate the amount of tax annually as of January 1 and no later than February 20 of the current year submit to the relevant supervisory authority at the location of the taxpayer and the location of the land tax return for the current year in the manner prescribed by Article 46 PKU; pay the tax quarterly within 30 calendar days following the last calendar day of the tax (reporting) quarter, in the following amounts:

in the first quarter – 10 percent;

in the second quarter – 10 percent;

in the third quarter – 50 percent;

in the IV quarter – 30 percent.

Responsibility of the single tax payer

Single taxpayers are responsible in accordance with the TCU for the correctness of calculation, timeliness and completeness of payment of single tax amounts, as well as for the timeliness of tax returns.

Our advocate can be helpful for you

AR MAX GROUP is a boutique legal office that focuses on its narrow profile services for foreign citizens and stateless persons in Ukraine and who only plan to move to Ukraine. We provide a wide range of professional legal services on any matters related to visa, temporary residence permit, immigration permit, permanent residence permit, citizenship, refugee status, registration of business, employment, registration of non-profit and charitable organizations. Our expert immigration lawyer provides legal protection of foreigners in any cases with state authorities, appealing questionable and unlawful decisions of state authorities, representation of interests at litigation.

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Preliminary legal consultation – Individual legal consultation – Planning up the legal work, processing terms and payments schedule – Phase-by-phase payment – Commencement of work – Result

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Through our narrow profile, we have gained a great deal of experience in solving any issues or problems listed above. The cost of our services is relatively acceptable, justified and not overestimated, and the quality of services at the highest level. When you will contact us once you no longer need to worry about your legal issues. Our experienced English-speaking licensed immigration lawyer will be your trusted and cost-effective partner. The legal office was established in 2014. The head office is located in Kharkiv city in the east of Ukraine.

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Martin Ellul Mercer
Martin Ellul Mercer
Я хочу поблагодарить адвоката Адвоката Ивана Гончарова за его помощь и профессиональные советы в получении моей визы. ... Без его помощи я бы никогда не справился один. Он ответил мне быстро и всегда был готов дать совет в любой момент. Спасибо, Виктор Мартин Эллул (Харьков)read more
Rooney Subhi
Rooney Subhi
lawyer Ivan is a great professional and as a person, his work ethics, his attitude and his knowledge all made up a... great lawyer, he helped us to revoke my brother's entry ban, we are thankful for his services, thank you again.read more
Danii Thompson
Danii Thompson
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Valeriya Kravchenko
Ivan is an excellent specialist and a true professional! My fiance was refused a visa to Ukraine 2 months before our... wedding, we filed an appeal with Ivan's help and got a visa! Ivan led our case from the start to finish, he was always available and answered all possible questions. Moreover, he gave a consultation even after we got a visa to make sure we are prepared for passport control. Highly recommend!read more
Sharif Hamati
Sharif Hamati
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Дмитрий Тодавчик
Хочу поблагодарить компанию AR MAX GROUP, в частности Ивана за проделанную работу. Настоящий профессионал своего дела.... Мне поставили запрет на въезд в Украину, совершенно не понятно по каким причинам, ведь я ничего не нарушал. Иван быстро во всем разобрался ( оказалось запрет могут поставить за неоплаченный штраф, даже если его оплатил, но не предоставил квитанции куда надо ). В корокие сроки Иван решил мою проблему и добился анулирования запрета.read more
DanRie Permanent
DanRie Permanent
I turned to Ivan for help to find out if there was a ban on entry and if my payment for the fine had come. Since more... than one service did not give me any answer, and I had plans to come to Ukraine as soon as possible, I turned to Ivan for help and he helped me find out all the necessary information in a short time and I managed to arrive as planned. All the necessary documents were sent to me by Ivan so that there would be no problems at the entrance, these documents were necessary and everything went quickly and easily! I want to say thank you very much for solving my problem and doing everything possible for my arrival! I recommend everyone who has problems with the entrance to immediately contact Ivan for help, do not try to solve it yourself, as you can make many mistakes that I made, but we were able to prevent them in time!read more
Lesya Dutchak
Lesya Dutchak
До того як ми з батьком моєї дитини, звернулись до пана Івана, він отримав 5 відмов в отримані візи до України. Пан... Іван добре виконав свою роботу, завжди був на зв’язку, консультував у всіх питаннях, і навіть йшов нам на поступки і корегував підготовлені документи декілька разів (в зв’язку зі змінами через карантин та іншими обставинами). Завдяки йому мій наречений отримав візу з першого разу після чергової подачі документів. Щиро рекомендую пана Івана, дуже йому вдячна і задоволена виконаною роботою.read more
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Telma Cling
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Сергей Топчу
Сергей Топчу
Привет всем !!Была проблема с вьездом на Украину. Обратился к Ивану с просьбой помочь. Очень компетентный... специалист,все решилось быстро и с положительным для меня результатом. Всем рекомендую!!read more
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Aydın Açıkgöz
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Оксана Кузьминична
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Nazarova Bahti
Вони професіонали .......
Miki  Fukaru
Miki Fukaru
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Inna Archi
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Юлия Колодяжная
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Павел Павловский
Свой опыт работы могу описать двумя словами: быстро и дружелюбно
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Vordb Na Riidr
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Rekar Dilzar Botany
I highly recommend the AR Max group, they helped me with the appeal for a multiple entry Visa to Ukraine, I could get... my Visa approved after rejection with the help of this group.read more
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Timi Dapsin
I will really love to thank Armax group and Mr Ivan for the legal assistance provided for me in getting my appeal. At... first I was skeptical but I gave him a trial and he did his best to ensure I got the visa.Thank you so so much.read more
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Fleury Bonnevie Ntwari
He s very trustworthy and flexible
Markdon Scofield
Markdon Scofield
Owner has amazing experience 🙏🏼 thanks for the support
Ekow Brakwah
Ekow Brakwah
My daughter was denied students visa to Ukraine where she intends to study medicine. I had provided every document... including invitation letter from the university, bank statements , sponsorship letter and others needed for Ukraine visa to VFS global ,Dakar. Yet the embassy says we did not prove the purpose of stay in Ukraine ( as per the refusal letter)I felt unfairly treated and decided to make an appeal. Having no idea as to how to write the appeal letter, I went to the internet and googled " Immigration lawyers in Ukraine" I found Armax group and met them on WhatsApp. Immediately they swung into action, in a space of one month the passport with the visa securely sticked in it was in my mail box !!! Armax group are pragmatic and results oriented immigration agency. I recommend them to all who need their services. Ekow Brakwah ( Guinea Bissau)read more
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Muddassar Rasul
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Rufai Bala Balyson
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Ольга Лила
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Sameh Omar
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Muhammad Omar
Muhammad Omar
I would like to share an interesting story with my fellow applicants at Ukraine Embasy. I had applied for a long time... study visa in Nairobi and got a refusal as a feedback, then I decided to do an appeal with the help of Mr Ivan the appeal went successfully i managed to get my visa and very fast , he’s very well understanding lawyer and very good too in English and he’s quick at responding to every type of questions you would like to know. so I would recommend any body who wants to do an appeal to face Mr Ivan he’s trustworthy too Thanks .read more
Monjur Hossain Sajib
Monjur Hossain Sajib
AR MAX Group very faithful and one of the most trustable law firm company in Ukraine.Thank you so much Advocate Mr Ivan... sir.They provide me a valuable service with good responses and done my work within given time.when you want any kind of legal information you can try to contact with him.I hope you will be satisfied with his work.Again thank you so much AR MAX GROUP.read more
Sagar Khowaja
Sagar Khowaja
AR MAX Group !! Is one of the most trustable law firm company in Ukraine. Thank you so much Advocate Mr.Ivan..They... provide me a valuable service with efficient responses and done my work within given time. Due to the service of this company we foreigners feel safe to share legal matters with ARMAX and get it done on time.read more
Ella Bella
Ella Bella
5 * service. Ivan is professional and pays close attention to detail. He assisted me in applying for a visa for my... mother and it was very reassuring to have someone so knowledgeable to guide us. it was a pleasure doing business with him.read more
Rahul Raj
Rahul Raj
Very helpful group in legal services. Mr. IVAN is really helpful and knowledgeable person. Removed my entry ban within... 2 weeks that too at a very affordable cost. Best legal services group in Ukraine.read more
Lydia Dakwa Ohene
Lydia Dakwa Ohene
Always deliver excellent job. I engaged Ivan's services in obtaining citizenship for my baby and within a period of... three months all was set.Great job!!! Keep it up.read more
Prinzz Prashanth Yadav
Prinzz Prashanth Yadav
The service they provide is ultimate and Ivan is a easy going person and knows english well so that foreigners can... communicate with him I prefer this group very much good hospitality great workread more
Rimande Tinyangrimam
Rimande Tinyangrimam
I am satisfied with their services.excellent job..
Iyanu Irene Junaid
Iyanu Irene Junaid
Their services is very good.They respond promptly and the lawyer is a very competent lawyer.Thanks a lot Ar max group
Ibrahem Khalil
Ibrahem Khalil
Николай Миронченко
Николай Миронченко
Bohdan Wetson
Bohdan Wetson
Алина Шумилина
Алина Шумилина
Aleqsandre Maisuradze
Aleqsandre Maisuradze
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