UkraineGeneral information
Total area: 603,700 sq. km Population: ~48 million Principal cities: Kyiv (Kiev), Donetsk, Zaporizhzhya (Zaporozhye), Dnipropetrovsk (Dnepropetrovsk), Kharkiv (Kharkov), Lviv (Lvov), Odesa (Odessa) Official language: Ukrainian (although in business Russian is mainly used) Neighbouring states: Russia, Moldova, Belarus, Poland, Romania, Slovakia, Hungary Currency: Hryvnia (UAH)
Ukraine has focused long ago on closer integration with
rest of world while preserving its traditional links with countries of former Soviet Union. Reflecting its importance and size, Ukraine is a member of United Nations, IMF, World Bank, EBRD, etc.
Investment policy and investment possibilities
•Foreign ownership of most types of business is permitted. •Foreign investments are welcome, especially, those ones involving technology transfer and capital. •Similar regime of investment and business activity is applicable to local and foreign investors. •Protection of foreign investments is available under Ukrainian legislation and international treaties. •As of January 1, 2002 foreign investors can own non-agricultural land in Ukraine. •Special economic zones grant significant tax concessions for investments.
Possible business structures and corresponding regulations
•The corporate and management structure is relatively flexible. •A joint stock company is a legal entity whose capital is divided into a specified number of shares. There are two types of joint stock companies: "open" joint stock company and "closed" joint stock company. Shares of joint stock companies must be registered with State Commission for Securities and Stock Exchange. •Limited liability companies require less complex structure. A limited liability company does not have shares. Participants in company own a percentage of company’s capital. •To establish a presence in Ukraine representative offices are used although they can be engaged in business activities. The representative office does not constitute a legal entity. •A joint venture can take form of a company which has a distinct legal personality or an un-incorporated entity which does not. •Concessions are allowed in certain fields for period up to 50 years. •Preliminary approval from Antimonopoly Committee may be required for certain acquisitions of shares or assets. •There is no ceiling regarding amount of capital a foreign company invests into a Ukrainian company. •Foreign investments must be registered with local authorities.
Tax planning
•Ukraine has developed a wide double tax treaty network. •Domestic tax treatment applies to foreign corporations and expatriate personnel. •Dividends, interest and royalties may be freely repatriated. •Withholding tax of 15% applies to dividends, interest and royalties, but domestic tax law is subordinated to international tax treaties. •The principal taxes in Ukraine are corporate profits tax, personal income tax, VAT, payroll taxes, excise tax, land tax, tax on owners of motor vehicles and import duties. There are also other taxes and different local taxes that may be levied by local authorities.
