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Limited Liability Company in Ukraine – basics

In following are some of the basics one should know about the Ukrainian Limited Liability Company before taking any steps towards incorporation in Ukraine.

Should you choose to set up a Ukrainian LLC of your own, push the button below and proceed to the online company registration form. You will get a free consultation upon submitting your data.

 

SHAREHOLDING STRUCTURE

The number of shareholders is limited to 10. Once they are 11 or more, Ukrainian LLC has to be converted into a Joint Stock Company. The existing shareholders have a pre-emptive right to buy another shareholder’s shares. The General Shareholders’ Meeting is the highest governance body of any LL.C., its resolutions are adopted with the 60% shares majority.

CHARTER CAPITAL

As of April 1. 2012 the minimum charter capital of a Ukrainian LLC amounts to appr. 130,- US dollars. It might seem quite few, but consider the practice for instance. As soon as your Ukrainian company has been set up, it is going to have to report to the Ukrainian Tax Authority on a monthly basis. Such reporting as well as other expenses are required to keep the company working. 130,- US dollars cannot be sufficient for this and different other cash needs. Common types of subsidiaries financing like mother to daughter company loan are hurdled by the bureaucratic loan registration with the National Bank of Ukraine.

EXECUTIVE BOARD:

Every Ukrainian limited liability company must have at least one director who is responsible for its functionality. For a newly registered company, a foreigner cannot become the director if she/he has not yet obtained the permit to be employed in Ukraine. In such cases an interim director is assigned till the non-Ukrainian director obtains the work permit and the director switch occurs legally. If you do not have any special candidature for the temporary director, one of our employees can take over the function.

TAXATION:

Currently (as of April 2012) it is 21% on profit, which is going to be gradually reduced to 19% on January 1, 2013 and to 16% on January 1, 2014. Value Added Tax is 20%. Have a look at our article on the new procedure of the VAT-Payor registration.

Please ask us for advice before taking any action. You can do it here, it this blog right after this post. We are always happy to help.

Sincerely yours,
Alexei Sandakov
CEO, Lobusch Consulting
www.lobusch-consulting.com