Simplification of the private enterpreneurship registration procedure for foreigners

Simplification of the private enterpreneurship registration procedure for foreigners

Financial & legal committee's initiative


One of the main factors contributing to the development of the IT-industry and IT-business in Ukraine is the possibility of using the simplified taxation system, the so-called "third group", which is currently serving as an analog of business-stimulating mechanisms in other countries. Another factor, which has a positive impact not only on the IT-industry but also on other industries, is favorable conditions for free migration of specialists between countries and a transparent mechanism for establishing legitimate business activities for foreigners in Ukraine. But until now there were restrictions in our country, which greatly complicated the cooperation of Ukrainian companies with foreigners as private entrepreneurs.


In order for a company to have the opportunity to sign agreements with a foreign entrepreneur (for example, a software developer from another country), two conditions are required: a foreigner must be a legal resident and be registered as a private entrepreneur in Ukraine. It seems all simple. But both conditions create significant barriers. First, under the lawful grounds for staying in Ukraine is meant the existence of a certificate for temporary or permanent residence, the receipt of which is impossible if the foreigner wants to work without a job at a Ukrainian company or when working on a model of a business entity, without a long-term residence in Ukraine. Second, in order to register a private entrepreneurship in Ukraine, a citizen of another country must apply for the state registration of an individual by an entrepreneur, which contains the column "Place of residence/location of the private entrepreneur". And this column caused difficulties - registrars interpreted this provision as a duty of a foreigner to have a registered place of residence in the sense of the Law "On Freedom of Movement and Free Choice of Residence in Ukraine", which required a temporary residence permit. Because of this foreigners were not able to open a private entrepreneurship in Ukraine without obtaining a residence permit.


Due to the joint work of representatives of the members of the Financial & Legal Committee of the IT Ukraine Association and experts from BRDO, the Ministry of Justice of Ukraine issued an explanation regarding the definition of "Places of residence/location of a private entrepreneur." From now on, to register a private entrepreneurship, foreigners do not need a residence permit and the address can be confirmed by other documents - for example, a real estate lease agreement located in Ukraine.