Entering the Ukrainian market, how to avoid mistakes


The choice of the legal form of a business entity determines not only the initial stage of registration, but also the business structure, type of taxation, regulation of conflict financial situations with partners, the scope of responsibility of managers, the liquidation procedure, etc.

If you are thinking about how to start your business in Ukraine from scratch and correctly, regardless of whether it is a medium-sized company or a large company, then S& P Agency can help you with this.

How to start a business in Ukraine

To open your own business, an entrepreneur needs to register with government agencies. First of all, determine in what organizational and legal format you want to work as an individual or legal entity. There are certain differences here.

FOP – is an individual working as an entrepreneur. This form of activity is usually chosen by those who provide services to the public or other companies. At the same time, the planned income cannot exceed UAH 5 million per year.

OOO – is a legal entity, an organization with one or more founders. An LLC or a Limited Liability Company is chosen by entrepreneurs who plan to do business with large companies, work in foreign markets and attract investments.

Regardless of what form of activity you have chosen, you can register a business without the participation of a state registrar. To do this, you need to apply online through the Diya Portal using a Qualified Electronic Signature (QES). You can also register FLP and LLC offline through government agencies. Highly qualified lawyers from S&P Agency will also help you register a business.

Entering the Ukrainian market, how to avoid mistakes

What are the features of the Ukrainian market

The lack of national capital and the need for restructuring of enterprises, on the one hand, and the need to reduce the technological gap, on the other, actualize the issue of attracting foreign investment for Ukraine.

Attracting precisely long-term foreign investments, as well as intensifying activities to promote them during almost all the years of Ukraine’s independence was one of the priorities of its economic policy, which was determined by a number of official documents. However, unfortunately, today the results are disappointing, and large Western investors are wary of Ukraine.

It is undeniable that there are a number of investment-attractive factors in Ukraine that contribute to the expansion of its investment ties: a large capacious and virtually competitively unlimited domestic market with the majority of commodity items; geographical location at the intersection of the main transport routes between Europe and Asia; relatively cheap and at the same time skilled labor force; scientific potential; developed infrastructure (presence of ports, bridges, airfields, warehouses, communication systems, water supply) and more.

However, according to one of the indicators, reflecting the degree of integration of the country into the world economy, the development of its foreign economic relations and the desire to create an open, export-oriented model of the economy — accumulated volumes of foreign investment, Ukraine is significantly inferior to the vast majority of countries with transformational economies.

The global financial and economic crisis in 2008-2009. and the military aggression of the Russian Federation against Ukraine a few years later significantly worsened investors’ expectations regarding further investment prospects and the security of assets in the country and made their own adjustments, which led to a reduction in the flow of funds and even the outflow of capital in certain periods. Therefore, the task arose, which is not only to actively attract new, but also to maintain existing foreign investors on the territory of Ukraine.

Entering the Ukrainian market, how to avoid mistakes

What are the main business risks?

  1. Talents. The company must take responsibility for ensuring the health and safety of those employees whose lives were directly affected by military operations. However, there are additional effects that affect well-being. For example, relatives or friends of employees may be at risk. This can result in a decrease in productivity and poor access to those IT talents that are located in the regions of the country affected by hostilities.
  1. Cyber security. Conflict can cause an increase in the total number of cyberattacks, so it is desirable to carry out corresponding checks more often. In addition, it is important to keep anti-ransomware protocols under constant control and not only. For example, Gartner Research recently revealed updated models of how ransomware began to operate, which itself called into question the effectiveness of previous cyber defense strategies. If we talk about ERM leaders, then the issue of determining the level of value of their own assets and developing a response manual is especially important for them. If this is done in advance, then you will not have to do the same, but in a hurry due to a cyber attack that has already begun.
  1. Finance. If you have a business with Russia that has become affected by sanctions, then you should consider giving and receiving alternative payments in a way that does not violate sectional restrictions. In connection with the war, prices for basic raw materials will rise, thereby pushing the development of inflation. During this period, it is important for ERM leaders to coordinate with colleagues all their further actions that would relate to the analysis of financial risks, as well as to prepare strategies that helped them reduce the negative consequences of the threats that have arisen.
  1. Supply chains. It is critical to ensure that suppliers’ contingency plans are written and thought through. It is important to review and rethink all relevant supply chain risks. If there are dependencies on some providers, they need to be relaxed. In the future, there is a risk of shortages of important materials and increased costs, so it is better to think over alternative logistics options in advance.

Turnkey company registration service (TOV) in Ukraine — fast, convenient, guaranteed

Any type of business, whether it is a company, LLC, sole proprietorship or sole proprietorship, must be registered with the tax office in Kyiv. There are so many current taxation schemes that everyone can get confused in them. For example, if you want to open a FOP, then you will be presented with several varieties of them, depending on factors such as:

  • type of activity;
  • future financial turnover;
  • possible return;
  • number of employed employees;
  • nuances of work.
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All documents required for registration must be submitted within a certain time frame and in accordance with the procedure prescribed in legislation. If there are inaccuracies or errors in the documents, based on this, you may be denied registration. Therefore, it is better to contact our company for the preparation of documents and other assistance in registration. Find out more on the sp.agency website.

Entering the Ukrainian market, how to avoid mistakes

Conclusions

If you want to secure your business, you must carry out appropriate work with all the risks. The task of each responsible leader — keep everything under control. Conduct an analysis of your business to secure it.

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