We can get for you e-residency status without the need for a physical visit to Ukraine.

After that, it is possible to register an individual entrepreneur online, and all further interactions with government agencies will be automatic.

One of the key advantages of the program is the automation of accounting and tax payments. For example, the bank independently calculates taxes, submits declarations, and takes care of all the bureaucratic work, freeing the entrepreneur from the need to physically interact with government agencies. The tax rate for e-residents is only 5%, and all costs for lawyers and accountants are minimized, as the system automatically performs all the necessary functions.

According to the Tax Code of Ukraine (TCU), a foreigner who has reached the age of 18, is not a tax resident of Ukraine, has received the relevant qualified electronic trust services and whose information is entered into the E-Resident information system may become an electronic resident (e-resident).

According to the Tax Code, a foreigner’s application for e-residency status is equivalent to a personal submission of a taxpayer’s registration card and an application for registration in the State Register of Individual Taxpayers to the relevant controlling authority.

How will e-Residency work?

1. Registration of a specialist through the E-Residency system in Diia, passing financial and security checks

2. Obtaining an electronic digital signature

3. Opening a remote account with a bank that acts as a tax agent for an e-resident

4. Work and payment of taxes – 5% of income within the limit of the 3rd group of individual entrepreneurs, and if it exceeds the limit – at a rate of 15%.

Who can apply for e-resident status?

E-residency is open to specialists in software development, gaming, educational technologies, media, creative industry, marketing, translation, web design, sales, law, project management, communications, and other fields. To wit:

– The head of the company;

– an authorized person on behalf of the company indicated in the Unified State Register;

– a representative of the company by power of attorney.

What are the terms of application consideration?

The application will be sent to the Ministry of Digital Transformation. The applicant will receive a notification of its acceptance by e-mail. The Ministry of Digital Transformation considers the application and the documents attached to it within 10 business days. If the applicant does not receive a response within this time, the company will automatically be granted the status of a Diia.City resident. Decisions of the Ministry of Digital Transformation on returning the application without consideration, granting or refusing to grant the Diia.City resident status to the applicant, and substantiated explanations to them are sent by e-mail.

After obtaining the e-resident status, foreigners will have the right to register as individual entrepreneurs in Ukraine, open bank accounts and conduct their business online. The mechanism for paying taxes and reporting for e-residents is also convenient: it will be done by the Ukrainian bank where the e-resident has a current account.

Who cannot obtain e-residency status?

According to the law, persons who cannot be e-residents are:

* Foreigners with the right to permanent residence in Ukraine or who are tax residents of Ukraine: the restriction is aimed at those who already have a stable status or tax ties in the country.

* Stateless persons: persons who do not have citizenship of any country cannot become e-residents.

* Persons who receive income from Ukraine for goods, works, services (except for passive income): this restriction may apply to persons who already have business or financial relations with Ukraine.

* Persons whose citizenship or residence is in countries not included in the list of countries covered by the program: E-residency is limited to citizens or residents of certain countries.

* Citizens of Ukraine: The internal restriction is that citizens of the country itself, i.e. Ukraine, cannot be e-residents.

These restrictions are intended to define clear parameters for obtaining e-residency status and to ensure the effective functioning of the program

What are the tax implications of being an E-Resident?

To become an E-Resident, in addition to the above conditions, you must:

be registered as private entrepreneur;open a bank account through the “E-Resident” information system with a Ukrainian bank;not employ Ukrainian citizens or residents.
E-Residents will pay a flat tax of 5% on their business income. They are not allowed to deduct any expenses from this amount.

The nature of the business activities of the E-Resident is not restricted.

E-Residents must transfer their business income to the Ukrainian bank account they opened as part of the process.

The bank will also operate as the E-Resident’s tax agent and deduct the relevant tax and deal with all other reporting.

E-Residents are not subject to the social security charges in Ukraine.

Double tax relief?

E-Residents should consider whether the Ukrainian taxes deducted in respect of their business income can be credited against taxes they are liable in their country of tax residency.

If you have any queries about Ukraine E-Residence then please do not hesitate to get in touch.

The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article