Let’s dwell upon starting IT-business in Ukraine if the founder is non-resident.
If you want to organize everything legally, the first step is to register a Ukrainian legal entity. Very often foreigners want to optimize taxation and save money, that’s why they don’t register their business in Ukraine. As a result, they don’t have to employ a CEO, to pay him salary and taxes on this salary. You don’t have employees as well, all your programmers are registered as individual entrepreneurs, and thus they don’t get salary – they get payments for their services. All in all, your expenditures for taxation will become 3-4 times lower.
Such “scheme” is very wide-spread, but one shall understand, that it is necessary to organize such business correctly in legal meaning, to avoid future problems with State Fiscal Service of Ukraine. All contracts between company and employees must have nothing in common with classical labor contracts. And employees must know the nuances of their statuses; understand that they are independent business subjects, who provide services and are paid for these services, and not work in the form of official employment.
Ukraine tries to treat IT-business very loyally and softly. For example, temporarily, from 1 January 2013 to 1 January 2023 IT-business is exempted from VAT; and income tax is reduced to 5% (instead of 19%, as in all in 2012).
At that, the subject software industry is considered an entity that during the previous four consecutive reporting (tax) quarter (i.e. more 1st year) collectively meets the criteria, foreseen in the Tax Code of Ukraine (including types of economic activity, done during previous year, original value of fixed assets and / or intangible assets, absence of tax debt, non-being a bankrupt).
For details, please, feel free to contact us.
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