Starting from April 1, 2023, Ukraine has introduced a new law that makes it easier for foreign individuals to obtain “digital” residency, also known as “e residency.” This groundbreaking initiative allows e residents to register themselves as individual entrepreneurs and take advantage of Ukraine’s simplified tax system. Under this system, individuals are subject to a reasonable tax rate of 5% on income up to UAH 7,850,500 (approximately EUR 199,000).
What makes this program unique is its fully digital nature. All procedures, such as registering as an entrepreneur and setting up a bank account, can be done remotely and online. Perfectly in line with the concept of digital residency. Moreover, banks will play a crucial role as tax agents for e residents by managing tax withholding and payments on their behalf.
The appeal of e residency lies in its simplicity and transparency. This initiative primarily benefits IT professionals and consultants looking to take advantage of Ukraine’s favorable tax conditions without physically residing in the country. With this legislation in place, Ukraine extends a warm digital welcome to individuals worldwide while offering attractive tax incentives.
Understanding the Concept of Ukrainian E Residency
The Ukrainian e Residency initiative is specifically designed to facilitate foreign individuals, particularly those in the IT industry, in establishing and operating businesses within Ukraine without the need for physical presence in the country. This program not only enables freelancers who collaborate with Ukrainian IT companies to formalize their business partnerships but also enhances their global employment prospects. By officially registering and adhering to Ukrainian laws, individuals can greatly strengthen their contractual relationships and professional reputation.
Advantages of E Residency in Ukraine
The Ukrainian e Residency program offers a range of compelling benefits. Let’s briefly explore each of these advantages;
- Flat 5% Tax Rate; The Ukrainian government has simplified taxation procedures for e residents. Individuals registered as private entrepreneurs are subject to a unified flat tax rate of 5% on their income.
- E Signature Capability; E residents possess the ability to remotely sign contracts and documents using an electronic signature, which proves valuable for online work that does not require physical presence in the country.
- Remote Bank Account Opening; Ukraine has implemented a digital identification and verification system, allowing e residents to open bank accounts in Ukraine entirely online, eliminating the need for an in person visit.
- Professional Support; When you register for e Residency in Ukraine, you will receive support from personal managers who can assist you with your business activities. These managers are fluent in English and can provide professional guidance.
How to Apply for e Residency in Ukraine
The process of applying for e Residency in Ukraine is simple;
- Sign Up; Start your e Residency application on the official website of Ukrainian e Residency.
- Application Review; Wait for your application to be reviewed and approved.
- Consulate Visit; Once your application is approved, visit the Ukrainian consulate to complete the necessary procedures.
- Completion; After finalizing the consulate visit, you will receive an e signature that allows you to set up your business and open a bank account online.
Ukraine has embraced the modern concept of e Residency programs, providing a promising opportunity that is still in its early stages. This article aimed to explain the concept of Ukrainian e Residency, its advantages and the application process. Don’t forget to check out our article on “E Residency Programs Around the World” for information about similar programs globally.
Have you ever applied for e Residency in any country? Are you considering applying? Let us know via our contact page.