Miller Magazine Issue: 121 January 2020

75 ARTICLE MILLER / JANUARY 2020 founder natural person shall first obtain a Ukrainian tax- payer code. A non-resident (but only a natural person) may also be the director of the Ukrainian company. However, first of all he/she shall obtain a work permit. In the absence of such a document, the first director may be the Ukrainian citizen or a non-resident already having Ukrainian resi- dence permit. Immediately after the company is incor- porated in accordance with the law, a non-resident may obtain a work permit and commence the procedure for changing management. BENEFICIARY OWNERS In the framework of the anti-corruption strategy in Ukraine, amendments were made to several legislative acts. According to the law the companies established in accordance with the legislation of Ukraine shall provide information to the state registrar regarding their ultimate beneficiary owners (i.e. ultimate natural persons owning over 25% of shares in the company). Information about ultimate beneficiary owners of com- panies shall be published in the open state register of legal entities and natural persons - entrepreneurs. AUTHORIZED CAPITAL AND LIMITED LIABILITY Authorized capital of a limited liability company is divid- ed into shares owned by founders of the company, which is the main attractiveness of limited liability companies. Meaning that members of the company shall not be liable for obligations of the company and shall bear the risk of losses associated with the LLC activities, but only within the value of their paid contributions. Minimum authorized capital is not provided by law. It is reasonable to form authorized capital in the amount that will allow to cover the costs of the initial maintenance of the company before it reaches profitability (rent and maintenance of premises, payment of salaries to employ- ees, etc.). Authorized capital shall be paid by members within 6 months from the date of state registration of the company, unless otherwise provided by the Articles. TAXATION SYSTEM Ukrainian legislation provides two taxation systems: general and simplified (unified tax)*. However, simpli- fied system shall not apply to a company with over 25% owned by non-resident legal entities. So, a limited liabil- ity company with a foreign member - legal entity owning over 25% shall be subject to taxation under the general system. Principal tax that payable under the general system shall be income tax, at the rate of 18%. The enterprise whose volume of operations for the last 12 calendar months reached UAH 1,000,000 (equal to 33,000 EUR) shall be subject to mandatory registration as value added tax payer, at the rate of 20%. If neces- sary, the company may get registered as VAT payer on a voluntary basis. As an employer, the company shall deduct from its employees’ salaries 18% of the natural person’s income, 1.5% of the war tax and 22% of the unified social con- tribution. *Simplified system (unified tax) is a special mechanism of taxation, where payment of separate taxes and fees is replaced by payment of single tax. The single tax rate (for the 3rd group of taxpayers, which is the most common group for companies) is 5% and 3% (for VAT payers) with