Business news from Ukraine

GROUP OF UKRAINIAN MPS PROPOSE E-RESIDENCY FOR IT EMPLOYEES WITH 5% PROFIT TAX RATE

A group of MPs has registered bill No. 4245 with amendments to the Budget Code on the electronic residency mechanism, which implies a preferential income tax rate of 5%, in the Verkhovna Rada.
According to the information on the parliamentary website, the bill was registered on October 21 by MPs from the Holos faction Yaroslav Zhelezniak, Volodymyr Tsabal, Kira Rudik and Halyna Vasylchenko, as well as MP from the Servant of the People Danylo Hetmantsev.
“The idea is simple. If you are an IT specialist from India, China, Pakistan, Germany, or even Belarus, then, being in your country, you can become an electronic resident, that is, an electronic taxpayer. And for this you will pay only one simple tax – 5%, which our sole proprietors pay from turnover,” Zhelezniak said.
According to him, this mechanism may be of interest, in particular, to citizens of Asian countries. On the other hand, this will allow attracting additional funds to the national budget, he said.
“This proposal may not be so interesting to the United States or the EU, but it will definitely be interesting to other countries, especially Asia, the East, which have not a better reputation and more complex tax legislation compared to the Ukrainian one,” Zhelezniak said.

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UKRAINIAN GOVERNMENT APPROVES LAUNCH OF E-RESIDENCY IN UKRAINE

The Cabinet of Ministers of Ukraine at a meeting on Thursday approved the launch of electronic residency in Ukraine.
“This is one of the unique projects of the Ministry of Digital Transformation, which can make Ukraine a powerful East European IT hub. Thanks to e-residency, in the near future, our country will become attractive for foreigners to do business, primarily IT specialists,” Deputy Prime Minister, Minister of Digital Transformation Mykhailo Fedorov said, commenting on the decision on his Facebook page.
According to him, online, without the need to visit Ukraine, foreigners will receive a Ukrainian qualified electronic signature, registration number of a tax payer’s account card, the ability to open an online account with a Ukrainian bank, and simplified access to administrative services in Ukraine.
“We see foreign IT specialists working for Ukrainian companies, as well as specialists from countries of the Asia-Pacific region and neighboring countries, for whom the status of Ukraine’s e-resident will help to effectively cooperate in the European market, as the first e-residents. Of course, all e-residents will pass a thorough check in Ukraine by law enforcement, financial authorities and the Ministry of Digital Transformation,” he said.
According to Fedorov, in the near future, the Ministry of Digital Transformation and other government agencies will develop a regulatory framework for the launch of the project. It is planned to launch an e-residency portal by the end of the year.

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UKRAINIANS PREFER COMPANY REGISTRATION IN ESTONIA USING E-RESIDENCY, NEXT COMES FINLAND, GERMANY

Citizens of Ukraine have registered the most companies in Estonia using the e-residency system – 423 companies, the head of the Tallin office of Ilyashev and Partners Vitaliy Halytskykh has said. “Ukrainians top registrations – 423 companies, while 2,131 Ukrainian citizens have received e-residency cards. Next comes Finland – 315, Germany – 311. Demand is growing,” he said in an interview to the Kyiv-based Interfax-Ukraine news agency.
Some 3,444 companies have been registered using the e-residency card, while in November 2017 the number was 3,000.
“The e-residency card does not offer tax residency or the right to visit Estonia, but allows the use of all government services, including registering companies online, online banking, signing contracts electronically, serving motions online, et cetera – about 99% of all state services can be used online, and e-Residency in Estonia makes them internationally available. This has attracted Ukrainian business,” Halytskykh said.

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