Foreigners can Remotely Run Businesses in Ukraine: Launch of uResidency program

Ukraine's Ministry of Digital Transformation is taking one of its new services out of beta testing. uResidency—an electronic residency format—will allow foreign citizens to run their own businesses from Ukraine. To make the service popular, the government offers several advantages, including:

• Remote Registration: Potential e-residents can register from anywhere in the world without needing to travel to Ukraine, unlike other programs that typically require an in-person visit.

• No Accounting or Reports: The bank will handle accounting as the tax agent for the resident. They will be able to open a bank account online, and account management will be done through an app or a web version.

• Free Service: The only costs are taxes and a symbolic fee for opening and maintaining the accounts.

The program handles all complex and bureaucratic aspects, allowing entrepreneurs to focus on their tasks.

Tax Details:

uResidency is focused on individual entrepreneurs and will be most suitable for IT specialists and the creative class. This is also reflected in the tax policy. The tax rate is only 5%, with a cap on transactions up to €180,000. This rate aligns with the Ukrainian tax system for third-group individual entrepreneurs. If transactions exceed €180,000, the tax rate increases to 15%.

This approach attracts individuals, small businesses, and solo entrepreneurs. Over 1,000 interviews with potential participants revealed an average income of $40,000 annually, aligning with the program's capabilities.

Program Access:

The pilot service was launched in 2023. Since then, the Ministry of Digital Transformation has refined the program and amended Ukrainian legislation to ensure it works within legal norms. From July 2024, uResidency is available to residents of four initial countries:

• India

• Pakistan

• Thailand

• Slovenia

Future expansions will include more countries. However, restrictions apply:

• Residents of Russia and Belarus, which started the war against Ukraine, cannot become residents.

• Other countries were recognized as aggressors or occupiers of Ukraine.

• FATF gray and black lists.

• Countries identified by the European Commission with weak anti-money laundering and counter-terrorism financing regimes.

Ukraine's Aim:

Electronic residency aims to make Ukraine a hub for people running online businesses, especially digital nomads. These individuals may not be tied to one country or city but want to run a legal business. The uResidency program is designed for such professionals. 

For Ukraine, it means new tax revenues. The uResidency program will support Ukraine's economy during the war and rebuilding.

In the future, Ukraine will increase the number of countries whose citizens can use the service, thereby increasing the number of e-residents.

How to Apply:

The process to obtain e-resident status is as follows:

1. Application: Create an application through the mobile app or the Ukrainian e-residency website. Only a passport is needed. Login and password for tracking the application will be sent to the email.

2. Verification: Ukrainian authorities and uResidency team specialists will verify the application and profile for any disqualifying reasons. Verification is usually quick but can take up to 30 days in some cases.

3. Obtaining e-Resident Status: Schedule an appointment and visit a consular office of Ukraine in your country to receive an electronic signature and e-resident status.

4. Entrepreneur Registration: Register as an e-resident entrepreneur and open a bank account using the qualified electronic signature.

5. Bank Account Opening: E-resident entrepreneurs can open a bank account in Ukraine and conduct business within Ukraine’s jurisdiction.

Detailed information is available on the service’s website — https://e-resident.diia.gov.ua.

In summary, one of the most significant advantages of the program is its complete remoteness: potential participants do not need to visit Ukraine at all. All actions can be performed entirely online, including obtaining e-resident status. Business can be conducted from anywhere in the world.