Electronic residency in Ukraine

2022: Electronic Residency Law Passed

In October 2022, the Verkhovna Rada of Ukraine adopted a bill on electronic residency. The document, which was supported by 252 deputies, determines the relevant features of taxation of entrepreneurial activity.

The initiative will allow foreigners and stateless persons who have acquired the status of an electronic resident and registered themselves as an individual entrepreneur (FOP) to carry out entrepreneurial activities and pay taxes in Ukraine without leaving their country of residence (stay), explained Danilo Getmantsev, chairman of the Verkhovna Rada Committee on Customs and Tax Policy. The law allows the following:

• Obtain e-resident status;
• Register as FOP three groups without physical presence in Ukraine;
• Pay a single tax in the amount of 5% of the amount of income;
• Open an online bank account for business.

Law on electronic residence adopted in Ukraine

First Deputy Tax Committee of the Council Yaroslav Zheleznyak, who is one of the authors of the bill, expects that 1,000 foreign citizens will receive e-residency in 2022.

The list of countries whose citizens are allowed to become E-residents of Ukraine will be determined by the country's government. At the same time, it is already known that residents of Russia, as well as countries blacklisted by FATF and persons with incomes in Ukraine, will not be able to use the new service.

It is noted that taxation and reporting for electronic residents will be automated. This will contribute to the filling of the state budget of Ukraine and the development of the digital brand of the state, expected in the Ministry of Transformation of Ukraine.

"In short, this is an opportunity for foreigners to transport their business to Ukraine in a couple of clicks without having to move physically. This is a cool option for specialists in countries with a difficult political and economic situation to work with developed civilized markets and protect their incomes, "said Yaroslav [1]]

2020

Beginning of the experiment

At the end of June 2020, the Ministry of Digital Transformation of Ukraine announced the start of an experiment on electronic residency. It launches on July 1.

The ministry said that the first e-residents should be foreign IT specialists working for Ukrainian companies, as well as specialists from the countries of the Asia-Pacific region and neighboring countries, who will be able to effectively operate in the European market.

Ukraine launches electronic residency

In the coming months, the Ministry of Digital Science will ensure the preparation of a regulatory framework, determine the list of states for the introduction of the experiment and ensure the creation and functioning of a system that will become part of the Dіya public services portal. ^[2]

E-residency is one of the unique projects of the Ministry of Digital Science, which can make Ukraine a powerful Eastern European IT hub, says Mikhail Fedorov, Minister of Digital Transformation of Ukraine. - Thanks to electronic residency, in the near future our country will become attractive for doing business by foreigners - primarily IT specialists.

To implement the project, the Ukrainian Ministry of Internal Affairs, the Ministry of Foreign Affairs, the Ministry of Justice, the Ministry of Finance, the State Tax Service, the State Service for Special Communications and Protection, the State Service for Financial Monitoring within a month must ensure the development and adoption of regulatory legal acts, the creation of organizational, technical and personnel conditions necessary to fulfill the functions entrusted by the procedure approved by this decree.

It is noted that thanks to electronic residency, foreigners will receive online:

• Ukrainian qualified electronic signature;
• registration number of the tax payer's account card;
• the ability to open an online account with a Ukrainian bank;
• simplified access to administrative services in Ukraine.

The Ministry of Digital Science told about electronic residents

In mid-January 2020, the Ministry of Digital Transformation of Ukraine disclosed the details of the electronic residency project. It will allow foreign entrepreneurs to remotely establish and conduct their business in Ukraine.

As explained in the Ministry of Digital Science, an e-resident is a special status of a foreign citizen in Ukraine, who opens him access to information and consulting services, simplifies the procedures for obtaining administrative services and concluding civil law transactions, and also provides him with the opportunity to remotely establish and conduct business in Ukraine.

The Ministry of Digital Transformation of Ukraine revealed the details of the electronic residency project

The initial target audience of the Ukrainian electronic residency was chosen by five countries:, India,, and Bangladesh Pakistan. China These Philippines are the main service providers, the IToutsourcing department noted.

E-residents will receive the following privileges:

• Low taxes, avoidance of double taxation.
• Lack of paperwork.
• A platform for doing business with access to all the necessary services and the ability to carry out transactions online.
• Personal consulting support.
• English-language support service.

At the same time, Ukraine will also receive advantages. Among them are filling the state budget by taxing electronic residents and paying for services to provide e-residency status, as well as improving the national image in the international IT market.

According to the Deputy Minister of Digital Transformation Alexander Bornyakov, by mid-January 2020, a final decision was not made on the method of identifying the e-resident: whether it will be an ID card, Mobile ID or Smart ID. However, most likely, foreigners will have to visit the Ukrainian embassy at their place of residence to leave fingerprints: this is how international financial legislation requires, he said.^[3]

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