[ESTABLISHING A BUSINESS ENTITY IN UKRAINE] 515
monetary valuation approved by the unanimous decision of the General Participants Meeting (Sole Participant). If the value of the LLC's net assets has decreased by more than 50 per cent compared to this indicator at the end of the previous year, the LLC's executive body convenes a General Participants Meeting, which must decide on the measures to be taken to improve the financial condition of the LLC, on reducing the statutory capital of the LLC or on liquidating the LLC. 4.3. Any special business or investment visa issues As a general rule, in the case of a visa-free regime (applicable, in particular, for EU citizens), foreigners can stay on the territory of Ukraine for not more than 90 days during a 180-day period. A longer stay requires obtaining other grounds for stay, e.g., a temporary residence permit. In Ukraine, there are no specific business or investment visas. However, foreign investors may obtain a temporary residence permit if they comply with the following requirements: • a foreigner/stateless person is a founder/participant/UBO of a Ukrainian legal entity; • the amount of participatory interest of a foreigner/stateless person or foreign legal entity where such foreigner/stateless person is a UBO in the statutory capital of a Ukrainian legal entity is not less than 100,000 Euro. In addition to mentioned above, Ukrainian legislation also contains other grounds for obtaining a temporary residence permit by a foreigner (e.g., if a foreigner is employed with the LLC and has a Ukrainian work permit). A foreign investment in Ukraine’s economy in an amount of not less than 100,000 USD is also
4. Capitalization Obligations, Residency and Material Visa Restrictions, Tax Issues 4.1. Any significant barriers to entry for a foreign party Foreign Investment, In general, there are no barriers for a foreign party to be a participant in an LLC (except for certain particular cases, e.g., limitations in this respect of residents of the Russian Federation (both legal entities and individuals) due to imposed restrictions as a result of the military aggression of the Russian Federation against Ukraine). Still, some restrictions related to further business activities of the company with foreign investments may apply (e.g., related to
certain activities with plots of land). 4.2. Any capitalization obligations
There are no requirements regarding the minimum amount of the LLC’s statutory capital, however, it should be more than 0 (zero) UAH. Usually, it is advisable for the founder(s) to consider initially forming the statutory capital in an amount that covers at least first-time expenses of LLC (e.g., salaries, lease of the premises, accounting/HR or other services, office/production appliances, etc.). The information on the statutory capital is registered in the State Register only in Ukrainian currency (UAH) upon the registration of the LLC. The statutory capital is formed by the contributions of the participants in monetary (including in foreign currency) or in-kind forms within six months from the date of the registration of the LLC unless another deadline is established in the AoA. The contributions made in foreign currency shall have the equivalent in Ukrainian currency (UAH) in a decision of the General Participants Meeting (Sole Participant). The contributions made in kind should have the
ILN Corporate Group – Establishing a Business Entity Series
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