Creation of a foreign holding in Ukraine

Ukraine is an attractive country for foreign investments, in particular for the creation of foreign holdings.

This is due to several factors, in particular:

• Stable economic growth;
• Competitive economy;
• Effective taxation system;
• Access to resources;
• Quality infrastructure.

The creation of a foreign holding company in Ukraine is regulated by the Law of Ukraine “On Holding Companies in Ukraine” and other legal acts.

The Law of Ukraine “On Holding Companies in Ukraine” defines a holding company as a legal entity that coordinates the activities of other legal entities that are under its control, regardless of their organizational and legal form and form of ownership.

So, a foreign holding is a holding company registered in Ukraine and controlled by foreign investors.

The creation of a foreign holding in Ukraine can bring several advantages, in particular:

• Expansion of sales markets
• Use of cheap labor
• Access to resources
• Cost reduction
• Legal regulation of the creation of a foreign holding in Ukraine

To create a foreign holding in Ukraine, the following requirements must be met:

• Foreign investors must have the right to invest in Ukraine.
• The holding company must be registered in Ukraine.
• A holding company must have a charter capital of at least 1 million euros.
• Registration of a foreign holding in Ukraine.

In general, the registration of a foreign holding in Ukraine is carried out by the procedure established by the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations”.

To register a foreign holding, the following documents must be submitted to the state registrar:

• Application for state registration of a legal entity.
• Application for choosing a taxation system.
• Certified translation into Ukrainian of constituent documents of a foreign legal entity.
• Documents confirming ownership rights of foreign investors to the authorized capital of the holding company.
• The state registrar considers the application for state registration within 20 working days from the date of its submission. If the application is approved, the state registrar enters information about the holding company into the Unified State Register of Legal Entities, Individual Entrepreneurs, and Public Organizations.

Taxation of a foreign holding in Ukraine

A foreign holding in Ukraine is subject to taxation on general grounds. The main taxes paid by a foreign holding are:

• Corporate income tax
• VAT
• Property tax
• Income tax

A foreign holding may also be exempt from paying taxes based on international treaties on the avoidance of double taxation.

Protection of the rights of foreign holdings in Ukraine

The rights of foreign holdings in Ukraine are protected by the Constitution of Ukraine, the laws of Ukraine, international treaties of Ukraine, and other legal acts. At the same time, the Constitution of Ukraine guarantees foreign investors the right to protect their legal rights and interests.

The Law of Ukraine “On Holding Companies in Ukraine” establishes special rules for the protection of the rights of foreign holdings, in particular:

• Foreign investors have the right to control the holding company.
• Foreign investors have the right to withdraw from the holding company.

Therefore, the creation of a foreign holding in Ukraine is a complex and lengthy process that requires compliance with certain requirements.

However, with the right approach, it can be a profitable investment for foreign investors.