How to Register a Sole Proprietorship (Fizychna Osoba-Pidpryiemets / FOP) in Ukraine

Registering as a sole proprietor, or fizychna osoba-pidpryiemets (FOP), in Ukraine is appealing because it’s fast, affordable, and straightforward. It’s particularly attractive for freelancers, consultants, and small-scale operators who value flexibility and minimal bureaucracy.

The process is now largely digital via the government’s Diia portal, making online registration both quick and efficient. Still, choosing the right tax regime and understanding social contributions can be a bit complex amid ongoing regulatory shifts.

Challenges include selecting the appropriate tax system and maintaining compliance with bookkeeping rules. Yet, the benefits (no minimum capital, simplified accounting, and speed) make it a highly accessible path to self-employment.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Ukraine?

In Ukraine, a sole proprietorship is officially known as a Fizychna Osoba-Pidpryiemets (FOP), which translates to “private individual entrepreneur”. As an FOP, you operate as an individual without forming a company, as opposed to a legal entity separate from yourself. You are entitled to all business profits and are personally liable for all obligations.

How does a sole proprietorship (FOP) work in Ukraine?

FOP vs other business structures in Ukraine

Step-by-step guide: How to register a sole proprietorship in Ukraine

Step 1: Check eligibility

You must be at least 16 years old, have a passport and Ukrainian tax ID (TIN), and a Ukrainian mailing address.

Foreigners just need a Ukrainian residential address to register as an FOP, but it’s highly recommended to have a temporary residence permit. In 2025, Ukraine launched the uResidency program, which allows some foreigners to register as FOPs without living in Ukraine.

Step 2: Choose your business name

You transact under your own name or specify a trade name in the registration form. Create your profile on Diia to proceed.

Step 3: Gather required documents

You will need:

• Passport (and notarized Ukrainian translation if you’re a foreign national)
• Ukrainian TIN (tax code)
• Ukrainian mailing address
• Chosen tax regime (general or simplified)
• Business activity code

Step 4: Register via Diia

Complete a registration form through the Diia portal, provide required documents, and choose your tax system. Registration typically takes 2 working days with the FOP record appearing in the USR and an extract issued.

Step 5: Pay fees and contributions

There’s no capital requirement. The registration is free via Diia.

Step 6: Post-registration obligations

If you chose the general system, register your income/expense ledger with the tax authorities. Simplified regime users do not need to register their income book.

You must register for social security contributions and value-added tax (VAT) if applicable. Keep accurate records and file returns accordingly.

Financial and tax obligations for sole proprietors in Ukraine

Income Tax (General System: PIT + Military Tax): You pay 18% personal income tax on net profits, plus 1.5% military tax, as applicable under the general system.

Simplified Tax (Single Tax System): Four groups exist with rates based on income and activity bracket. Simplified taxpayers often benefit from fixed or percentage-based rates with streamlined reporting.

Unified Social Contribution (USC): Beyond taxes, you must pay social insurance contributions per Ukrainian regulations. These are due monthly regardless of taxation system and relate to health, pension, and social coverage.

Value-Added Tax (VAT): If your annual turnover exceeds the VAT threshold (typically around UAH 1 million), VAT registration is required. The standard rate is 20%, with reduced rates applying to select items.

Recordkeeping: Maintain proper records of income and expenses. Under the general system, register your ledger with the tax authority. Under simplified taxation, you may keep your records in any convenient format.

Launch your contracting career and stay compliant with Deel

Registering as a Fizychna Osoba-Pidpryiemets (FOP) gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
• Create, send, and sign localized work agreements
• Keep accurate records for tax season
• Access expert tax advice and compliance support
• Get paid through multiple payment and withdrawal methods
• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

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