Ukraine will release ''e-Residency Ukraine'' program 5% tax income...sound interesting!!! Better like Estonia ???

[OTR365]

Looks like Ukraine did what Estonia wanted to do with its e-residency, but was unable to. This program looks very streamlined, I hope they later allow in also investors/traders, crypto people etc. I don't see banking as a problem, if one goes with Raiffeisen etc.

In total, I've spent about six months in different Ukrainian cities. I did not encounter any problems, other than language difficulties and occasional bad customer service. That you'll find everywhere in Eastern Europe. If one manages to avoid the police (don't drive a car maybe?) and does not use public health services, a lot of corruption can be avoided.

 

[JosephLL]

Maybe I don't get it , but it differs from Estonia in a fundamental way. This is for sole proprietor only, so the e-residence is freelancer/employee oriented not company oriented.

 

[csp dubai]

hmm i ma not sure , about banks will be so easy to handel, i am not sure you can easly move the funds outside ukraine so easy

 

[Yoyo331998]

hmm i ma not sure , about banks will be so easy to handel, i am not sure you can easly move the funds outside ukraine so easy

I’m not sure how is it now but in 2019, an individual resident could transfer abroad the equivalent of 100k€ per year but legal entities and private entrepreneurs could transfer 2mil€ per year.

 

[JustAnotherNomad]

Is this only for foreigners or also for Ukrainians? Because a LOT of Ukrainians have used Estonia's e-residency program to reduce their taxes (illegally). So it might just be a way for them to try and get people to move their businesses back to Ukraine.
And all Ukrainians you talk to will tell you that the administration is terrible. I really wouldn't want to have to deal with Ukrainian authorities.

 

[Marzio]

Is this only for foreigners or also for Ukrainians?

The e-residency is for foreigners but "private entrepreneur" is an option that all Ukrainians can access.

 

[JustAnotherNomad]

The e-residency is for foreigners but "private entrepreneur" is an option that all Ukrainians can access.

Sounds a lot like Estonia then. Obviously e-residency is only for foreigners since local residents would have their own national identity card instead.

 

[Marzio]

Sounds a lot like Estonia then.

The real advantage here is that becoming an Ukrainian e-resident will make you tax resident in Ukraine without ever spending a day there.

 

[Nishizawa]

I'm skeptical that this can really work for opening a Ukraine offshore account.

In the case of Estonia, traditional banks have rejected e-residency holders because they are 'high risk' or 'have no connection with Estonian business'. All they were allowed to do was to open an EMI accounts like transferwise and holvi.

 

[JustAnotherNomad]

The real advantage here is that becoming an Ukrainian e-resident will make you tax resident in Ukraine without ever spending a day there.

I don't think that's the case, that wouldn't make much sense.
They way I've understood it, they give you a digital signature, like in Estonia, and explicitly give you the option to use this for remote bank account opening. And if Ukraine hasn't joined CRS yet, then it could obviously be useful to some people. But it will likely also cause issues when drug money starts flowing in.
You can use the digital signature to register as a sole proprietor in Ukraine. And sole proprietors can choose between a 5% revenue tax or an 18% profit tax.
But if you live in a high tax country, that country would usually tax your worldwide income as an individual, so you'd be looking at 5% tax in Ukraine + tax in your home country. Good luck sorting that out. Unless of course you're hoping that you just won't be caught since Ukrainian banks don't report yet.
I think the chances to save taxes with this are slim. Maybe it would make it easier to get a "secret" bank account, that's it.

On the other hand, if someone does a lot of business in Ukraine, it could indeed make it easier to sign documents and stuff.

 

[Marzio]

I don't think that's the case, that wouldn't make much sense.

Read point #2

 

[Marzio]

But if you live in a high tax country,

Of course this is not how to use this e-residency. The type of person that would benefit most ftom this would be a digital nomad that constantly travels and never settle too long anywhere to trigger tax residency.

 

[JustAnotherNomad]

Read point #2

Interesting! But then again, who would want to do business as a Ukrainian sole prop?
And if you had some transparent structure like a US LLC, you'd really need to check how Ukraine would treat that.

 

[JustAnotherNomad]

I have thought about this a little more. I really find it hard to believe that this should work. You usually have to be a resident to register as a sole proprietor, in pretty much every country.
That's why e-residents cannot register as sole proprietors in Estonia, because e-residency has nothing to do with residency.
Obviously if you're a resident of Ukraine, you can register as a sole proprietor. And getting residency there might be easy if you have an EU passport, for example.
So then the digital signature would make it easier to use government IT services. But you could probably do the same thing today, you might just have to do it in person.
On the other hand, as a non-resident of Ukraine, I really can't imagine you'd be able to register as a sole proprietor.

 

[smartchoice]

I don't think that's the case, that wouldn't make much sense.
They way I've understood it, they give you a digital signature, like in Estonia, and explicitly give you the option to use this for remote bank account opening. And if Ukraine hasn't joined CRS yet, then it could obviously be useful to some people. But it will likely also cause issues when drug money starts flowing in.
You can use the digital signature to register as a sole proprietor in Ukraine. And sole proprietors can choose between a 5% revenue tax or an 18% profit tax.
But if you live in a high tax country, that country would usually tax your worldwide income as an individual, so you'd be looking at 5% tax in Ukraine + tax in your home country. Good luck sorting that out. Unless of course you're hoping that you just won't be caught since Ukrainian banks don't report yet.
I think the chances to save taxes with this are slim. Maybe it would make it easier to get a "secret" bank account, that's it.

On the other hand, if someone does a lot of business in Ukraine, it could indeed make it easier to sign documents and stuff.

1- the issue with drug money it's nonsense...they don't need an e-residency program to do this.

2- 5% tax urkraine+ tax in your home country again useless. why you are here? why everybody is on this forum..to find the best solutions. you tell me you can't save taxes, it does not exist solution is the stupid thing I hear on this forum. Why you are here? if this is your thinking you are in the wrong place

3- Estonia is a great country with great people -but the bank system it's in the stone age... compared with Ukraine, for this reason, the e-residency is a fiasco (personal opinion), not to mention 25% on dividend tax even they mention only 20% + all the info about company public...privacy zero.

Like I said before I don't know if this program will work or no, definitely will have problems because it's new.. but some come here and comments all bulshit: corrupt country, money laundry drugs.. USA will start the war in Ukraine, etc it's nonsense for this type of forum.......maybe the admin can open a political section, and all these negativist guys can go the talk this all day longs. Let see the program up and running and we can comments if it's good or not all day longs...

I saw the same bulshit with Salvador's post ...great country, great people...you can live there without problem if you don't look for trouble, do not make politics and don't grab attention to you. Also, I remember when I told my friends I will go for 1 year in Columbia..again the same bulshiit , drug cartel you will die etc Gues what noting happened.. a great country with great people..

The perfect country or tax regime does not exist anymore... in the next 5 years we are f**k by the new world ... it will be very hard or maybe impossible to have 0% tax, but we adapt we grow we change... we are here to learn new thing to discover new solution..not to comment bulshit about politics, corruption just because you read the news and watch tv, etc..but you never live in this country ...It stupidity to comment for example ''this car it's not good''..but you only see a picture of the car.

I am a lucky guy, I live over the world in so many countries from months to years...something perfect doesn't exist, all countries are corrupt more or less. Let hope we will see this program live and I'm sure we can comment then all day longs if it's a good solution for some of us or not.

 

[smartchoice]

I have thought about this a little more. I really find it hard to believe that this should work. You usually have to be a resident to register as a sole proprietor, in pretty much every country.
That's why e-residents cannot register as sole proprietors in Estonia, because e-residency has nothing to do with residency.
Obviously if you're a resident of Ukraine, you can register as a sole proprietor. And getting residency there might be easy if you have an EU passport, for example.
So then the digital signature would make it easier to use government IT services. But you could probably do the same thing today, you might just have to do it in person.
On the other hand, as a non-resident of Ukraine, I really can't imagine you'd be able to register as a sole proprietor.

1-e residency program is not for Ukraine residents
2- can you do business as sole proprietors in Estonia with e -residency, yes you can
3- e residency Ukraine it's not about digital signature

 

[John Spectre]

It's a total bulls**t program from the new government who want to get some money
- for sure for PE (private entrepreneur) person need to became tax resident of Ukraine.
- you can't have company, only PE option which limit options a lot.
- no ukrainian banks will open account remotely, don't dream about it and you can't open foreign bank account for this, as this option restricted . Even re-KYC for UA passport holders required personal visit to bank each year for due diligence. So you will be welcomed to banks too. And don't forget that almost nobody speak english in bank
- banks will have strict currency control and many things allowed in EU or USA as example don't possible in Ukraine at all. Good luck with follow all the rules
- you can't simple send money abroad once they come to UA banks
- 5% tax a limited for turnover up to 7 mil UAH (around 200,000 EUR) per year.
- it have strict requirements for accounting, paperwork etc. If you not follow it - welcome to pay ~41% - 60%(personal income, VAT, SSC, etc) of taxes plus penalty.
- a lot of things for PE are not possible for 5% tax: like a stocks, crypto, dividends, etc. It would just go through the personal income tax 19.5%
- even with general 5% tax you could simply do things that could require additional taxes like a VAT, or SSC for part of your income
- welcome to bureaucracy country: taxmans, bank managers, and all other stuff will just laugh in front of your face when you think that all rules could be simplified because you have e-residency card.

So, literally, this setup would not be usefull at all:
- very small turnover limit, no possible to do company, no possible to do all things remotely.

 

[Martin Everson]

The real advantage here is that becoming an Ukrainian e-resident will make you tax resident in Ukraine without ever spending a day there.

This type of tax residency will not be recognized anywhere but with maybe some aborigines in the outbacks of Australia.

 

[John Spectre]

This type of tax residency will not be recognized anywhere but with maybe some aborigines in the outbacks of Australia.

I know your skepticism about the countries of the ex-USSR, but in fact, if this program will go further, all necessary documents required for prove residence could be issued without problem. Tax residency certificate, PE documents, e-residency card - all documents would be issued by government, could be verified as well as online(from public register) as well as apostilled/translated depend on the requirement.

 

[smartchoice]

I know your skepticism about the countries of the ex-USSR, but in fact, if this program will go further, all necessary documents required for prove residence could be issued without problem. Tax residency certificate, PE documents, e-residency card - all documents would be issued by government, could be verified as well as online(from public register) as well as apostilled/translated depend on the requirement.

true, also you say about bank opening remote ...the big problem in Estonia...its the government its a pussy...Every person which has an e-residency card ...need to do all the check by the government +pasport id, fingerprint all KYC ...so for a bank to open a bank account remote in my name I don't see the issue... the issue is the government don't have balls to force the bank (guess why)... bank doesn't need the KYC.. they can have all the info about me from government...all the programs e residency Estonia, offshore, Dubai, etc have only on thing in his mind to make money...nothing else... they don't give a s**t about who qualified or not