Register an IT company in Ukraine with Diia City
The IT sector is one of the fastest growing in Ukraine. In addition to a comfortable tax regime for IT companies, the government is introducing a large number of new preferences for tax companies already operating or just starting up in Ukraine.
One of the latest innovations is the launch of Diia City platform - a new "space" in which IT companies can exist in Ukraine. Diia City solves a lot of problems that companies in Ukraine used to face before. Today we will tell you everything you need to know about registering an IT company in Ukraine if you plan to do it through Diia City.
Related article: Guidance on business registration in Ukraine: problems, investments, rules
Who can register an IT company in Ukraine with Diia City service?
To start an IT business or to switch to Diia City mode of operation, you need the simplest Ltd in Ukraine. The company is registered taking into account the activities you will be engaged in. A charter is drawn up for the company, which you can work out depending on your plans for the company.
Important! Only Ukrainian companies can be registered in Diia City. And such company must meet a number of criteria:
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The main activity of the company must be IT activities;
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The remuneration of the employees or hygienists must be at least €1200 per month;
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At least 9 employees and hygienists are involved in the project;
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Qualifying income from IT and other activities as defined by law is at least 90%.
Non-profit organisations, companies that operate in the gambling industry, even if they are licensed to do so, and those with a tax debt of more than 10 minimum wages for more than 30 days will not be able to become residents of Diia City.
Our company offers assistance with obtaining residency in Diia City - the whole procedure can be completed in a few days. The main difficulty is not registering in Dija City, but deciding whether it is profitable for you, as well as certain organisational aspects. for example, how to work further with your IT employees - through employment contracts, as with FOPs (sole proprietorship), or through gig-contracts.
Related article: How to keep personnel records and hire employees in Ukraine? Instruction for foreign investor
How to work with employees in Diia City mode?
Diia City provides a new type of contract for the Ukrainian IT market - Gig-contracts. They combine elements of an employment contract and a civil law contract. Hygcontracts are attractive to employers because they allow them to define the employee's working conditions slightly differently than those defined in the Labour Code, and not to be afraid of inspections by the controlling authorities.
Also, if you have planned an "international office", i.e. wanted to be able to invite foreign specialists to Ukraine to work, Dia City gives you the opportunity to employ foreigners to work in Ukraine without obtaining a work permit.
Related article: Legal audit of investments in Ukraine by examples
What taxes does an IT company in Ukraine pay in Diia City?
The Diia City tax regime provides for an income tax rate (in the case of the election of the special-purpose income tax) of 9%. However, according to Article 135.2 of the Tax Code of Ukraine, a rate of 9% applies to determine the tax base, which is defined as the amount of:
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dividend payments;
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payments of interest to non-resident related parties;
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provision of financial aid to non-resident Diia Citi;
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donation of property to a non-resident taxpayer under the special tax regime;
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payment of royalties in amounts exceeding the limit, etc.
Salaries, payments under hygienic contracts and royalties for the creation of an official work are taxed at the rate of 5%, if the amount of such payments does not exceed the equivalent of 240,000 euros per year.
You can choose whether you switch to the Diia City regime, or stay on another taxation system, while gaining other benefits of working with Diia City. The only restriction is that single tax payers (simplified tax system) cannot be residents of Diia City.
If you want an answer as to whether you should get residency in Diia City and what impact it will have on the economy of your business, contact us.
