It business

Ukraine is among world IT outsourcing leaders so setting up an IT company in Ukraine is not something new and unreasonable. I know some americans doing just like that.

Just yesterday Forbes published another article about Ukrainian IT sector. The article's title reads "Could Ukraine Be The Next Silicon Valley?".
Here is the link: http://www.forbes.com/sites/gregsatell/ … on-valley/

Plus, IT companies enjoy a special preferable taxation regime (5% corporate tax and 0% VAT). There are also venues for reducing even these modest taxes. If you like I can email you information about taxation of IT business in Ukraine or you can google it.

As to Cernauti, it is a nice town with an old university. So there must be plenty of young programmers. At the same time, people can move there if the jobs is worth of that. Taking into account that Cenrauti is really nice, it should be easier to decide on the move.

Thank you for your help and please send me the details on [email protected].
Can you help me also with a popular site for recruitment?

I emailed you. Pls check it out.

Can anyone help me with a popular english site  in Ukraine for recruitment?
Thank you in advance!

hh.ua

The current situation in Ukraine is not very good and stable to start an IT company for outsourcing.

There are currently many electricity problems (random fall out for unknown of time) and your developers can be taken for army at any moment. With this you can not build a stable and reliable company.

So my advice, search in Ukraine for developers who want to leave Ukraine and work in your office in Romania. Currently this happens a lot, but then with Poland.

Plus, IT companies enjoy a special preferable taxation regime (5% corporate tax and 0% VAT).

1. How long will this stay? Ukraine is broke and needs money. The only way to get money is to make taxes higher. This will happen, but nobody knows.
2. A Private Entrepreneur pays also 5% (at least still). So you hire your developers as PE and your company in UA does not make any profit. I do not advice to put money to Ukraine, because every euro you send there, you need to sell 75% to grivna. This grivna did fall in 1 year from 11 to 20 for a euro.

Tantuss is basically right. Nevertheless, investing is always risky. Especially it is risky in IT ventures. I am not an IT manager yet I follow Ukrainian IT venture market and have some experience in IT business. So I would like just add a few remarks.

Ukraine is in the war and economic turmoil. Now, in general, it is a bad investment venue. At the same time we are discussing IT sector that is a very unique realm.

Drafting of people to the war – yes it is possible.

Electricity problems – yes it happens. The electricity supply is switched off for a couple of hours in some areas through the country for the sake of decreasing electricity.

Favorable taxation regime. It is hard to forecast whether they will abolish this regime or not. There is an IT lobby and a great work is done in order to develop this sector of economy. So the tax might be abolished or might not.

Structuring your IT business through private entrepreneurs (PE) is very widespread in Ukraine. It does help to save on taxes a lot. But it is not the perfect solution. In particular:
-    PE have a cap of income. In case of reaching this limit the PE has to pay regular taxes;
-    not everyone agrees to register himself as a PE;
-    it happens that the tax services rules that such PEs are in fact hired employees and using PEs is tax evasion.

Speaking about advantages of Ukrainian IT sector we think about Ukraine being one of leaders in IT outsourcing. This means that Ukrainian developers ask less money and produce products that cost more abroad. In fact, the worse situation in Ukraine, the bigger Hryvnia drops, the better for foreign customers as they pay in foreign currency.

The fact that incoming foreign currency has to be converted into Hryvnia is more a problem for Ukrainian importers as they need to find foreign currency to pay their foreign suppliers.

The bottom line – Ukraine is really in a very bad situation. However, speaking about IT, I am sure there are still opportunities to earn profit.

I think I know this practice of PE because it's used, with more rules, in my country. A PE is a service provider and he has to make invoices to his client (that in reality is his employer). A few years ago this system was more permissive but now you have to use it but without “giving” the idea of dependence.
For example, a provider of informatics services has an amount established every year, different from town to town. If a person registered himself as a PE and in the same time she is employed with a full-time contract, this amount will be divided by 2. It is in important advantage because all the taxes are calculated on this base.  Like I said, in the past, the system allowed us to be PE and employed in the same company. Now it is no more possible, because you will be judged like dependent to your client (by obtaining a regular and singular income) and you'll be submitted at the same taxes as an employee.  But other ways were founded to avoid these dependence criteria..
What is the difference between the taxes of a PE and an employee?
Thank you all!

PE: 5%
Normal employee: something like 35% including social things.

PE has max of 3 mln grivna per year.

Believe me, PE is the way to go. They do not get any problems. I know many companies who work already for more than 3 years with it. Nobody had every problems.

Hello,

This market has loads of fine candidates and the whole situation for business seems to be going to change for better. The case is that the government now has to work for improving of relationships with private business according to the Association Agreement with the EU. Please find more information re the changes upcoming here: hg.org/article.asp?id=34299

Dear Olga,
I am still waiting for your legal advice regarding registration on a dacha...It's been a month since I got my permanent residence,but without a registration I am going to be fined plus I can't apply for my husband...please e-mail me [email protected]. You mentioned some legal advice. Thank you.

Hi!
I`ve send you a message on e-mail on December 25th 2014. Could you please check it?

Regards,
Olga

If in few words - I don`t see any problem for you because the legislation is now very accommodated and clear      re this question. I suppose you have missed some required steps or requirements in the process because otherwise you shouldn`t have had these problems. But I can`t say which exactly `cause I don`t know the details. So I asked these questions in the e-mail.

I think you should  start from the beginning and address to the state organisation called "OVIR" (ОВІР - ua). Here are the web-sites with info (I`m not sure they have English version) - ovir.org.ua/, ovir.info/dokumentirovanie-inostrancev/dokumentirovanie-inostrancev-i-lic-bez-grazhdanstva
If you find it too hard to deal it by yourself (I know the bureaucracy is terrible) and you have less of time you should address to a lawyer who will conduct this easily.
But just keep in mind that if you sort this out and do everything carefully step by step you will get what you need legally.