44% more FOPs are closing this year compared to 2024

81,928 new sole proprietors (FOPs) have opened in Ukraine since the beginning of 2025. That’s 9% less than during the same period last year. At the same time, 119,895 entrepreneurs closed their businesses this year — a 44% increase compared to the same period in 2024.

This year, 37,967 more FOPs closed than opened. Last year, the situation was different: during the same period, 7,166 more FOPs opened than closed.

A quarter of all new FOPs work in retail — 20,763 entrepreneurs. Another 7,129 chose IT and programming consulting. Wholesale trade is in third place — 6,216 new entrepreneurs.

Most new FOPs this year were registered in Kyiv — 11.6 thousand or 14.2%. Dnipropetrovsk region comes next with 7.8 thousand (9.6%), followed by Lviv region with 6.1 thousand (7.6%).

This year, women are starting businesses more actively than men: 61% of new FOPs were registered by women, while only 39% were registered by men.

The Head of the Finance, Tax and Customs Policy Committee, Danylo Hetmantsev, told Opendatabot that the spike in FOP closures at the beginning of the year is mostly due to the shutdown of inactive FOPs, as the obligation to pay the Unified Social Contribution (USC) was reinstated from January 1.

«Inactive FOPs from groups 1 and 2 were closing down because pre-war USC payment rules were reinstated. Also, the military tax was set at a minimum of 800 UAH per month in 2025, regardless of whether the person is doing business or not. Since these FOPs are not actively working, they choose to close in order to avoid paying taxes. At the same time, starting in March 2025, more FOPs were opened (20,029) than closed (18,477). The same in April — 21,517 new ones, which is 3,899 more than closed», 

— Hetmantsev explained.

He believes that changes in FOP numbers do not directly reflect improvements or declines in the economy. That’s because the simplified tax system is often used to reduce tax payments or avoid mobilization — for example, by registering FOPs instead of hiring employees officially.

Economic and tax policy expert Oleh Hetman says these changes mostly affected so-called “sleeping FOPs” — people who didn’t do business actively or only occasionally. For those who were actively working and earning, nothing really changed.

«Of course, sometimes even active businesses shut down due to difficulties caused by the war. Entrepreneurs often mention lower consumer demand, lack of skilled workers, no access to cheap loans, and the dangers of war as the main challenges. But for active businesses, a military tax of 800 UAH per month is unlikely to be a serious problem»,

— said Hetman, coordinator of expert groups at the Economic Expert Platform.

Those who paused their business due to the war and are still unsure what to do will likely continue closing, but the situation should balance out soon. The expert expects that by the end of 2025, the number of FOP openings and closures will be roughly equal — unlike in previous years, when more new businesses were being created.

In the first week of May, a record number of FOP registrations was recorded for this year — 7,014. In total, 88,388 new entrepreneurs have been registered since the beginning of the year, as of early May.

Reminder: after the law to raise taxes for FOPs was passed, Opendatabot conducted a survey of entrepreneurs. As a result, 27% of respondents said they planned to stop their business activities.