1.6 thousand sole proprietorships were opened by foreigners in Ukraine this year

1,648 Sole Proprietorships Were Registered by Foreigners in Ukraine This Year. This is 10% fewer than during the same period last year. Overall, non-residents make up only 0.7% of all new entrepreneurs in Ukraine this year.

At the same time, 1,158 foreign-owned businesses were closed during this period. The net growth amounted to 490 foreign entrepreneurs. In total, more than 213,000 entrepreneurs shut down in Ukraine this year, meaning foreigners account for just 0.5% of all closures.

Unlike Ukrainian entrepreneurs, most foreign business owners are men — 69%, compared to 31% women.

It’s worth noting that foreign entrepreneurs tend to be more resilient: the median lifespan of a foreign-owned business in Ukraine is 3.1 years. The record-holder is a woman with Russian citizenship whose business operated for 30 years before closing earlier this year. For comparison, Ukrainian-owned businesses last slightly less — about 2.5 years on average.

«Opening sole proprietorships by foreigners is a completely normal and legal practice. People who have a temporary or permanent residence permit in Ukraine receive a tax identification number (RNOKPP), which allows them to officially conduct business and pay taxes on the same terms as Ukrainian citizens. As for citizens of the Russian Federation — they are not an exception to this rule. Only those who legally reside in Ukraine can start their own business. In such cases, the procedure does not differ from registering a sole proprietorship by any other non-resident», 

— notes Denys Popov, Head of the Legal Department at Opendatabot, lawyer, and insolvency practitioner.

The largest share of new entrepreneurs comes from Azerbaijan — 229 FOPs (14%), followed by citizens of the Russian Federation — 222 (14%), Uzbekistan — 160 (10%), Moldova — 125 (8%), and Armenia — 95 (6%).

In contrast, citizens of Russia close their businesses most often — 241 FOPs (21%), followed by Azerbaijan — 157 (14%), Moldova — 102 (9%), Uzbekistan — 91 (8%), and Belarus — 69 (6%).

The vast majority of foreigners choose to do business in the trade sector — almost every third business. This area is also popular among Ukrainian entrepreneurs. It is followed by food services (14%), wholesale trade (9%), computer programming (6%), and information services (4%).

Most business closures also occur in these same sectors: retail trade (37%), computer programming (10%), and food services (9%).

Almost one in three foreign entrepreneurs starts their business in Kyiv — 544 FOPs this year. It is followed by: Odesa region — 300 FOPs (18%), Kyiv region — 138 (8%), Kharkiv region — 104 (6%), Lviv region — 83 (5%). The fewest foreign entrepreneurs are registered in Volyn, Chernihiv, Sumy, Donetsk, and Kherson regions — from 2 to 17 FOPs.

Most business closures also occur in the same regions: Kyiv — 297 (26%), Odesa region — 17%, Kharkiv region — 9%, Kyiv region — 8%, Dnipropetrovsk region — 5%.