Ukrainian E-Residency for Foreign Nationals

Introduction

Ukrainian e-residency offers a convenient and accessible online solution for foreign individuals, particularly IT professionals and consultants, who wish to benefit from Ukraine's favorable tax rates without physically residing in the country. This article provides an overview of the requirements and benefits of e-residency, as defined by the Tax Code of Ukraine.

Requirements for E-Residency

To qualify as an e-resident, a foreigner must meet the following criteria:

Age: The individual must be at least 18 years old.
Tax Residency: The person should not be a tax resident of Ukraine.
Qualified Electronic Trust Services: The applicant must have obtained appropriate qualified electronic trust services.
Registration: The individual needs to be registered in the E-Resident information system.
To be a citizen of the following countries: India, Pakistan, Thailand, Slovenia (the list of countries will be expanded).

Application Process

Foreigners seeking e-residency should submit an application for acquisition of e-resident status, along with their identification documents, through the E-Resident information system known as the "Dia" application. Once approved, the individual becomes an e-resident, gaining the status of an electronic single taxpayer without VAT, as well as receiving an electronic digital signature.

Taxation and Banking

E-residents are subject to a tax rate of 5% on their income, including VAT, up to a certain limit. The limit is calculated based on the equivalent of 1,167 minimum wages established by law as of January 1 of the tax year, which currently amounts to UAH 8,285,700 (approximately EUR 181,000 as of August 2024). Any income exceeding this limit is taxed at a rate of 15%. It is important to note that the resident's bank serves as the tax agent.

Communication and Limitations

All correspondence between e-residents and the tax authorities takes place exclusively through electronic communication in electronic form. Certain individuals are not eligible for e-residency, including Ukrainian citizens, foreigners with permanent residence rights or tax residency in Ukraine, stateless persons, and those receiving income from Ukraine for goods, works, and services (excluding passive income). Additionally, residents or citizens of countries/jurisdictions not included in the List of states whose citizens or residents can obtain e-resident status are also ineligible.

Additional Regulations for E-Residents

E-residents are only permitted to receive passive income originating in Ukraine, such as interest, dividends, and royalties. They are also restricted to providing services, producing, and selling goods exclusively to non-residents of Ukraine. Furthermore, e-residents are prohibited from employing Ukrainian citizens or residents.