Changes in the area of authorizing documents and starting business in Ukraine

by DLA Piper

Changes in the area of authorization documents

On April 9, Verkhovna Rada of Ukraine introduced changes to certain laws with regard to reduction of the number of authorization documents (Law of Ukraine "On Introduction of Changes to Certain Legislative Acts of Ukraine with Regard to Reduction of the Number of Authorization Documents"). The law takes effect from the date of its publication.

The law is intended to simplify the procedure for issuing permits and to reduce their list. In particular, the law releases business entities from the obligation to obtain the documents (consents, conclusions, etc.) required to acquire a permit. From now on, all actions related to execution of permits must be taken by the relevant regulatory authorities. This will significantly simplify the procedure of acquisition of permits by way of reducing the number of the documents to be obtained by a business entity in order to acquire a relevant document.

In addition, the law has significantly reduced the list of permits for doing business (in particular, in the areas of waste management, use of natural resources, sale of foodstuffs, including grain). Also, a number of other exemptions in the area of governmental regulation are expected, which are intended to simplify the business environment in Ukraine.

It is now prohibited to require from business entities any permits which are not included in the Law of Ukraine "On the List of Authorization Documents in the Area of Economic Activities" and which do not fall within state export control, financial services market regulation, state secrets protection, economic competition protection and nuclear energy uses. The law determines an exhaustive list of such documents, unless they pertain to exceptions as determined above.

Changes in the area of starting business

On April 15, Verkhovna Rada of Ukraine adopted the Law of Ukraine amending various legal acts simplifying order of starting business. The Law shall takes effect in 6 months after its publication.

The Law establishes that business entities could but are not obliged to have stamps and amends a number of laws directly stipulating that the documents have to be certified with a company's stamp only if the seal is available. Accordingly starting from the date when the law becomes effective legal entities would decide whether they require stamps in their business activity.

Besides the law simplifies the order to state registration of legal entities and private entrepreneurs. In particular simultaneously with submitting a registration card it would be possible to submit an application on choosing simplified taxation system or/and voluntary registration as VAT payer. The state registrar in its turn shall undertake to send an electronic copy of said applications to the tax authorities.

Thus, the adoption of the above laws testifies to the new government's intentions to reform the area of business regulation and to simplify it. Deregulation of the authorization system along with approval of an exhaustive list of permits and delimitation of duties of business entities and regulatory authorities will make it possible to reduce the administrative burden on businesses and to simplify business climate in most areas of business activities.

Written by:

DLA Piper

DLA Piper on:

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