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As in Estonia: Rada supported creating e-residency in Ukraine

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E-residency, or electronic citizenship, is in force in Ukraine from July 1, 2020. Photo: Pixabay

E-residency, or electronic citizenship, is in force in Ukraine from July 1, 2020. Photo: Pixabay

On July 13, the Verkhovna Rada, adopted the draft law No. 5270 on e-residency in the first reading with 286 votes in favor. The document provides foreigners and stateless persons with the opportunity to work in the IT sector and pay taxes without being present in Ukraine.

If earlier the Ukrainian e-residency did not provide an opportunity to conduct business activities in Ukraine, then the new bill solved this problem. Its task is to regulate the mechanisms of taxation of e-residents and provide them with certain opportunities:

  • remote registration of an e-resident as an individual entrepreneur;
  • conducting entrepreneurial activities in the jurisdiction of Ukraine;
  • opening bank accounts online;
  • access to administrative services with a qualified electronic signature.

The Ministry of Digital Transformation is responsible for the e-residency project in Ukraine. The e-residency project was drafted until 2022, and the Ministry of Digital Transformation believes that by that time about 3,000 e-residents will be registered in Ukraine, and the state budget will receive at least $1.5 million in additional taxes.

People's Deputy Yaroslav Zhelezniak said that this bill is an experiment following the model of Estonia (Estonia has been granting foreigners the right to "electronic citizenship" since 2014—The Page). Foreigners with e-residency will be able to work in Ukraine, pay taxes here and represent the country in international contracts. They only need to pay a tax of 5%, like a common individual entrepreneur.

Context. E-residency, or electronic citizenship, is in force in Ukraine from July 1, 2020. This is a special status of foreign citizens in Ukraine that gives them access to information and consulting services, simplifies the procedures for obtaining administrative services and making civil transactions, and also provides an opportunity to remotely establish and run business in Ukraine.

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