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The Verkhovna Rada passed the law on e-residency. What it means and how it works

During its session on Thursday, October 6, the Verkhovna Rada of Ukraine adopted draft law No. 5270 on e-residency. Member of parliament Yaroslav Zhelezniak wrote about this in his Telegram post.

This decision was supported by 252 MPs.

The newly passed law provides for granting foreign citizens a special status that allows them to conduct business in Ukraine.

How to become an e-resident?

In order to obtain this special status in Ukraine, foreign nationals need to register with the Diia application and pass a financial and security check. After that, one needs to open a bank account (can be done remotely). The respective bank will be the tax agent for the e-resident.

After that, the e-resident is granted a work permit in Ukraine, which implies that a 5% income tax will be payable, and the annual income will be subject to limits set for individual entrepreneurs of the 3rd group, which is 1,167 times the monthly minimum wage (in 2022, it’s UAH 7,585,500 or about $205,000).

The Cabinet of Ministers will decide which countries' citizens can become e-residents of Ukraine.

According to preliminary estimates, 1,000 foreigners will be granted e-residency by the end of the year.

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