top of page


8 November 2022

In a bid to reinvent itself as a digital offshore zone, Ukraine launches an e-residency scheme. Under it qualified nonresidents will be able to work remotely, use a Ukrainian bank account and access other Ukrainian e-services, all in exchange for a 5% gross income tax.

By amending the Tax Code and some other laws, the country is setting up an e-residency regime, due to take effect on 1 April 2023, that would enable qualified foreign individuals to claim Ukrainian taxpayer status. Participants will be taxed at a 5% flat tax rate (subject to the upper limit of about UAH 7,600,000 a year, i.e., roughly USD 180,000 at the exchange rate as of this writing, and 15% on amounts above that) on the gross proceeds received into a Ukrainian bank account.


A good deal for some, assuming the money is not taxed elsewhere. Members will also be given access to various Ukrainian governmental e-services, such as getting an e-signature, processing transactions, and remotely generating commercial and administrative documentation. For now, there is no provision for company registration as e-residents. Candidates are already encouraged to apply, even before the system is fully online.


The e-residence scheme is a purely commercial arrangement. It entitles one neither to actual residency in Ukraine nor even to visiting or staying in the country for any length of time.


Joining the scheme starts with registration, which is done remotely. There is no joining fee. Once the authorities process the application, particularly checking that no money-laundering issues are implicated, they will issue an e-residency confirmation. The applicant can then open a bank account at a Ukrainian bank of his choice. The account can be used to collect client payments, from which the bank will automatically withhold a 5% tax, also handling the related paperwork. There is no need to visit any offices, whether in Ukraine or abroad, or have other physical contact with anyone, either to join the scheme or to work under it.


There are conditions as to who can participate. E-residency is not available to Ukrainian nationals or foreigners resident in Ukraine, stateless persons or those deriving income from Ukrainian sources (other than passive). Nationals of unfriendly countries or those blacklisted by FATF can also be excluded.
Most jobs qualify, including in manufacturing, provided the supplies go to clients outside of Ukraine. So craftworkers, professionals, freelancers and other electronic nomads are all wanted. There is no time limit on e-residency, and so it does not have to be renewed periodically.


So who can benefit from the Ukrainian e-residency scheme? Mostly nationals of the countries with Ukrainian tax treaties that remove double taxation. Indeed, that being, in essence, an offer to use a Ukrainian bank account in exchange for a 5% tax on the receipts, signing up will only make sense if the money is not taxed in the worker’s country of origin. This also implies applicants should be able and willing to tackle the paperwork needed to establish the exempt status at home.


The other question is will people flock to e-residency? Time will tell. One thing is clear though – the status will only be worth pursuing if it will involve tax reduction for the worker. That takes a home jurisdiction charging an effective tax rate of more than 5% on gross income (let alone where a worker hails from a tax-free zone), plus a good tax treaty. No amount of digital inducement will change that. The other thing, of course, is that one may gamble on not being caught at home, hoping that Ukraine does not share the information. In any event, some may decide to join just to be on the cutting edge.

Back to legal updates

bottom of page