If you are planning to start your own business, one of the simplest ways to operate in Ukraine is to register as a sole proprietor — a FOP (ФОП).
This form of doing business is particularly suitable for small businesses and individuals providing services independently, as it does not require the establishment of a legal entity, formation of share capital or preparation of constitutional documents. A sole proprietor may choose the simplified taxation system, independently manage income received from business activities, while accounting and termination of business activities are generally simpler compared to a company.
At the same time, operating as a FOP has certain specific features. In particular, a sole proprietor is liable for obligations related to their business activities with their property in accordance with Ukrainian law.
In addition, registering as a FOP does not automatically provide legal protection for the name or brand under which the business operates. If a sole proprietor uses a separate brand for their goods or services, trademark registration should be considered to ensure its legal protection.
In 2026, a FOP can be registered in several ways: online through the Diia portal or by submitting documents to a state registrar, including through an Administrative Services Centre (CNAP) or a notary.
FOP Registration through Diia
The simplest way to register as a sole proprietor is through the Diia portal. In this case, there is no need to visit an Administrative Services Centre or a state registrar in person.
To register, an individual needs to log in to the Diia portal, select the automatic FOP registration service, complete the application, specify the relevant KVED activity codes and taxation system, and sign the application electronically.
The service is free of charge. The application is submitted to the Unified State Register electronically and, provided there are no grounds preventing registration, the state registration is carried out automatically.
Therefore, if the future entrepreneur has already determined the types of business activities to be carried out and the appropriate taxation system, the entire registration procedure can be completed online.
Registration through an Administrative Services Centre or a Notary
A FOP may also be registered offline by applying to a state registrar, including through an Administrative Services Centre (CNAP).
An application for state registration of an individual as a sole proprietor must be submitted. When submitting documents in person, the applicant must present an identity document. Documents may also be submitted by an authorised representative, provided that their authority is properly documented.
State registration of a FOP is free of charge. As a general rule, the documents are reviewed within 24 hours of their receipt, excluding weekends and public holidays.
Another option is to apply to a notary who is authorised to perform state registration functions. No administrative fee is charged for the state registration itself; however, the cost of the notary’s services should be taken into account.
Therefore, for a standard registration, Diia will generally be the most convenient option. At the same time, registration through an Administrative Services Centre or a notary remains available, particularly where an individual prefers to submit the documents in person.
Choosing KVED Activity Codes
Before registering as a FOP, it is necessary to determine the types of business activities the entrepreneur intends to carry out and select the relevant codes under the Ukrainian Classification of Economic Activities — KVED.
One KVED code is designated as the principal activity, while additional types of activities may also be included.
When selecting KVED codes, it is advisable to consider not only the activities that will be carried out immediately after registration, but also possible future areas of business development.
At the same time, adding every possible KVED code without prior analysis is not always appropriate. Certain types of activities may be incompatible with a particular group of the simplified taxation system or may require a licence or another permit.
If necessary, KVED codes can also be changed or added after the FOP has been registered, including online.
Choosing a Taxation System
Another important issue is choosing the appropriate taxation system. A FOP may operate under the general taxation system or, provided that the statutory requirements are met, under the simplified taxation system.
Under the general taxation system, personal income tax is charged at the rate of 18% on the entrepreneur’s net taxable income, meaning the difference between income received and documented expenses related to business activities. In addition, a 5% military levy and the Unified Social Contribution are payable in accordance with the applicable rules.
The simplified taxation system provides for several groups of single taxpayers. Groups 1, 2 and 3 are generally relevant for sole proprietors.
The appropriate group depends on the type of business activity, the amount of income, the number of employees and the persons or entities to whom the entrepreneur intends to sell goods or provide services.
In particular, Group 3 provides for a single tax rate of 5% of income for non-VAT payers or 3% of income where VAT is paid. In addition to the single tax, in 2026 Group 3 FOPs are subject to a military levy of 1% of income.
For Groups 1 and 2, the single tax is calculated under different rules and depends on the maximum rates established by law. A fixed military levy also applies to these groups.
Therefore, the taxation system should not be selected solely on the basis of the lowest tax rate. The type of activity, expected turnover, future counterparties and the overall business model should also be taken into account.
VAT Registration
The need to register as a VAT payer also depends on the taxation system selected and the nature and scale of the FOP’s business activities.
For example, a Group 3 FOP may choose a 3% single tax rate combined with VAT registration or a 5% rate without VAT.
For entrepreneurs operating under the general taxation system, mandatory VAT registration arises in the circumstances established by the Tax Code of Ukraine. In particular, the statutory volume of taxable transactions during the preceding 12 calendar months must be taken into account.
VAT registration may be particularly important for entrepreneurs whose main customers are VAT-registered companies, who make significant business purchases or who expect substantial turnover.
What Should Be Done After FOP Registration?
Once the relevant information has been entered into the Unified State Register, the entrepreneur may commence business activities. However, depending on the particular business model, state registration alone may not be sufficient.
The entrepreneur may need to open a business bank account, properly maintain records of income and expenses and, where required, register a cash register or software cash register (RRO/PRRO), employ personnel in compliance with labour legislation, register as a VAT payer or comply with other statutory requirements.
It is also important to determine whether the chosen business activity requires a licence, permit or a specific registration or notification procedure.
This may apply, in particular, to medical practice, certain types of transportation services, activities involving alcoholic beverages and tobacco products, food-related businesses and other activities subject to special statutory requirements.
Therefore, registering as a FOP is only the first step in starting a business. Before commencing operations, it is advisable to determine which tax, registration, licensing and other regulatory requirements apply to the particular type of activity.
Conclusions
In 2026, an individual can register as a sole proprietor in Ukraine online through the Diia portal or offline through a state registrar, including an Administrative Services Centre or a notary. The state registration procedure itself is relatively straightforward and, in most standard cases, can be completed without professional assistance.
However, choosing the correct KVED activity codes and taxation system and properly organising the business after registration are considerably more important. Mistakes at this stage may result in incorrect taxation, the need to change the applicable single tax group or disputes with the tax authorities.
It is also advisable to determine in advance whether the particular business activity requires the use of RRO/PRRO, VAT registration, licences, permits or other special procedures.
Law Firm “Kavchuk & Partners” provides legal support for starting and operating businesses in Ukraine, including advice on the appropriate business structure and taxation system, selection of KVED activity codes, state registration of sole proprietors and obtaining the licences and permits required for business activities.
