You probably know that the banking system in Ukraine isn’t that great and that the country has many deeply rooted issues that will take decades to remedy, including crony capitalism and corruption.
Most likely, you’re also aware of the armed conflict in which it is currently involved with Russia, and many other things playing against Ukraine as a country that people would like to live in.
But very often, one’s love for a country can’t be explained rationally.
If you’ve visited Ukraine and fell for its friendly people and cultural charm, you might have even thought about moving there.
Or, perhaps you’ve heard about its favorable tax regime, its affordable cost of living, and its quick access to the European Union and would like to take a chance and invest in an up-and-coming economy.
You’ll be glad to know that you can actually move there quite easily. That’s because Ukraine offers a residence by investment program.
For years, it has accepted foreigners from any country in the world who are willing to inject $100,000 in capital into the Ukrainian economy and has offered them a permanent residence permit in exchange for their investment.
Anyone interested in residing in Ukraine can do so by opening a company in the country and then using that company to purchase real estate.
That’s the path most commonly taken by real estate investors who want to benefit from a permanent residence permit in Europe but who don’t want to run an actual business or take on the added risk of doing so.
Interested in finding out more? Read on to find out if you’re eligible, how you can apply, and if it’s even worth your while.
The purpose of this article is not to ‘sell’ you on Ukraine. It is to educate you on the country and the options that it presents foreign investors, and for you to then make an informed decision.
So, we’re not going to highlight only the bad sides of Ukraine here. Quite the opposite.
Ukraine’s history is marred by tragedy: the great famine of 1932 caused by the Soviets killed upwards of 10 million Ukrainians, after that, the country was then run down by both Hitler and then the Soviets once more.
It’s ‘independent government’ has also done the country no favors, and cronyism is widespread in Ukraine. It’s Corruption Perception index places it 120th in the world.
To add insult to injury, the country has been invaded by Russia, and the peninsula of Crimea was annexed in 2014.
After all the tumult, it’s actually quite surprising that the country has launched its residence by investment program and is successfully receiving investment dollars, pounds, and euros.
Even though it’s still very much dependent on financial assistance from various international bodies, Ukraine is making solid steps towards democracy and independence.
As shown by the Orange Revolution of 2004 and the subsequent democratic protests, the population of the country is more than ready for change.
Ukraine is one of the world’s top grain exporters, but more importantly, the people are incredibly tech-savvy. The so-called Ukraine Renaissance is taking place in tech hubs like the capital of Kiev as well as Kharkiv. Talented development, coding, and server workers can be hired for as little as a couple of hundred euros per month.
So, if you want to run a new business or relocate an existing one, Ukraine’s residence could be a very interesting proposition indeed.
What’s really great is that Ukraine is barely on anyone’s radar – and that’s great news for you.
And although we think that the best time to step into Ukraine was some five years ago, there are still plenty of good deals to be had, especially when it comes to real estate.
Finally, Ukraine’s currency – the hryvnia – is at a low point against the US dollar right now, which really sweetens the pot when it comes to investing in the country.
Residence by Investment in Ukraine
In the world of investment immigration, residence is one of the most desirable options for high-net-worth individuals who want to invest abroad.
In exchange for a sum of money invested in assets with varying levels of risk, the investor then gets a chance to reside permanently and indefinitely in a part of the world that he/she deems attractive.
The trick, then, is to find out whether Ukraine has that ‘special sauce’ that would make this country interesting, as well as financially and personally valuable for you to plant a flag in.
Before we get into much more detail about Ukraine’s residence program, here’s who we think it works the best for:
• People who are looking to obtain citizenship with minimal physical presence
• People looking to run a business with the help of local, high-skilled, and low-cost talent
If you fall under one of these categories, then Ukraine could be the right residence program for you.
Before you apply, however, check if you would be eligible. Here is Ukraine’s potpourri of residence by investment requirements – nothing that you haven’t seen before:
• Be at least 18 years of age.
• Be of impeccable personal standing: no criminal record, infectious diseases, or substance addictions.
• Be able to invest at least $100,000 and establish a Ukrainian business.
Seems simple enough, right? Those are pretty inclusive eligibility rules.
But let’s explore the investment part a bit further.
On the surface, there aren’t any investment options in Ukraine. You must open up a new company and put a minimum of $100,000 into it.
However, here’s what usually happens. Investors perform the required ‘circus act’ and then go on to purchase real estate with some or all of that money.
The real estate will be registered in the name of the company, but you would still have complete freedom as to what you would want to do with it, including using it yourself or renting it out short or long-term.
Circumventing the lack of options, the investment in Ukraine is quite risk-free actually, provided you can trust the bank where the money is held.
You can also buy other financial assets via your company, such as government bonds (which have record yields).
The Application Process
So, are you a foreigner who would like to live in Ukraine and who is prepared to pay at least $100,000 for the honor?
The entire process of applying for residence by investment in Ukraine isn’t that quick or easy. It also involves at least two trips to Ukraine.
We estimate that it takes an investor approximately $20,000 in fees (both advisor and bank fees) to make the investment and apply for the Ukrainian residence permit, not including the cost of traveling to the country.
You shouldn’t forget about the running costs of a business either, from accounting to the salary of the director (subject to income and social tax) and the costs of potential employees.
But let’s get back to your application: you’ll be busy with paperwork for approximately four months before you’re able to legally move to Ukraine for good. Additional time will be needed to apply for residence permits for your family members, if applicable.
And don’t forget that it must all be done in Ukrainian, which is why we always recommend that our readers engage with a local lawyer or an investment immigration specialist. Give us a call – we can help connect you to the right people.
Just so you know what you would be in for, here’s how the application process works:
1. Arrive in Ukraine and stay for approximately 10 business days.
2. Apply for a taxpayer ID (this does NOT make you a tax resident). You will also go through your medical check to obtain all of the necessary certificates (for instance, to prove that you’re clear of drugs, AIDS, and such).
3. If you’re interested in purchasing real estate after your Ukrainian company has been fully set up, you could tour some properties.
4. You can either issue a Power of Attorney to someone local or open a private investment bank account yourself. Then, you must put in no less than $100,000 in share capital. Send the funds in a foreign convertible currency (e.g., USD, GBP, or EUR) from your account abroad to the Ukrainian bank account. With this money, you can do whatever you would like, including (but not limited to) purchasing real estate that will be owned by your business.
5. Next, you will need to register a company in Ukraine – either by yourself or by giving someone else Power of Attorney. We normally recommend that our clients open a limited liability company (LLC); you will be considered the founder of the company. This company will be able to perform any type of business activities that aren’t illegal in Ukraine. And if you’re not interested in actually doing business in Ukraine, you can liquidate the company after you receive your permanent residence permit.
6. Open a business bank account once your business is established and transfer the money from your investment account to the LLC’s account.
7. Obtain a certificate from your Ukrainian bank, confirming the inflow of your foreign investment into the Ukrainian economy. You can leave Ukraine now if you’d like.
8. Have you decided to stay in Ukraine? Visit the State Migration Service to fill out an application for your immigration permit. If abroad, visit your nearest Ukrainian Consulate and do the same (though we do have to warn you, this doesn’t function as well as applying in Ukraine). Here are the documents you will need to apply for your immigration permit, all translated into Ukrainian and certified as genuine.
• Your passport and its notarized Ukrainian translation
• 3 passport photographs
• A certificate from your Ukrainian business bank account that confirms the investment has been made
• A document that proves your residence address (e.g. local utility bill)
• Your clear criminal record, certified with an apostille
• Your marriage certificate and the birth certificates of your child(ren), if applicable
• Medical certificates proving your good health and lack of addictions and infectious diseases
9. The immigration permit is usually processed in 3-6 months, but can take up to one year to process too. If you would like to travel to Ukraine sooner than that, you will need to apply for a Visa-D type at your nearest Consulate. It will be issued in 10 days and be valid for 1 year. If you’re already in Ukraine when your immigration permit is issued, you won’t need a Visa-D.
10. Return to Ukraine and visit your nearest State Migration Service to apply for and receive your permanent residence. If you arrived in Ukraine on a D-type visa, you’ll need to apply for your permanent residence permit within five working days, and it will be issued within 15 working days. Permanent residents are able to easily travel to the Schengen countries visa-free.
11. Apply for an ID document (i.e. a permanent resident card). After your ID is issued, your family can apply for their respective permanent residences.
12. You may liquidate your company after you receive your permanent residence, which usually takes a couple of months. All of the financial property, including real estate, will then become the property of the single shareholder of the company. If you liquidate, you must pay profit tax and income tax as a person.
13. You may apply for a Ukrainian passport after you’ve been in possession of a permanent residence for five years.
And where does your family come into play in this whole process?
Well, only after you’ve jumped through all of the hoops of Ukrainian residence by investment will your spouse and children be able to apply for their residence permit.
This, of course, isn’t ideal if you would like to actually live in the country. But if you don’t, then it won’t be a huge nuisance.
Your spouse (you must have been together for at least three years) and unmarried children under the age of 18 are eligible for their own permanent residence permits once you are granted your resident status.
Your Ukrainian Citizenship
It’s no secret that many people who go for the various residence by investment programs do so because they want to get citizenship in the country.
Sometimes, when a country has both programs – one for residence and one for citizenship – the minimum required investment is simply too high for some to be attainable.
Other times, a country might only have a residence permit that will eventually lead to citizenship. And Ukraine is exactly like this.
You won’t technically be able to buy citizenship; you will need to become a Ukrainian citizen by naturalization. This means you would only be eligible to apply once you’ve held your permanent residence permit for a minimum of five years.
It’s a process that’s quite involved, and you will need to pass various tests, including a Constitution test and a language knowledge test.
After you go through all that effort, here’s the saddest part: Ukraine doesn’t offer dual citizenship. What this means is that you would need to renounce your first (original) citizenship within two years of your registration as a citizen of Ukraine.
That’s not really great, due to the many implications such a move would have for you personally and financially.
It’s also not something we would recommend doing without first consulting a reputable immigration investment advisor. We can help.
The Pros and Cons of Ukrainian Residency
On the surface, Ukraine’s residence by investment program seems to have more negative sides than positive.
Sure, it’s a country that’s quite livable and the minimum investment required is quite low – in the grand scheme of things.
However, in addition to the pros, there is a considerable number of pitfalls too.
But first, here are the highlights of Ukrainian residence:
No residence requirement. Even though you have a residence permit in Ukraine, you’re not required to live there. Actually, very little time ‘on the ground’ is required by the Ukrainian government.
Simplified EU travel. Ukrainian citizens and permanent residents are able to travel visa-free to all Schengen states. You can travel for a period of no longer than 90 days in any 180 day period if you have a biometric passport and if your intention of travel is tourism.
A decent passport. Within just five years of permanent residence, you’ll be able to apply for a Ukrainian passport. It ranks as the 43rd most powerful passport in the world but is also one of the world’s six biggest-climbers over the last decade. In addition to all of Schengen, Ukrainian citizens can travel visa-free to Bulgaria, Romania, Cyprus, and Croatia.
High-quality and low-cost workforce. If you’re interested in lowering the costs of operating your business by moving it to Ukraine, you can easily achieve that, thanks to affordable labor. Plus, the population of Ukraine is highly educated and there are multiple tech centers in the country, including Kiev and Kharkiv.
Progressive culture. Pro-European parties have a majority in the Ukrainian parliament and the overall culture of Ukraine is quite progressive. People regularly protest and are actively trying to rid the country of corruption and despotism.
Ukraine’s turn towards the West. The country is eager to turn westwards and fight the corruption that it’s facing. The country is undergoing so many reforms, usually done very rapidly, at the request of both the European Union and the International Monetary Fund, which makes us confident it will continue to achieve higher levels of democracy and economic stability.
Cheap living. Ukraine is one of the cheapest places to live in Europe. You can have a really high standard of living if your income is made abroad. You can hire a personal assistant and domestic help all for very low prices.
No taxation on worldwide income. If you’re not a tax resident in the country, you won’t have to pay tax on your worldwide income, thus giving you the best of both worlds. Reap the benefits of your Ukrainain residence while taking advantage of more favorable tax rates (to you) elsewhere in the world.
And then there are the cons
Lack of investment options. You might be an investor who is keen to lower your investment risk by purchasing real estate or even government bonds. Unfortunately, you can only invest in a business when it comes to Ukraine’s residence program.
No dual citizenship. If you would like to eventually become a Ukrainian citizen, or if you think you’re eligible to apply under citizenship by descent right away, you won’t be able to hold two citizenships at once and will need to renounce your original one.
Unfavorable banking environment. If you can help it, you shouldn’t bank in Ukraine. Its banks are known for corruption, no investment protection, and even overnight insolvency. There are much better places to bank in the world.
The country is still at war. Ukraine’s armed conflict with Russia is on-going. Although the hot zones of Donetsk and Luhansk are quite far away from the main economic hubs, it can still be unnerving to know that the country is engaged in war. Plus, Russia’s president Putin seems determined to hinder Ukraine’s move towards the European Union.
Lots of uncertainty.
Currency instability, political corruption, and overall uncertainty are also a few of the considerations one should have before making a move to Ukraine. These things are all long-term, so they won’t disappear in the short-term. For example, Ukraine’s large-scale corruption will take decades to uproot.
Ukraine Residence by Investment – FAQs
No matter how comprehensive our article is, some of you might still have questions or might simply want to digest the quick-facts about Ukraine’s residence.
Here are some of the most frequently asked questions about the program.
Is there an alternative way to obtain Ukrainian residence other than by investment?
Yes, there is a way to obtain the legal right to reside in Ukraine by applying for its citizenship by descent. If you have Ukrainian relatives, you could be eligible. Read more about Ukrainian citizenship by descent here.
Can I buy an apartment and get residence in Ukraine?
No, purchasing real estate doesn’t make you eligible to apply for Ukraine’s residence by investment. You can, however, purchase real estate via your newly established Ukrainian company and use it however you would like (i.e. either rent it out or live in it yourself). The real estate will be considered the property of the business.
How long does it take to apply for residence in Ukraine via investment?
It will take at least 6 months to apply for and receive your residence permit in Ukraine. The process can be delayed if there are discrepancies or mistakes in your application.
How can I make the investment?
Interestingly, there are two ways you can make your $100,000 investment. First, you can pay it in cash at a bank via a cashier; this can be any bank in Ukraine. Second, you can make a bank transfer from an account in your name to the bank account of your newfound business in Ukraine.
Once the investment is made, can I use the money for my business needs?
Yes, the cash that you put into your business bank account doesn’t get blocked off in any way. You will be free to use it as you see needed, including to buy real estate.
What sort of tax will my Ukrainian company need to pay?
Like every other company in Ukraine, your business will be liable to pay profit tax and real estate tax if your company owns real estate that’s larger than 60 square meters. Plus, as a director of the company, you will be liable to pay income tax and social security taxes on your salary.
How long does it take to open and establish an LLC in Ukraine?
It will take just one day to register your new business in Ukraine. It’s a straightforward and speedy process. However, there are multiple steps you must take before opening an LLC, such as obtaining a tax number (which takes three working days).
Is anyone excluded from applying for residence by investment in Ukraine?
Yes. People who were convicted and sentenced for a serious crime cannot apply. Also, people who’ve committed crimes against peace or against humanity cannot apply. And when it comes to health, if you’re affected by chronic alcoholism, toxic substance or drug abuse, or have any infectious disease (e.g. AIDS), you won’t be eligible to apply.
So, Is Ukraine Worth Your While?
There are no two ways about this: Ukraine isn’t a great place to bank or do business. It’s also not terribly attractive for living if you’re used to western standards, and the government does itself no favors by prohibiting dual citizenship.
However, if you examine today’s environment in Ukraine – especially Kiev and Kharkiv – it will become clear to you that they are filled with well-educated and truly smart people ready to forge ahead and make something of themselves.
The big cities – where the standard of living is comparable to many other European cities – maintain an environment that promotes the arts, music, and culture in general. In them, great minds flourish.
We have no doubt that Ukraine will continue to grow and develop and finally rid itself of the Soviet mindset that beset it for decades.
It’s already implemented numerous reforms aiming to improve its bureaucratic apparatus, eased the tax pressure on both individuals and companies, and has climbed upwards in terms of its economic attractiveness and foreign investment.
We would even dare to say that Ukraine is one of those countries that are infamously known for their past events (e.g. Chernobyl or Crimea annexation), but that get overlooked by high-net-worth individuals chasing that Nomad Capitalist lifestyle.
Optimism is the word we would use when talking about Ukraine and its future opportunities.
Optimism and curiosity: what sort of innovation and developments will the country undergo thanks to its new president who took office in 2019?
Now is the absolute right time to invest in the country, but only for the right type of person. Not sure you are one? Get in touch with the Nomad Capitalist team and let’s talk about whether Ukraine is a good place for you to plant one or maybe even a few of your flags.