Registration of IT companies

When a businessperson or an IT specialist considers incorporating (registering) an IT company, several questions arise:

  1. What is an IT company and in what way does it differ significantly from an “ordinary” company?
  2. Which jurisdiction is it best to register an IT company?
  3. What taxation system is applied to an IT company?
  4. What is the best proceed – on your own or with lawyers’ assistance?

An IT company by its legal nature is no different from an “ordinary” company, therefore, the procedure for its registration is standard for chosen legal entity form (limited liability company, stock company, additional liability company or their analogs in other countries). The primary difference between an IT company and any other is the purpose of its activity – making a profit from the IT business, that is, a business in the field of information technologies – creating, managing and processing of various data, using a computer or other computer technology.

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Incorporation of an IT company is not just technical registration and obtaining a company number, it is something more

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    At the same time, it should be clear that incorporation of an IT company is not a technical registration and obtaining a company number, it is something more. Even at the initial stage, it is necessary to understand exactly in what legal form and jurisdiction it is most profitable to establish a company and which taxation system are best to apply.

    In light of the latest global trends in deoffshorization, bygone are standard solutions to incorporate in low tax jurisdictions, because of the fact that it can, at least, create additional problems with opening bank accounts, settlements, and conducting business activities. Unfortunately, not all take notice of the latest changes in the legal regulation of the EU, theUSA, and Ukraine, and not everyone is aware of the possible negative consequences of company’s incorporation in a “incorrect” jurisdiction for the company and business in general.

    Without an accurate answer to such questions, it is very easy to make a mistake choosing a jurisdiction, create a company, and ultimately face the daily hindrances of doing business. That’s why we endorse to contact specialists, and not to engage in impromptu.

    VigoLex team specializes not only in IT law but also in the intricacies of tax legislation of Ukraine and other countries, so it may, with consideration of the particularities and needs of the Client, help to select the most profitable jurisdiction for incorporating of an IT company, correctly draw up and submit documents, as well as start business processes as quickly as possible.

    When discussing incorporation of an IT company in Ukraine, most often those are legally registered in Kyiv, Kharkov, Lviv, Dnipro, or Odesa, since in these are the cities where a large number of IT specialists are concentrated. And their number, as well as the number of such companies are constantly growing. So, by the end of 2019, the total number of IT companies in Ukraine was over 1600.

    Below are approximate VigoLex tariffs[1] for the most common services associated with the IT company registration in Ukraine.

    The cost of registering an IT company in other jurisdictions is determined depending on the particular jurisdiction and the specific wishes of the Client.

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