In brief
- Who is an entrepreneur: A natural person with full legal capacity who has undergone state registration (sole trader), or a legal entity engaged in entrepreneurial activity (basis — Article 50 of the Civil Code of Ukraine).
- Commercial Code: Ceased to have effect on 28 August 2025. Its definition of entrepreneurship now has only historical significance.
- Liability: An individual entrepreneur is liable for the debts of the business with all their assets (Article 52 of the Civil Code of Ukraine).
- Income limits for 2026: Group 1: 1,444,049 UAH; Group 2: 7,211,598 UAH; Group 3: 10,091,049 UAH per year.
- In this article: a comparative table (entrepreneur / sole trader / self-employed person / businessman), rates of the single tax, military levy and unified social contribution for 2026, as well as a checklist before registration.
Who is an entrepreneur under current law
An entrepreneur is a person who carries out business activities not prohibited by law and is registered in accordance with the procedure established by the state.
For a natural person, the legal basis is Article 50 of the Civil Code of Ukraine No. 435-IV:
‘A natural person with full legal capacity has the right to carry out business activities not prohibited by law.’
The right to engage in such activities is realised only after state registration. A registered person acquires the status of an individual entrepreneur (FOP). Entrepreneurial activity may also be carried out by a legal entity — a company established for this purpose.
In simple terms: an entrepreneur independently organises their own business, seeks out clients and pays taxes. They do not have an employer who pays their salary and makes social security contributions on their behalf.
Entrepreneur, sole trader, self-employed person and businessman: what is the difference?
These terms are often used interchangeably, but from a legal perspective they differ.
| Definition | What it is | Legal basis |
|---|---|---|
| Entrepreneur | A natural or legal person engaged in entrepreneurial activity following registration | Article 50 of the Civil Code of Ukraine |
| FOP (individual entrepreneur) | A person registered as an entrepreneur without the status of a legal entity | Articles 50–52 of the Civil Code of Ukraine |
| Self-employed person | An FOP or a person engaged in independent professional activity who is not an employee within the scope of that activity | Sub-paragraph 14.1.226 of the Tax Code |
| Businessperson | Not a legal term, but a description of the role of a businessperson | Not defined in legislation |
In colloquial speech, the terms ‘private entrepreneur’ and ‘FOP’ mean the same thing — a person registered as an entrepreneur. The official legal term is natural person — entrepreneur.
A publication by the Cherkasy Regional Employment Centre states:
‘An entrepreneur is an organisational and legal form for conducting commercial activities, whilst a businessman is a profession for businesspeople’.
In terms of scope, the concept of ‘businessman’ is a broader category that also encompasses entrepreneurs. In other words, it is official registration that makes a person an entrepreneur, whilst it is the nature of their occupation and actual activities that make them a businessman.
The concept of self-employed person under the Tax Code of Ukraine No. 2755-VI is broader than that of an individual entrepreneur: it also includes persons who carry out independent professional activities (for example, solicitors, notaries, auditors) and are not registered as sole traders.
The Commercial Code has been repealed: what this changes
Most reference sources (in particular Wikipedia) previously defined entrepreneurship in accordance with Article 42 of the Commercial Code of Ukraine No. 436-IV of 16 January 2003.
This Code ceased to be in force on 28 August 2025 pursuant to Law No. 4196-IX of 9 January 2025 (as recorded in the act’s details on the portal zakon.rada.gov.ua).
Under the previous provision (Article 42 of the Commercial Code):
‘Entrepreneurship is an independent, proactive, systematic economic activity undertaken at one’s own risk by business entities (entrepreneurs) with the aim of achieving economic and social results and generating profit’.
After 28 August 2025, this definition should not be referred to in contracts, applications or official documents.
The current legal framework governing the status of an entrepreneur is Articles 34, 35, 50–52 of the Civil Code of Ukraine and the Tax Code of Ukraine.
The Verkhovna Rada’s ‘Legislative Terminology’ portal still contains an outdated definition from Article 128 of the Commercial Code. If you see a reference to the Commercial Code in reference guides or contract templates, check whether there is a current provision in the Civil Code or the Tax Code of Ukraine that replaces it.
Who can become an entrepreneur
Any person with full legal capacity may register as an entrepreneur. According to Article 34 of the Civil Code of Ukraine, this capacity is acquired from the age of 18.
From the age of 16, full legal capacity may be granted early — specifically for the purpose of carrying out entrepreneurial activities (Article 35 of the Civil Code of Ukraine):
‘Full legal capacity may be granted to a natural person who has reached the age of sixteen and who wishes to engage in entrepreneurial activity’.
The decision to grant legal capacity is taken by the guardianship and custody authority with the written consent of the parents (adoptive parents) or guardian, and in the absence of such consent — by the court.
Foreign nationals and stateless persons lawfully residing in Ukraine are also entitled to register as sole traders.
Registration: how much it costs and how long it takes
Administrative fee: None. State registration of an individual entrepreneur is free of charge (Article 36 of Law No. 755-IV ‘On the State Registration of Legal Entities, Individual Entrepreneurs and Public Organisations’).
Processing times: Documents are processed within 24 hours of receipt, excluding weekends and public holidays (Article 27 of Law No. 755-IV). The comprehensive ‘e-Entrepreneur’ service in the app and on the ‘Diya’ portal allows you to complete registration within one day.
If you have started operating without registration
The law precludes any attempts to evade liability for actions taken without registration.
According to Article 50 of the Civil Code of Ukraine:
‘If a person has commenced business activities without state registration, having concluded the relevant contracts, they shall not have the right to contest these contracts on the grounds that they are not an entrepreneur’.
All obligations arising from the concluded transactions remain valid and are enforceable.
What risks does a sole trader face: liability with all their assets
The main risk for a sole trader is that the law does not distinguish between assets used in the business and the individual’s personal assets.
According to Article 52 of the Civil Code of Ukraine:
‘An individual entrepreneur is liable for obligations arising from entrepreneurial activity with all their assets, except for assets which, by law, cannot be subject to enforcement proceedings’.
If the sole trader is married, enforcement proceedings to recover debts arising from business obligations may also be directed against their share in the spouses’ joint property. This is the main difference from salaried employment, where an employee is not liable with their own savings or property for the employer’s obligations.
Before entering into major contracts, taking out loans or signing long-term lease agreements, assess the potential risks to your personal assets.
Types of entrepreneurs by taxation system
There is no statutory list of ‘types of entrepreneurial activity’ (the Commercial Code, which contained the relevant references, is no longer in force). In practice, sole traders are classified according to the taxation system — it is this system that determines the permitted types of activity, the maximum income threshold and the maximum number of employees.
An individual entrepreneur may choose between the general or simplified taxation system. The simplified system is divided into four groups (clause 291.4 of the Tax Code of Ukraine).
Income limits are calculated based on the minimum wage set as at 1 January of the tax year (in 2026 — 8,647 UAH in accordance with Article 8 of Law No. 4695-IX ‘On the State Budget of Ukraine for 2026’).
| Group | Who it applies to | Employees | Income limit (minimum wage) | Limit in 2026 |
|---|---|---|---|---|
| Group 1 | Retail sale of goods from market stalls, provision of household services to the public. | without employed staff | 167 minimum wages | 1,444,049 UAH |
| Group 2 | Provision of services (including consumer services), manufacture and sale of goods, catering. | up to 10 people | 834 minimum monthly wage | 7,211,598 UAH |
| Group 3 | Any permitted types of activity. | No restrictions | 1,167 minimum monthly wage | 10,091,049 UAH |
| Group 4 | Agricultural producers | in accordance with the law | calculated separately | based on land area |
The income limit is the maximum amount of revenue for a calendar year; exceeding this limit requires a switch to another group or the general taxation system.
What tax will an entrepreneur pay in 2026
Under the simplified taxation system, a sole trader pays three main contributions: the single tax, the military levy and the single social contribution (SSC).
Single tax
| Group | Rate | Basis |
|---|---|---|
| Group 1 | up to 10 per cent of the monthly subsistence minimum | sub-paragraph 293.2 of the Tax Code of Ukraine |
| Group 2 | up to 20 per cent of the minimum wage per month; maximum in 2026 — 1,729.40 UAH | sub-paragraph 293.2 of the Tax Code of Ukraine |
| Group 3 | 3 per cent of income including VAT or 5 per cent of income excluding VAT | clause 293.3 of the Tax Code of Ukraine |
Fixed single tax rates for Groups 1 and 2 are set by village, settlement and town councils. The exact rate in your region should be checked in the local council’s resolution.
The minimum subsistence level for able-bodied persons from 1 January 2026 is 3,328 UAH (Article 7 of Law No. 4695-IX).
Military levy
Individual entrepreneurs in groups 1, 2 and 4: pay a fixed levy amounting to 10 per cent of the minimum wage per month — in 2026, this amounts to 864.70 UAH.
Sole traders in Group 3 (excluding e-residents): pay 1 per cent of their income.
(Basis: para. 16-1, sub-section 10, section XX of the Tax Code of Ukraine).
Unified Social Contribution
The USC rate is 22% (Article 8 of Law of Ukraine No. 2464-VI).
Minimum monthly contribution: Minimum monthly wage × 22 per cent = 8,647 UAH × 0.22 = 1,902.34 UAH/month.
How much does an entrepreneur earn?
There are no official state statistics on the average income of sole traders. Any generalised figures regarding ‘average earnings of sole traders’ are merely estimates.
However, it is possible to clearly calculate the mandatory tax burden:
A Group 2 sole trader in 2026 must pay the following each month:
Single tax — up to 1,729.40 UAH
Military levy — 864.70 UAH
Social Security Contribution (ESV) — 1,902.34 UAH
Total fixed payments: up to 4,496.44 UAH per month.
A Group 3 sole trader pays the Unified Social Contribution (USC) as a fixed amount (from 1,902.34 UAH), whilst the single tax (5 per cent) and military levy (1 per cent) are calculated in direct proportion to their actual income.
To compare the benefits of being a sole trader with those of being an employee, subtract mandatory payments and business operating costs from your expected monthly income, then compare the resulting net figure with the average salary for the relevant profession.
Self-employed or employed: job vacancies on Injobe
The term ‘entrepreneur’ refers to a legal status rather than a specific job role, which is why there is no separate section for sole traders on the Injobe platform. If you are choosing between starting your own business and taking up employment, compare your calculations with current job offers from employers:
- Job vacancies in the ‘Services for the public and business’ section — an area where many people start their own businesses.
- All Injobe vacancies — with filters for salary and remote work.
A checklist before becoming an entrepreneur
You are 18 years of age (or you are 16 years of age and have attained full legal capacity in accordance with Articles 34 and 35 of the Civil Code of Ukraine).
The chosen type of business activity is not prohibited by current Ukrainian legislation.
You have chosen the most suitable taxation system and tax bracket, having checked that your expected annual income falls within the 2026 limits.
You have found out the exact single tax rate for your local authority (for Group 1 or 2).
You have included the planned expenditure on the military levy and the Unified Social Contribution (from 2,767.04 UAH/month for groups 1–2 or from 1,902.34 UAH/month for group 3) in your monthly budget.
You are aware that a sole trader is liable for business debts with all their personal assets (Article 52 of the Civil Code of Ukraine).
You base your activities on the Civil Code and the Tax Code, as the Commercial Code of Ukraine ceased to be in force on 28 August 2025.
