The legal regime of Diia.City has interested many IT companies and specialists in this field. If you do decide to transform and meet all the requirements of the Law of Ukraine “On Stimulating the Development of the Digital Economy in Ukraine”, the next step is to apply for the status of a Diia.City resident.

 

Steps to Diia City

 

Step 1: Applying to the Ministry of Digital Transformation

 

The application must contain identifying information about the applicant (full name, identification code in the Unified State Register, e-mail address, and telephone number to contact the applicant), the officer of the applicant (for example, the head), and the chief accountant, who carries out the accounting of the applicant.

In addition, it is necessary to specify the types of activities that the resident will engage in. Remember that they must comply with the relevant Law. And also, give your assurances that you are not subject to negative circumstances provided by the Law (for example, non-profit organizations, bankrupt companies, legal entities in the state of termination (except for transformation), companies under sanctions, and others cannot obtain the status of a resident).

The application includes information about joining Diia.City through the so-called “transition” period. Let us remind you that if a legal entity does not meet all the requirements, it can still acquire the status of a resident for a limited period of time (no more than 2 years) and under certain conditions:

  • Firstly, during the so-called “transition period,” the norms on the number of employees and their salaries do not apply.
  • Secondly, the “age” of a company registered in Ukraine must not exceed two years, and its annual income must not exceed 1167 minimum wages (as of 2022 — 7585500 UAH).

Implementation of this step can be done electronically.

 

Step 2: Processing the application for Diia.City resident status.

 

The Ministry of Digital Transformation reviews the application within 10 days, as a result of which it can make the following decisions:

  • Return the application without consideration (for example, if it does not meet the above requirements and does not contain all necessary information).

In this case, within 5 days, the applicant should receive a returned application with justifications and suggestions for correcting the deficiencies. And, accordingly, after their correction, send the application again.

  • Deny the applicant to acquire the status of a resident of Diia.City.

In this case, the Ministry of Digital Transformation sends the decision to the applicant the day after the decision is made, indicating the reasons for refusal and proposals to eliminate the identified deficiencies.

  • Make a decision on acquiring the status of Diia.City resident by the applicant.

In this case, on the 11th working day from the date of application to the Ministry of Digital Transformation, your company and the positive decision on it will be entered in the Diia.City Registry. If you made a choice at the time of application, it is also possible to enter information about the applicant’s election to be taxed as a resident of Diia.City (9% Withdrawal Tax).

If not, a company listed in the Diia.City registry, which is a taxpayer on a general basis, can decide to switch to tax as a resident of Diia.City (9% tax on withdrawn capital). The procedure is very simple: apply to the supervisory authority no later than 15 days before the beginning of the following calendar quarter. If such an application has not been filed, it is summarized that the resident has opted for 18% corporate tax.

 

And here’s where the question arises: how do you account for all of this and not miss anything? That’s the question we’re here to help you with!

Why should you turn to Finevolution? With us, you’ll get:

  • high-quality tax and legal advice
  • assistance in preparing all necessary documents
  • accounting support for your sole proprietorship
  • assistance in filing an application to the Diia.City

About Finevolution

Our company has been providing financial and legal support for IT companies in Ukraine and abroad for more than 5 years. We have in-depth expertise in incorporating foreign companies and opening an FLP (sole proprietorship), and we are happy to help you understand the new possibilities of Diia.City.

Become a resident today! For advice, leave your application in the form or write to us on Telegram/Viber.

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