How to open a company abroad: a to-do list for business owners

Start with the objective: why do you need a company?

The most common mistake we see clients make is choosing a jurisdiction based primarily on its corporate tax rate. Tax matters, but it is only one of dozens of factors. The right starting point is to clearly define the purpose your new legal entity is expected to serve.

Four common scenarios

Raising investment.
If your goal is to secure venture capital or access international capital markets, the key considerations include the ability to issue different classes of shares (common and preferred), a transparent corporate structure familiar to investors, and a jurisdiction with a well-established venture capital ecosystem. It is equally important to determine in advance which intellectual property (IP) rights will be owned by the new company, as this directly affects its valuation during fundraising.

Operating with international clients.
If your company invoices clients in the EU or the United States and receives payments from them, several factors become critical: the ability to open a corporate bank account with a reputable financial institution, avoiding jurisdictions included on FATF or EU blacklists, and having access to Double Taxation Agreements (DTAs) with key business partners’ countries.

Trading business and logistics.
For companies dealing with physical goods, having a presence in the country where products are imported or sold may be more important than tax advantages. Customs regulations, warehousing costs, access to transport hubs, and VAT registration requirements often become the deciding factors.

Structuring business for a non-resident founder.
If the founder has relocated or plans to move to another country, incorporating the business in that jurisdiction may be the most practical solution. However, it is essential to understand that the founder’s tax residency and the company’s tax residency are separate legal concepts with different tax consequences.

Questions to ask before choosing a jurisdiction

The answers to these questions will narrow the list of potential jurisdictions from virtually unlimited options to three to five realistic candidates.

• Where are your customers, contractors, and business partners physically located?
• What business activities will the company carry out, and do they require licensing in a particular jurisdiction?
• What will be the total annual cost of maintaining the company, including accounting, legal support, office expenses, annual government fees, and licensing?
• Do you plan to raise investment within the next two to three years? If so, where are your potential investors based?
• Where will you personally live, and where will you become a tax resident?
• What is the company’s intellectual property (IP) structure? Where are the trademarks and patents registered, and who owns the software code? These factors may influence both the choice of jurisdiction and even the company’s name.
• What is the long-term purpose of the company over the next three to five years—scaling, attracting investment, an acquisition, or an IPO?
• Does your business have the potential to become part of a holding structure?

Choosing a jurisdiction: what to compare and what not to be misled by

Key factors to consider

We intentionally do not provide a ranking of the “best countries,” because the right jurisdiction always depends on the specific needs of your business. Instead, you should evaluate a combination of factors to make a well-informed decision. Substance requirements deserve special attention, as they directly affect eligibility for tax benefits and preferential regimes.

What “best jurisdiction” rankings don’t tell you

Articles with headlines such as “Top 5 countries to register an IT company” often reflect information that is three to five years out of date or simply promote the services of particular incorporation agents. In reality, the legal and tax landscape changes rapidly. Updates to EU and FATF lists, new Double Taxation Agreements (DTAs), amendments to local legislation, and the introduction of substance requirements can significantly alter a jurisdiction’s attractiveness within just one or two years.

The answer to the question “Where should I incorporate my company?” is always business-specific and should be based on a current legal and tax assessment rather than a generic online ranking.

Registration process: remote or in person?

Remote registration

Most modern jurisdictions allow founders to incorporate a company without being physically present. There are two primary approaches.

Option A: Digital identification

Some jurisdictions, such as Estonia through its e-Residency program, allow non-residents to obtain a digital identity and complete the incorporation process entirely online. However, this remains the exception rather than the rule. Most jurisdictions do not offer a comparable system, and a digital signature issued in one country is generally not recognized by the registration authorities of another.

Option B: Power of attorney

The founder signs a notarized power of attorney authorizing a local lawyer or incorporation agent to complete the registration process. This is the most common method of remote incorporation.

If both Ukraine and the country of incorporation are parties to the 1961 Hague Apostille Convention, a simple apostille issued by the Ministry of Justice of Ukraine is sufficient. If the destination country is not a party to the Convention, full consular legalization is required, making the process significantly longer and more expensive.

For example, when incorporating a company in Poland—which is a member of the Hague Apostille Convention—a notarized power of attorney with an apostille is sufficient. No separate consular legalization is required, making the process faster and more cost-effective. The same approach applies to most EU countries.

Practical consideration

Each new corporate action—such as appointing a new director, amending the articles of association, or opening a branch office—may require a separate power of attorney. This should be taken into account when planning both operating costs and the founder’s administrative workload.

Registration in person

If the founder is already in, or can easily travel to, the country of incorporation, signing the documents in person before a lawyer or notary may be the quickest and simplest option. In this case, no notarized power of attorney or apostille is required—only a valid passport and the prepared incorporation documents.

Some jurisdictions, or certain legal procedures, still require the founder’s personal presence. This commonly applies to opening a corporate bank account or notarizing the company’s constitutional documents. In such cases, all documentation—including the articles of association, list of directors, and incorporation resolutions—should be prepared and agreed upon before traveling. An unexpected second trip caused by a missing signature is often far more expensive than proper legal preparation.

The Hague Apostille Convention: apostille vs. legalization

Ukraine is a party to the 1961 Hague Apostille Convention. If the country where the company will be incorporated is also a member, Ukrainian notarized documents are recognized after receiving an apostille.

If the destination country is not a party to the Convention—as is the case with several jurisdictions in the Middle East and Asia—full legalization through the Ministry of Foreign Affairs of Ukraine and the destination country’s consulate is required. Depending on the jurisdiction, this process typically takes between two and eight weeks.

Preparing your documents: what you need before and after incorporation

Documents required for company registration

The incorporation package usually includes a relatively small set of documents: the articles of association or memorandum of association (depending on the legal form of the company), the incorporation application, and documents confirming the founder’s identity. The exact requirements vary by jurisdiction and should be confirmed with a local lawyer or incorporation agent.

In addition, it is advisable to prepare documents for corporate governance and banking purposes, including:

• Founders’ resolutions approving the incorporation of the company and appointing its director(s).
• Information about directors and ultimate beneficial owners (UBO declaration), which is mandatory for most banks and company registries.
• Identity documents for founders and directors, including a valid passport and proof of address issued within the last three months.
• In certain jurisdictions, evidence of the lawful source of the share capital.

If the company is being established as part of a holding structure, its constitutional documents should clearly reflect its intended function—whether it will own trademarks or software licenses, operate as the trading entity, or serve as a financial holding company distributing dividends. These decisions influence the company’s corporate documentation and may later affect transfer pricing documentation requirements.

Documents for doing business

Alongside the incorporation documents, we recommend preparing a core set of commercial legal documents.

Non-Disclosure Agreement (NDA)
An NDA should be signed with potential clients and business partners during negotiations, before any confidential information is shared. It protects technical solutions, business plans, and commercial terms.

Service Agreement / Master Service Agreement (MSA)
The primary commercial agreement with customers, tailored to the company’s jurisdiction. It establishes the scope of services, responsibilities of the parties, payment terms, liability, and dispute resolution procedures.

Privacy Policy and Terms of Use
These documents are essential for your website and digital products, particularly if your users are located in the European Union and your business is subject to the GDPR.

Employment agreements or contractor agreements
Correctly classifying individuals as employees or independent contractors is essential for avoiding allegations of disguised employment. In many jurisdictions, worker misclassification can result in significant financial penalties.

Internal corporate documentation
This typically includes shareholders’ meeting minutes, board resolutions, and the company’s shareholder register.

Registering a trademark

Trademark registration does more than protect your brand from competitors. For potential investors or buyers, the absence of a registered trademark is often considered a significant due diligence risk because it means one of the company’s key assets is not legally protected.

Where to register depends on your target markets:

• European Union: EUIPO (a single application covers all 27 EU Member States).
• United States: USPTO.
• Ukraine: Ukrainian National Office for Intellectual Property and Innovations (UKRNOIVI).
• Multiple jurisdictions: The WIPO Madrid System allows applicants to seek trademark protection in up to 130 countries through a single international application.

Important: Trademark registration typically takes between 6 and 18 months. The process should begin well before entering the market—not after your business has already launched.

Special and jurisdiction-specific requirements

Every jurisdiction has its own legal and regulatory nuances that may not be obvious at first glance. Below are some of the most common “surprises” our clients encounter when expanding internationally.

Licensing for seemingly ordinary business activities
In some jurisdictions, even software development or consulting services require a commercial license. Operating without the appropriate license may result in fines or difficulties opening a corporate bank account.

Mandatory local director
Certain countries require at least one director to be a resident of the jurisdiction. This increases ongoing costs and may introduce additional corporate governance risks.

Minimum local employment requirements
Some jurisdictions, particularly in the Middle East and Asia, impose localization requirements by requiring companies to employ a minimum number or percentage of local workers.

Prior approval of the company name
In some countries, the proposed company name must be approved before incorporation. If the name is rejected by the registrar, the entire registration process may be delayed.

Mandatory Data Protection Officer (DPO)
Companies that process large volumes of sensitive personal data may be legally required to appoint a Data Protection Officer (DPO) to oversee compliance with applicable data protection laws.

Substance requirements
An increasing number of jurisdictions apply economic substance tests. Without genuine business operations—including a physical office, local personnel, and management decisions being made within the jurisdiction—a company may lose access to preferential tax regimes or other benefits.

Visa-linked requirements
In certain UAE free zones, maintaining a company’s business license is linked to the founder’s residence visa. This may require regular visa renewals and periodic physical presence in the country to maintain compliance.

Opening a corporate bank account: the most challenging step

Why it is more difficult than company registration

In most jurisdictions, incorporating a company is a relatively predictable and standardized process. Opening a corporate bank account is not.

Banks apply their own internal compliance procedures, which are often much stricter than the minimum legal requirements. As a result, each financial institution has broad discretion when deciding whether to approve or reject an application.

For companies whose shareholders or directors are non-residents, opening a traditional corporate bank account may take anywhere from one to eighteen months, depending on the jurisdiction, the bank, the company’s operating history, and the quality of the supporting documentation. Even applicants with a complete set of documents may receive a rejection, which is a common part of the process.

What banks usually require (KYC package)

Before approaching a bank, it is advisable to prepare the standard documentation requested by most banks and payment institutions.

• A complete corporate document package, including the certificate of incorporation, articles of association, register or certificate of directors and shareholders, and a UBO declaration.
• Identity documents for all ultimate beneficial owners, including a valid passport and proof of address (such as a utility bill or bank statement issued within the last three months).
• A business plan or business description explaining the company’s activities, revenue model, and expected transaction volumes.
• Evidence of commercial relationships, such as signed customer contracts or Letters of Intent (LOIs), which significantly improve the likelihood of approval.
• Documentation confirming the lawful source of the company’s share capital or the founder’s funds.

A two-tier banking strategy

In practice, we recommend that clients take a two-stage approach to banking.

Level 1 – Payment institutions (operational launch)

Electronic Money Institutions (EMIs), such as Wise, Revolut Business, Payoneer, or Airwallex, provide a practical solution for launching business operations.

Their main advantages include a lower entry threshold, faster onboarding (typically ranging from several days to a few weeks), access to IBAN accounts and international payments, and the ability to start operating without traveling abroad.

However, EMIs are not traditional banks. They may impose transaction limits and generally do not provide lending facilities or certain types of trade finance.

Level 2 – Traditional banking

Once the company has established an operating history—typically after six to twelve months of transactions through a payment institution—has local counterparties, signed commercial agreements, and ideally a physical office, the chances of opening a corporate bank account with a traditional bank increase significantly.

A traditional bank generally offers higher transaction limits, access to credit products, and greater credibility when dealing with large customers and business partners.

For most businesses, the recommended strategy is to begin operations using a payment institution while simultaneously preparing the documentation required for a traditional bank account application.

Controlled Foreign Companies (CFCs): what every foreign company owner should know

What is a Controlled Foreign Company?

Since 2022, Ukraine has applied Controlled Foreign Company (CFC) rules under the Tax Code of Ukraine.

In general, if an individual or legal entity that is a tax resident of Ukraine controls a foreign company—either by directly or indirectly owning more than 50%, or more than 25% where two or more Ukrainian tax residents collectively own more than 50%—the foreign company’s undistributed profits may become taxable in Ukraine.

Key obligations of a CFC owner

• Notify the State Tax Service of Ukraine about the acquisition, disposal, or change in ownership of a foreign company within 60 calendar days of the relevant event.
• File a CFC report together with the annual personal income tax return (generally by 1 May) through the Electronic Taxpayer Cabinet using a qualified electronic signature (QES).
• Include the relevant portion of the CFC’s adjusted profits (proportionate to the ownership interest) in the Ukrainian tax resident’s taxable income, unless one of the statutory exemptions applies. The standard tax rate is 18% personal income tax, plus a 5% military levy. The tax is generally payable by 1 August.

When CFC profits may be exempt from taxation

Ukrainian law provides several important exemptions from CFC taxation.

• The company is incorporated in a country that has a Double Taxation Agreement (DTA) or a tax information exchange agreement with Ukraine, and the company’s effective corporate tax rate is at least 13%, with corporate income tax actually paid in that jurisdiction.
• The CFC’s total annual income does not exceed EUR 2 million.
• The company is publicly listed or is a subsidiary of a publicly listed company whose shares are traded on a recognized stock exchange.
• The CFC’s profits have actually been distributed to the controlling person and taxed in Ukraine as dividend income.

Penalties for non-compliance

Penalties for violating Ukraine’s CFC rules can be substantial. They are calculated based on the statutory subsistence minimum, which changes annually. The figures below are approximate amounts based on the 2025 thresholds.

• Failure to submit, or late submission of, a notification regarding the establishment, disposal, or change in ownership of a CFC may result in a fine of approximately UAH 800,000–900,000 for each violation.
• Failure to file a CFC report may result in a fine of approximately UAH 270,000, while repeated violations may lead to penalties of approximately UAH 2.7 million.
• Failure to assess or pay the applicable tax may result in the standard tax penalties for underpayment (typically 25–50% of the unpaid tax), together with late payment interest accrued for each day of delay.

Important: Ukraine’s CFC rules are relatively new and continue to evolve. The State Tax Service regularly issues additional guidance, while judicial and administrative practice is still developing. For this reason, obtaining professional legal and tax advice before establishing a foreign company should be regarded as an essential step rather than an optional one.

Summary: a checklist before opening a company abroad

Establishing a foreign company is a marathon, not a sprint. Mistakes made at the beginning are usually far more expensive to correct than to prevent. Use the checklist below to assess whether you are fully prepared before moving forward.

Strategic planning

• Clearly define the business purpose of the new company (investment, operations, holding structure, or trading business).
• Identify where your key stakeholders are physically located, including customers, business partners, and your team.
• Evaluate your business plans for the next three to five years, including expansion, fundraising, or a potential exit.
• Assess the founder’s personal tax position, including tax residency, CFC obligations, and personal income tax implications.
• Determine your intellectual property (IP) structure, including where trademarks and patents are registered and who owns the software code.

Choosing the jurisdiction

• Compare at least three jurisdictions based on corporate taxation, Double Taxation Agreements (DTAs), ongoing maintenance costs, and banking accessibility.
• Verify that the jurisdiction is not included on FATF, EU, or OECD blacklists or watchlists.
• Confirm the applicable substance requirements and director residency obligations.
• Check whether a legal assistance treaty exists between Ukraine and the chosen jurisdiction, as this may affect document legalization requirements.
• Obtain confirmation and legal advice from a qualified local lawyer or incorporation agent.

Registration and documentation

• Decide whether the company will be incorporated remotely or in person, and determine whether an apostille or legalization is required.
• Prepare the incorporation package, including the articles of association, founders’ resolutions, and directors’ documentation.
• Prepare the bank’s KYC package, including the UBO declaration, proof of address, and business description.
• Prepare essential commercial legal documents, including an NDA, Master Service Agreement (MSA), Privacy Policy, and Terms of Use.
• Decide on your trademark registration strategy (EUIPO, USPTO, or the WIPO Madrid System).

Corporate bank account

• Define your banking strategy by using a payment institution for the initial operational stage and applying for a traditional bank account once the company has established an operating history.
• Prepare a complete KYC package, including documentation confirming the lawful source of funds.
• Confirm whether opening the bank account requires the founder’s physical presence.

CFC compliance and Ukrainian taxation

• Consult a tax lawyer regarding your obligations under Ukraine’s Controlled Foreign Company (CFC) rules.
• Determine the deadlines and procedures for submitting the required notifications to the State Tax Service of Ukraine.
• Verify whether any statutory CFC tax exemptions apply to your situation.
• Prepare to file your annual personal income tax return, including the required CFC disclosures where applicable.