In Ukraine, a new draft law is actively being discussed, which provides for the possibility of conducting entrepreneurial activities by households without the mandatory registration of an individual entrepreneur (IE). The relevant document – draft law No. 8143 “On the Freedom of Entrepreneurial (Economic) Activity of Households” – is being developed by the Committee of the Verkhovna Rada on Social Policy and Protection of Veterans’ Rights.
This is reported by Finway
Conditions for conducting business without IE and the list of permitted services
The draft law defines key requirements for households that wish to engage in entrepreneurial activities without IE status. In particular, the annual income from such activities must not exceed 8 million hryvnias, and only members of the household itself can be involved in the work. The submission of an annual tax declaration by the household is also mandatory.
It is planned that households will be able to officially provide a wide range of services, including:
- hairdressing and cosmetology services;
- legal consultations;
- domestic help services;
- care for sick or disabled individuals;
- individual lessons (tutoring);
- individual child education (governess);
- cleaning and sanitizing premises on demand;
- repair of shoes, clothing, textile and knitwear products, furniture, electrical appliances, watches, tools, and other household items;
- technical maintenance and repair of musical instruments;
- laundry and ironing services;
- retail trade of goods at markets and from stalls;
- transportation of passengers and goods by road;
- activities in the restaurant industry;
- services in aesthetic cosmetology, except those subject to licensing;
- other types of work that do not require a license and are not classified as independent professional activities under the law.
The draft law also proposes to combine entrepreneurship with social support, particularly targeted assistance for those in difficult life circumstances. To receive such assistance, defined as a “social transfer,” the household must submit an annual tax declaration. However, the obligation to declare does not apply to pensioners and scholarship recipients.
Legal remarks and potential risks
Experts point out a number of controversial issues and shortcomings in the draft law. The question of how state registration of a household will occur in case of non-compliance with the established requirements remains unresolved. There are also no provisions for amending the legislation regarding the state registration of legal entities and individual entrepreneurs.
Particular concern is raised by the potential for corruption risks, as the current version of the draft may allow individuals who are explicitly prohibited by law, including under the Law of Ukraine “On Combating Corruption,” to conduct business.
Among the legal shortcomings, there is also uncertainty regarding the introduction of the new term “household” as an economic entity, which may lead to confusion in law enforcement.
“This creates a direct conflict with the Family Code, where the concept of ‘family’ is mentioned. Until now, the term ‘household’ has been used in Ukraine exclusively for statistical population censuses, not as a form of economic entity,” writes the Ministry of Finance.