Poland
Ukraine
Poland and Ukraine share the busiest business border in the region, and it is worth being honest about the direction of the traffic: far more Ukrainian founders open Polish companies than the reverse. If you arrived here looking for that, this is the wrong page.
This one is for the Polish company or founder going the other way: opening a Ukrainian entity to manufacture, to contract, to hire, or to book revenue on the Ukrainian side of a relationship that already exists. Ukrainian law puts no condition on your nationality, so the legal answer is simple. The interesting questions are Polish ones.
Key facts for Polish founders
| Question | Answer |
|---|---|
| Can a Polish resident own a Ukrainian company? | Yes, 100%, individual or corporate |
| Ukrainian permit needed to own? | No |
| Ukrainian permit needed to be director? | Yes, a work permit |
| Ukrainian corporate tax | 18%, against Poland's 19% standard rate |
| Withholding on dividends to Poland | 15% domestic, 5% under the treaty |
| Polish CFC exposure | Possible, and it turns on the effective tax test |
The real reason Polish founders do this
Not the rate. Ukraine's 18% and Poland's 19% standard corporate rate are close enough that no one crosses the border for one point.
- Manufacturing and logistics. Cross-border supply chains that already run daily are easier to operate with an entity on each side.
- Contracting locally. Reconstruction, infrastructure and energy work increasingly requires a Ukrainian counterparty, not a Polish one with a Ukrainian branch.
- Hiring in Ukraine rather than importing labour. For roles that do not need to relocate, a Ukrainian entity is cheaper and simpler than a Polish employment contract.
- Booking Ukrainian revenue in Ukraine. VAT, customs and public procurement all behave differently for a local entity.
Entity or EOR? Settle this first
| Employer of record | Your own Ukrainian entity | |
|---|---|---|
| Time to first hire | Days | Weeks, plus banking |
| Can sign Ukrainian contracts | No | Yes |
| Can bid on local and reconstruction contracts | No | Yes |
| Diia City access | No | Yes, if you qualify |
| Polish CFC analysis | Not triggered | Possible |
| Cost shape | Per employee, per month | Setup, then a fixed annual base |
Build the entity when you need to invoice Ukrainian counterparties, bid on contracts, hold assets locally, or reach Diia City. Below that, an employer of record does the job without adding a foreign entity to your Polish tax position.
Can a Polish resident legally own a Ukrainian company?
Yes, with no restriction on either side. Poland does not prohibit foreign holdings; it taxes them where certain conditions are met.
The money rules: Polish CFC and the effective tax test
Poland operates a controlled foreign entity regime. Where the tests are met, the foreign entity's income is attributed to the Polish shareholder and taxed in Poland, with relief for foreign tax paid. The mechanism turns on three things:
- Control, measured on shares, votes or profit participation.
- The character of the income, with passive income weighted heavily.
- The effective tax actually borne by the foreign entity, compared with what Poland would have charged.
The practical consequence for Ukraine is unusually clean:
- On the general 18% regime, a Ukrainian company sits a point below Poland's 19%. The effective tax test is not where the difficulty lies, and an operating company with real staff and real customers is a straightforward case.
- Under Diia City, the picture changes. Nine percent on distributed profit, and nothing while profit is reinvested, is exactly the profile a CFC regime is built to examine.
- Substance matters in both cases. Real premises, real employees and real decision making in Ukraine support every version of the analysis.
Take Polish advice before electing Diia City, not after. The Ukrainian saving is real; whether you keep it is a Polish question.
The Ukraine-Poland treaty, in numbers
| Payment from Ukraine to Poland | Ukrainian domestic rate | Treaty rate |
|---|---|---|
| Dividends, non-portfolio holding | 15% | 5% |
| Dividends, portfolio holding | 15% | 15% |
| Interest | 15% | 10% |
| Royalties | 15% | 10% |
Three conditions decide whether you get the treaty rate: a Polish residence certificate in the Ukrainian payer's hands before the payment, a shareholding above the treaty's non-portfolio threshold, and correct classification of the income. Most service payments to a Polish parent carry no Ukrainian withholding at all; rent, engineering fees and brokerage do. Boundaries in Ukraine withholding tax for non-residents.
The remote setup path from Poland
- Check the name in the Unified State Register and fix the holding structure.
- Get a Ukrainian tax number (RNOKPP) for every Polish individual who will be founder, director or beneficial owner. Free, three business days, obtainable by proxy.
- Apostille in Poland and translate into Ukrainian, with the translator's signature notarised. A corporate founder adds an apostilled KRS extract and its articles.
- Draft the charter and the founders' decision. Not the free model charter if someone else will hold the signature.
- File offline. Diia is closed to foreign founders, so a representative lodges the file.
- Registration inside 24 hours by statute, with no state fee.
- Fund the share capital within six months, unless the charter sets a different period.
Full sequence in how to register a company in Ukraine.
Which side should invoice which
The question Polish groups actually get wrong. Two entities either side of a border that trade with each other are related parties, and both tax authorities look at the pricing.
- Transfer pricing applies in both directions. Ukraine has its own rules on controlled transactions, including with related non-residents.
- Deemed dividends. Since 2021, Ukraine can recharacterise payments to related non-residents that fail arm's length testing as dividends, taxed at 15%.
- Service fees are usually clean. Most service payments from Ukraine to a foreign parent carry no withholding; rent, engineering and brokerage do not share that treatment.
- Document the arrangement before the first invoice, not at the first audit.
When Ukraine makes sense from Poland, and when it does not
| Situation | Verdict |
|---|---|
| Manufacturing or logistics on both sides of the border | Strong |
| Bidding on Ukrainian reconstruction or public contracts | Strong |
| Hiring Ukrainian staff who stay in Ukraine | Strong, look at Diia City if you reach scale |
| Fewer than five hires, no local revenue | Use an EOR instead |
| Arbitraging 18% against 19% | No. The gap does not pay for a foreign entity |
| A holding company | No. Ukraine is an operating jurisdiction |
Common mistakes from Poland
- Assuming the rate difference is a reason. One percentage point does not fund an entity, an accountant and a director.
- Electing Diia City before taking Polish advice. That is where the CFC analysis becomes live.
- Running cross-border invoicing without transfer pricing documentation. Both authorities look, and Ukraine can recharacterise.
- Requesting the residence certificate after the dividend. Ukrainian relief is applied at payment.
- Naming yourself director in the incorporation documents. Without a work permit the filing fails.
- Reading Ukraine as a lighter Poland. Reporting is comparable and the currency regime has no Polish equivalent.
The bottom line, and how CorpSec helps
For a Polish business, a Ukrainian entity is an operating decision, not a tax one. The rates are a point apart, so the case has to be made on manufacturing, contracting, hiring or booking revenue where it actually arises.
Two things decide whether it goes well: the Polish CFC position, which turns on the effective tax test and therefore on the Diia City question, and the transfer pricing documentation between two related companies either side of a busy border.
CorpSec sets up Ukrainian companies for Polish founders end to end, remotely, with the tax number, a drafted charter, an interim director, registration and banking introductions, alongside your Polish adviser.
Frequently asked questions
Can a Polish citizen open a company in Ukraine?
Yes, and own 100% of it, individually or through a Polish company, with no Ukrainian permit and no visit. The requirements are a Ukrainian tax number, apostilled and translated documents, and a power of attorney if you are not filing in person.
Do Polish CFC rules apply to a Ukrainian subsidiary?
They can. The regime turns on control, on the character of the income and on the effective tax borne abroad. A Ukrainian company on the general 18% regime sits a point below Poland's 19%, which makes the analysis straightforward for a genuine operating business. A Diia City company at 9% is a different conversation.
Is it cheaper to run a company in Ukraine than in Poland?
Operating costs are lower, but the corporate rates are one point apart and Ukrainian reporting is comparable in weight. Treat it as an operating decision rather than a tax saving.
What is the withholding tax on dividends from Ukraine to Poland?
15% domestically, reduced to 5% under the treaty for a qualifying non-portfolio holding, provided a Polish residence certificate is in the payer's hands before the payment. Interest and royalties are at 10% under the treaty.
Can I be the director of my Ukrainian company?
Not without a Ukrainian work permit, and the permit is applied for by the company once it exists. Most foreign founders appoint a resident director at incorporation and replace them three to five months later.
Do I need to travel to Ukraine?
No. A representative acting under a power of attorney notarised in Poland and apostilled can complete the process.
Should the Polish or the Ukrainian company invoice the client?
That is a transfer pricing question, and both authorities examine it. Ukraine applies its own rules to controlled transactions with related non-residents and can recharacterise mispriced payments as dividends taxed at 15%. Document the arrangement before the first invoice.
Should I use an EOR instead of an entity?
If you are hiring a handful of people with no Ukrainian revenue, probably yes, and it keeps the CFC question off the table. Build the entity when you need to invoice locally, bid on contracts or reach Diia City.
Can I take profit out of Ukraine freely?
Dividends move within EUR 1 million per calendar month, once the company has traded a year and you have held the shares six months. Trade payments in both directions are largely unrestricted.
How long does the whole process take?
The Ukrainian registration is a 24 hour statutory decision, but the realistic timeline from a Polish start is two to five weeks, because apostilles, translations and the tax number sit in front of it. Banking adds more.
Sources
- Polish Corporate Income Tax Act: controlled foreign entity rules (zagraniczna jednostka kontrolowana)
- PwC Worldwide Tax Summaries: Ukraine withholding taxes and the Ukraine-Poland treaty rates
- Tax Code of Ukraine: corporate income tax and the Diia City regime
Ukrainian rates, the work permit rule and the 15% domestic withholding reflect the Tax Code of Ukraine as of September 2026. The Polish controlled foreign entity regime is described at the level of its mechanism, not its detailed thresholds, which change and must be confirmed with a Polish adviser; whether a Ukrainian subsidiary falls inside it depends on the control, passive income and effective tax tests applied to your facts. Treaty rates are drawn from the Ukraine-Poland treaty as amended by the multilateral instrument. This is not Polish or Ukrainian tax advice.