FOP vs LLC in Ukraine: What’s the difference and which is better?

Legal status

• LLC is a separate legal entity with its own bank accounts, charter, and management structure.
• FOP is a private individual who has obtained entrepreneur status. The person operates under their own name — no separate legal entity.

Liability

• LLC is liable only within its charter capital — personal assets of participants are protected.
• FOP is personally liable — including personal property.

Taxes and reporting

• FOP (Simplified tax system):
  ▸ 5% tax (or 3% + VAT);
  ▸ Simplified reporting
  ▸ No need to pay yourself a salary

• LLC (Depends on chosen tax system):
  ▸ 18% corporate income tax or 5% unified tax (if using simplified system)
  ▸ Full accounting required
  ▸ Director must receive a salary
  ▸ Higher trust level from banks and partners