An office building, an arrow and an archive box holding personnel files

Closing a company in Ukraine: HR, payroll and FOP risks

Bystefan

Legal notice: This article is general information, not legal or tax advice. Every company's situation is unique. Before you act, get advice from a Ukrainian lawyer and a tax adviser on your specific case.

A voluntary liquidation of a Ukrainian limited liability company (ТОВ) cannot end sooner than two months after the liquidation notice is published, because that is the shortest creditor-claim period the law allows. How much longer it takes, and what it costs, depends largely on the people side:

  • notice and severance for employees;
  • the final payroll and reports;
  • personnel records that must be kept for 75 years;
  • contractor arrangements with individual entrepreneurs (FOPs) that the tax authority may treat as employment.

The single social contribution (ЄСВ) has no limitation period at all. This guide sets out what Ukrainian law requires as of 26 September 2026 and links every rule to its source.

The legal sequence in brief

StepWhat the law requiresSource
DecisionThe participants decide to liquidate; a sole participant decides alone, in writing. The decision appoints a liquidator or liquidation commission and sets how and by when creditors must claim: at least 2 and at most 6 months from publication of the noticeCivil Code art. 105(3), (5); LLC Law art. 37
RegistrationThe state registrar must be notified within 3 business days of the decisionCivil Code art. 105(1)
ControlManagement powers pass to the liquidator from the moment of appointmentCivil Code art. 105(4)
Debtors and creditorsThe liquidator collects receivables and notifies each debtor in writing. Each creditor claim is decided and answered within 30 days of receipt. A rejected creditor may sue within one monthCivil Code arts. 111(1), 105(6), 112(3)
Bank accountsAll accounts except the one used to pay creditors are closed before the creditor period endsCivil Code art. 111(3)
EmployeesThe liquidator dismisses employees in line with labour law (see the next section)Civil Code art. 111(5)
Tax and Pension FundThe liquidator provides the documents needed for audits, including primary documents, and files reports for the last period before the liquidation balance is approvedCivil Code art. 111(7), (10)
Interim balanceAfter the creditor period, the liquidator draws up and approves an interim liquidation balanceCivil Code art. 111(8)
Paying creditorsCreditors are paid in order: 1st, injury and death claims and secured claims; 2nd, employees' claims and authors' royalties; 3rd, taxes and fees; 4th, everyone else. Claims in the same queue are paid pro rataCivil Code arts. 111(9), 112(1)
Final balanceThe liquidator approves the liquidation balance and submits it to the tax authority. What remains goes to the participantsCivil Code art. 111(11), (12)
ArchiveDocuments that must be kept go to the relevant archive, which issues a certificateCivil Code art. 111(13); Law 755-IV art. 17(14)
Final filingThe application and archive certificate are filed once the procedure is complete, and never before the creditor period endsLaw 755-IV art. 17(14)
EndThe company ceases to exist on the day its termination is entered in the Unified State RegisterCivil Code art. 104(5)

If the company becomes insolvent along the way, for example because its debts due exceed its assets, it must apply to the commercial court within one month. Management that fails to do so is jointly liable for unpaid creditor claims (Bankruptcy Procedures Code art. 34(6)).

Employees: notice, severance and protected groups

Notice and severance.

  • Every employee gets personal written notice at least 2 months before dismissal (Labour Code art. 49-2).
  • The same article requires the employer to offer other available work at the enterprise, and that duty is not limited to reorganisations (art. 49-2).
  • Dismissal is on the liquidation ground (art. 40(1)(1)). Severance is at least one month's average pay (art. 44), plus pay for all unused leave (art. 83).
  • In the creditor queue, employees' claims come second, ahead of taxes (Civil Code art. 112(1)).

Mass release.

  • The employment centre must be told only when the release is “mass” (Labour Code art. 49-2; Law 5067-VI art. 48).
  • Releasing all staff within one month is a mass release for any employer with 20 or more employees. An employer with fewer than 20 never qualifies.
  • The notice goes on form 4-ПН at least 2 months before the release (art. 50; Order 563). Failing to file carries a fine of 4 × minimum wage, UAH 34,588 (art. 53).
  • The implementing order still contains older wording that exempted liquidations, which the current law no longer has. Confirm with the local employment centre.

Protected parents.

  • The employer may not dismiss the following people on its own initiative, except on full liquidation, and even then only “with mandatory re-employment” (Labour Code art. 184):
    • pregnant women;
    • women with a child under 3, or under 6 on medical advice;
    • single mothers of a child under 14 or of a child with a disability.
  • The same protection extends to fathers raising children alone, guardians and certain others (art. 186-1).
  • The Code does not say how re-employment is to be arranged. Take legal advice before dismissing anyone in these groups.

Mobilised employees.

  • A mobilised employee keeps their place of work and position until the special period ends or they are discharged. Since 19 July 2022 the state pays them, not the employer (Labour Code art. 119; Law 2352-IX).
  • The Code has no express exception for liquidation. The state Free Legal Aid service treats liquidation as one (legalaid.gov.ua), but we found no Ministry of Economy position.
  • Breaching the guarantees for mobilised staff carries a fine of 4 × minimum wage, UAH 34,588 (art. 265).

What martial law changes (Law 2136-IX):

  • Leave. Employees on sick leave or annual leave can be dismissed, with effect from the first working day after the leave ends. This does not extend to maternity leave or childcare leave until age 3 (art. 5(1)). Outside martial law, the Labour Code's ban on dismissal during leave never applied to full liquidation (Labour Code art. 40).
  • Trade unions. The Labour Code rule on trade-union consent does not apply, except for employees elected to trade-union bodies (art. 5(2)).
  • Contact details. Both sides must keep their contact details up to date. If one side does not, notice to its last known address, email or phone counts as delivered (art. 7(3)–(4)).

Military registration.

  • For employees on military registration, the employer sends the territorial recruitment centre (ТЦК) a notice of changed registration data within 7 days of each dismissal order (Cabinet Resolution 1487).
  • A deferral from mobilisation (бронювання) is annulled on the employee's dismissal or on liquidation of a critically important enterprise. The head of the enterprise files the annulment through Diia (Cabinet Resolution 76).

Payroll, reports and records

Final settlement on the day of dismissal.

  • All amounts due are paid on the day of dismissal. If the employee did not work that day, they are paid no later than the day after the employee asks (Labour Code art. 116).
  • The same day, the employee receives a copy of the dismissal order and a written statement of the amounts (art. 47).
  • If payment is late through the employer's fault, the employer owes average pay for the whole delay, up to six months (art. 117).

Contributions and tax on final payments.

PaymentSingle social contribution (ЄСВ)PIT
SeveranceNo (Cabinet Resolution 1170, item 4; ЗІР 28652)Yes
Pay for unused leaveYes, if accrued in the month of dismissal (ЗІР 29135)Yes (Tax Code 14.1.48, 164.2.1)
Compensation for late settlement (art. 117)No (Cabinet Resolution 1170, item 5)—

Reports.

Records. Personnel and payroll records must be kept for 75 years, long after the company is gone. The section on records after liquidation below sets out the periods, the steps and where the records can go.

FOP arrangements: the hidden-employment risk

The legal test.

  • A company paying an individual entrepreneur (FOP) normally withholds no tax.
  • The exception is when the relations under the contract are in fact employment, so that the parties can be equated to an employee and an employer (Tax Code 177.8, read with the definitions in 14.1.195 and 14.1.222).
  • The law gives no list of indicators. Official guidance from the State Labour Service names these (Dnipropetrovsk office, 27 Feb 2020):
    • systematic payment for the process of work rather than its result;
    • subordination to internal work rules;
    • work in a profession or position from the national classifier;
    • a workplace provided by the employer;
    • compliance with labour-safety rules.

What the courts have done.

  • In the Supreme Court decisions we reviewed, the Tax Service lost where it could not prove that the relations were in fact employment. See 826/14341/17 (10 Oct 2023) and 520/27606/21 (21 Feb 2024).
  • Its successes were referrals back to the lower court for fuller fact-finding, for example 640/23279/19 (8 Dec 2021).
  • We found no final Supreme Court ruling upholding a reclassification on the merits, although the court register search was not exhaustive.
  • Either way, a dispute takes time, and the company cannot be struck off while debt is recorded against it.

What an audit can assess.

ItemRateHow far backFines if assessed
Single social contribution (ЄСВ)22% of the fees, capped at 15 × minimum wage a month (20 × in 2025–2026)No limitation period20% of the unpaid amount, plus 10% per period up to 50%; penalty 0.1% a day. No fines or penalty for violations from 24 Feb 2022 to 31 Jul 2023
PIT + military levy18%; levy 1.5% on income accrued to 30 Nov 2024, 5% from 1 Dec 20241,095 days after each reporting deadline; the Covid and war suspension ended on 31 Jul 202310% (25% if intentional); penalty 120% of the NBU rate a year

Sources for the table:

Martial-law reliefs. These apply while martial law lasts; it currently runs to 31 October 2026 unless extended again (Law 4928-IX).

  • Paying within 30 days. When tax or the single social contribution (ЄСВ) assessed by an audit is paid within 30 days, the fines are cancelled and no penalty accrues, but the amount can no longer be appealed (Tax Code p. 69.37; Law 2464-VI s. VIII p. 9-24).
  • Correcting before an audit. PIT the company corrects itself carries no fines or penalty (p. 69.38). When the company adds the single social contribution (ЄСВ) itself, the fine is 10% per period, up to 50% (Law 2464-VI art. 25(11)(3)).
  • Once an audit starts, corrections for the periods under audit are no longer possible (Tax Code 50.2).

Labour inspection.

  • Admitting someone to work without an employment contract costs 10 × minimum wage per worker, UAH 86,470, or 30 × on a repeat within two years. Single-tax groups 1–3 get a warning for a first violation (Labour Code art. 265).
  • Under martial law, an unscheduled inspection needs a trigger, such as an application from an employee or a trade union. No fine is imposed if the inspector's order is carried out in full and on time (Law 2136-IX art. 16).
  • A Diia City gig contract concluded under that regime's rules does not count as admission to work without a contract (Labour Code art. 265).

Criminal exposure.

  • Intentional evasion becomes a crime above set thresholds. In 2026 these are UAH 1,664,000 for the single social contribution (ЄСВ) and UAH 4,992,000 for tax; earlier years use lower figures (Criminal Code arts. 212, 212-1 with notes; Budget Law 2026).
  • Paying the amounts, fines and penalty in full before being brought to criminal liability exempts the person, except a repeat tax offender (art. 212(4), 212-1(4)).
  • On the sanctions these articles carry, the criminal limitation period is 5 years, or 10 years for the gravest forms (art. 212 parts 2–3 and art. 212-1 part 3) (Criminal Code arts. 12, 49).

Practical steps.

  • Build a file for each FOP: contract, invoices, monthly payments, start and end dates, other clients.
  • Never create or backdate contracts, acts or invoices; that can amount to forgery (Criminal Code arts. 358, 366).
  • Decide with a tax lawyer, before the liquidation decision, whether to correct voluntarily, wait for an audit and pay within 30 days, or defend.

How far back the authorities can go

Each liability has its own limitation clock. The single social contribution (ЄСВ) has none, tax and PIT close after 1,095 days, and criminal liability after 5 or 10 years. The dates below apply on 26 September 2026 and move forward every day.

LiabilityLimitationHow it is countedStill open on 26 September 2026
Company taxes, such as corporate income tax and VAT1,095 days (Tax Code 102.1)From the day after the filing deadline, or after the actual filing if the return was late. The clock stood still from 18 March 2020 to 31 July 2023Periods whose return was due on or after 27 September 2023
PIT and military levy the company withheld, or should have withheld1,095 days (Tax Code 102.1)The same. From 2021 to 2025 the report was quarterly, due 40 days after the quarter; since 2026 companies file monthly, 20 days after the month (Law 116-IX; Tax Code 51.1, 49.18.1–49.18.2)From the third quarter of 2023. Its report was due on 9 November 2023, so it can be assessed until 8 November 2026
Single social contribution (ЄСВ), with its fines and penaltyNone (Law 2464-VI art. 25(16))—Every month, however far back
Labour Code fine for work without an employment contractNone set in the Labour Code or in the Cabinet's fine procedure (art. 265; Resolution 509)The fine uses the minimum wage in force when the violation is foundNo end date in the law
Criminal liability for evading tax or the single social contribution (ЄСВ)5 years; 10 years under art. 212 parts 2–3 and art. 212-1 part 3 (Criminal Code arts. 12, 49)From the day of the offence until the verdict takes effectOffences committed after 26 September 2021, or after 26 September 2016 under the 10-year rule
  • Exceptions. Tax has no limitation if the return for the period was never filed, or once an official is convicted of evading it or the criminal case is closed on non-exonerating grounds (Tax Code 102.2). The clock also stops while the company appeals an assessment, while an audit is barred, and in other listed cases (102.3).
  • The paused years. Quarantine stopped the clock on 18 March 2020, martial law kept it stopped, and it restarted on 1 August 2023 (Tax Code s. XX subs. 10 p. 52-2, p. 69.9; State Tax Service).
  • Debt already assessed. Tax assessed in time can be collected for another 1,095 days after it becomes debt, and until it is paid under a court decision (Tax Code 102.4).
  • FOP arrangements. If fees are reclassified as wages, PIT and military levy can be added only for the open periods, but the single social contribution (ЄСВ) for every month of the arrangement. On 26 September 2026, an arrangement that ended before July 2023 is out of reach for PIT and levy unless an exception applies; it is not out of reach for the single social contribution (ЄСВ).
  • Records follow the clock. The Tax Code's record-keeping periods are extended by any time the clock stops under 102.3 (Tax Code 44.3).

Tax audit, debts and getting money out

The Tax Service learns about the liquidation immediately. The register passes the decision to the Tax Service and the Pension Fund on the day it is registered (Law 755-IV art. 13(2)).

An audit is possible, not automatic.

  • Starting a liquidation is a ground for a documentary unscheduled tax audit, which the head of the tax office orders (Tax Code 78.1.7, 78.4).
  • The law sets no deadline for it.
  • Once an audit starts, the company can no longer correct its returns for the periods under audit (Tax Code 50.2).

Any debt blocks the end.

  • The Tax Service forms its payment demands no later than the creditor-claim deadline. Liabilities assessed before termination count as debt even if not yet due (MinFin Order 1588 pp. 11.6, 11.10).
  • The registrar refuses the final registration while it holds information on any of these (Law 755-IV art. 28(1)(11)):
    • tax or single social contribution (ЄСВ) debt;
    • Pension Fund arrears;
    • open enforcement or bankruptcy proceedings;
    • stakes the company still holds in other entities;
    • branches that are still open.
  • The liquidator is responsible for paying the tax debts (Tax Code 97.4.1).

VAT.

  • VAT registration ends once the liquidation balance is approved and VAT liabilities are paid (Tax Code 184.1), or automatically on the termination record (184.2).
  • Assets whose input VAT was claimed but which were not used in taxable operations attract VAT at their ordinary price in the last period (184.7).

Paying out the owners.

  • What is left after creditors goes to the participants (Civil Code art. 111(12)).
  • For a foreign participant, the part above its paid-in contribution is treated as a dividend and taxed at 15%, or at a lower treaty rate (Tax Code 14.1.49, 141.4; MinFin consultation 480/2021).
  • Under martial-law currency rules, transfers abroad are banned except for listed operations (NBU Resolution 18 p. 14).
    • Liquidation proceeds are not on the list, so they need an individual NBU permit.
    • Dividends are on the list: up to EUR 1m a month, from profits earned since 2023, for a company that has operated for 12 months and an investor who has held the stake for 6 months (sub-p. 46).
    • The NBU confirmed in August 2026 that the list of permitted operations had not changed (NBU, 10 Aug 2026).

Records after liquidation: what to keep, for how long, and where

The company's records outlive it. The liquidator must put them in order, hand those that must be kept to an archive, and file the archive's certificate with the final application (Civil Code art. 111(13); Law 755-IV art. 17(14)).

How long the records are kept.

RecordsMinimum periodSource
Personnel orders on hiring, transfer and dismissal; employment contracts that replace such orders; hiring and dismissal registers75 yearsMoJ Order 578/5 list, items 16(б), 492, 529
Personal files and personal record cards75 years after dismissalItems 493, 499
Payroll statements and personal pay accounts75 yearsItem 317(а)
Primary accounting documents and accounting registers5 years; longer if they relate to an audit or an appealItems 336, 351 and the note to item 186
Tax recordsThose for at least the last 1,825 days before the liquidation date go to the archive; 2,555 days for transfer-pricing, CFC and non-resident-payment recordsTax Code 44.3

Steps and timing.

  1. Before the decision: check that the records are complete and in Ukraine. Lost or damaged documents are reported to the Tax Service within 5 days and restored within 90 days (Tax Code 44.5).
  2. From the decision: the liquidator puts the records in order, including personnel, payroll, accounting and tax records, and agrees with the State Archival Service, or an archive it authorises, where they will be kept (Law 3814-XII art. 32(3)).
  3. After the last dismissal and the final payroll: the files are completed and listed in inventories, including short-term files that are otherwise not inventoried (MoJ Order 1000/5 Rules). The inventory of long-term files is reworked to separate the records on citizens' social protection, then agreed with the expert commission of the state archive or approved by the archival department of the district administration or city council (Rules).
  4. Before the final filing: the records go to the archive, which certifies that it has accepted the documents subject to long-term storage. That certificate and the application are the two documents for the final filing, which cannot be made before the creditor period ends (Law 755-IV art. 17(14)).
  5. After termination: the archive keeps the records for the rest of their periods.

Where the records can go.

  • An archive of the local council. The archives of village, settlement and city councils provide centralised storage for records of employment and other relations of companies and individuals that are not part of the National Archival Fund (Law 3814-XII art. 29).
  • A private archival institution. It may keep records that do not belong to the state or local communities. The contract with the company sets the storage periods, taking the legal minimums into account, and where the records go if the archive itself closes (art. 33).
  • A state archive. Documents of the National Archival Fund, if the company holds any, can be passed to state archival institutions (art. 32(1)).

Whichever route you take, agree the place of storage with the State Archival Service or an archive it authorises (art. 32(3)). Ask the archive early about its fee, lead time and the inventories it needs: its certificate decides when you can make the final filing.

Foreign owners and directors

None of the rules in this guide requires a foreign owner or director to be in Ukraine in person. Several steps still need preparation:

  • Documents signed abroad. These must be legalised or apostilled and come with a certified Ukrainian translation. A foreign company also provides an extract from its home register that is no more than one month old (Law 755-IV art. 15(1)(13), (13-1), (14)).
  • Tax number for the liquidator. The decision must state each liquidator's Ukrainian tax number (RNOKPP) (Law 755-IV art. 15(1)(7)). A foreigner abroad can apply by post, or through a representative with a notarised power of attorney, and the card can be sent abroad (Ministry of Finance Order 822; State Tax Service, Kharkiv office).
  • Qualified e-signature (KEP). The Tax Service's own trust provider registers a new signer in person only and does not accept a power of attorney. A foreigner brings a passport with a notarised translation and a copy of the RNOKPP (ca.tax.gov.ua). The law allows remote identification only for someone who already holds a qualified certificate or an electronic ID issued in person (Law 2155-VIII art. 22). Appointing a Ukraine-based liquidator avoids both issues.
  • Work permit. A Ukrainian company needs a permit to employ a foreigner, and a foreign director is no exception. Founders and participants are not exempt. The fine for employing a foreigner without one is 20 × minimum wage, UAH 172,940 (Law 5067-VI arts. 42, 53(5)).
  • Tax audit. The Tax Service may invite the taxpayer or its representatives for explanations, so a representative can attend (Tax Code 20.1.1).

Before any trip, check your own government's travel advice. The UK Foreign Office, for example, advises against all travel to most of Ukraine, including Kyiv, and airspace is closed (gov.uk).

Where to start

Six checks before anyone signs the liquidation decision:

  1. Size the debts, including what an audit could assess on contractor payments. If debts that are due exceed the assets, the case is a bankruptcy, not a voluntary liquidation.
  2. List every employee with their status: on leave, mobilised, protected parent, elected union member, foreign national.
  3. Build a file for each FOP and choose the route (correct, wait and pay, or defend) with a tax lawyer.
  4. Check the records: complete, in Ukraine, and restored where documents are lost. Pick the archive early.
  5. Choose the liquidator, and check that they have a Ukrainian tax number and, if they will file electronically, a qualified e-signature.
  6. Plan the money: keep enough in Ukraine to pay any assessment within 30 days, and settle how anything left will reach the owners.

The ClarusApex liquidation self-check turns these questions into a timeline and a list of the risks that apply to your company, with the source of each rule. Your answers never leave your browser.

ClarusApex runs payroll and HR compliance for companies in Ukraine. Contact us to talk through your case.

Sources

All laws were read in their consolidated versions on zakon.rada.gov.ua, in force on 26 September 2026.

This article explains the legal position as of 26 September 2026. It is not legal advice.

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