The number of workers who operate as individual entrepreneurs in Ukraine has hit a five-year high of 2 million, monitoring service Opendatabot reported on Dec. 20.
In the first 11 months of 2021, a total of 85,000 new people registered as individual entrepreneurs, continuing a growing trend that's been going on since 2016, which only saw a downturn because thousands of inactive registrations were revoked, according to Opendatabot.
An individual entrepreneur, also known as a sole proprietor and by its Ukrainian abbreviation FOP, is a simple and flexible business structure in Ukraine. Compared to employees with full labor contracts, an individual entrepreneur and those who hire them enjoy considerable tax savings. It's a very popular way of hiring employees for Ukrainian companies, including in the country's large IT industry. That can change soon.
The growth in the number of individual entrepreneurs has slowed down in 2020 due to the quarantine lockdowns.
There are, however, ongoing concerns about a law that requires some categories of individual entrepreneurs to use point-of-sale terminals starting in January 2022. Entrepreneurs said this requirement would burden them unfairly and held numerous protests against it. A vote to delay the implementation of this law failed to garner enough votes in parliament on Dec. 17.
In 2020 private entrepreneurs contributed $1.93 billion (Hr 52.5 billion) in taxes to the Ukrainian budget, Opendatabot reported.