Entity Setup
Structuring Your Business Entity in Other Europe: How to Choose the Right Entity
Choosing the right entity type in Ukraine, Belarus, or Moldova can significantly impact your tax liability, compliance burden, and long-term growth—learn how to make the best decision.
By NomadicTax Research Team • 5-8 min read • August 11, 2026
## Why Entity Choice Matters
When setting up a business in **Other Europe** (Ukraine, Belarus, Moldova, etc.), your choice of legal form (sole proprietorship, limited liability company, etc.) affects:
- **Tax rate & regime**: different entity types are subject to different corporate income tax, dividend withholding, VAT, or special regimes like “professional income tax.”
- **Liability**: entities like limited liability companies protect founders from personal liability; sole proprietorship/individual entrepreneur may not.
- **Reporting/Compliance burden**: accounting requirements, audit thresholds, and frequency of reporting vary enormously.
- **Access to incentives**: some legal forms can access investor or technology tax incentives more easily.
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## Key Entity Types Across the Region (With Examples)
| Country | Common Entity Types | Corporate Income Tax Rate | Notable Regimes / Features |
|---|---|---|---|
| **Belarus** | **Individual professional income tax (NPD)** / sole proprietorship / LLC | Standard CIT ~18-20% for companies; individuals on NPD ~10%/4% or ~20% if high income ([nalog.gov.by](https://nalog.gov.by/news/35865/?utm_source=openai)) | NPD regime includes minimum monthly tax from July 2026 even if income is zero; retirement status affects rate ([nalog.gov.by](https://nalog.gov.by/news/35865/?utm_source=openai)) |
| **Moldova** | Independent entrepreneur (“antreprenor independent”)/SRL (LLC) | Corporate rate ~12% standard; unique unified tax for independent entrepreneurial activity: 15%, rising to 35% if income exceeds threshold ([sfs.md](https://www.sfs.md/en/news/modificarile-efectuate-in-codul-fiscal-pentru-anul-2026-privind-impozitul-pe-venit-tva-accize-impozite-si-taxe-locale?utm_source=openai)) | New unified tax regime for service-based entrepreneurs from Jan 2026; simplified obligations (no accounting if under thresholds) ([sfs.md](https://www.sfs.md/en/news/modificarile-efectuate-in-codul-fiscal-pentru-anul-2026-privind-impozitul-pe-venit-tva-accize-impozite-si-taxe-locale?utm_source=openai)) |
| **Ukraine** | ФОП (individual entrepreneur), TOV (LLC), Joint-stock companies | CIT ~18%, flat rates for single tax/FOP depending on group; plus special rules for defense sector, e-excise launch, etc. ([tax.gov.ua](https://tax.gov.ua/en/mass-media/news/968973.html?utm_source=openai)) | New rules for declarations / registration; upcoming changes to excise mark system; single contribution deadlines vary by industry (e.g. mining) ([tax.gov.ua](https://tax.gov.ua/en/?utm_source=openai)) |
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## Practical Checklist for Entity Setup & Tax Planning
1. **Estimate your revenue & activity type**: Will you exceed thresholds for simplified tax or VAT registration? For example, Moldova’s regime gives advantage to entrepreneurs whose revenue doesn’t exceed **1,200,000 lei** per year. Above that, a higher rate applies. ([sfs.md](https://www.sfs.md/en/news/modificarile-efectuate-in-codul-fiscal-pentru-anul-2026-privind-impozitul-pe-venit-tva-accize-impozite-si-taxe-locale?utm_source=openai))
2. **Consider residency & treaty benefits**: If you (or shareholders) are residents elsewhere, explore double tax treaties to avoid excessive withholding. Entity structure may affect treaty eligibility.
3. **Check incentive regimes**: E.g., Belarus’ **robotisation** incentives: preferential VAT on imports of robots, enhanced depreciation, etc. ([nalog.gov.by](https://nalog.gov.by/news/35850/?utm_source=openai))
4. **Compliance cost estimation**: Simplified regimes like Moldova’s “unified tax” or Belarus’ NPD can save on accounting / audit costs—but may limit deductibility.
5. **Exit / transfer impacts**: Some regimes tax sale of securities or corporate rights more heavily—or create additional reporting obligations. Ukraine’s Law № 4577 introduced obligations for legal entities under single tax group IV receiving profits on securities or corporate rights. ([tax.gov.ua](https://tax.gov.ua/en/new-about-taxes--news-/979520.html?utm_source=openai))
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## Case Example: Choosing an Entity When Starting a Service Business in Belarus vs Moldova
- **Belarus**: You start as a freelancer using the NPD regime. From **July 1, 2026**, you’ll owe a **minimum monthly tax of 45 Belarusian rubles**, even with zero income (if still registered as NPD taxpayer). Pensioners have reduced minimum. ([nalog.gov.by](https://nalog.gov.by/news/35502/?utm_source=openai))
- **Moldova**: If your annual service revenue stays below the 1,200,000 lei threshold, under the new unified tax regime you pay **15%**, and you are relieved from many formal accounting requirements. Over that, you pay 35% on the excess. ([sfs.md](https://www.sfs.md/en/news/modificarile-efectuate-in-codul-fiscal-pentru-anul-2026-privind-impozitul-pe-venit-tva-accize-impozite-si-taxe-locale?utm_source=openai))
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## Actionable Steps to Get Started
- Choose entity type: LLC/TOV for shareholders, independent entrepreneur/FOP/NPD for small scale.
- Compute your expected income band and select regime accordingly.
- Verify what documentation & registration are required, in tax authority portals (Belarus- nalog.gov.by; Moldova- sfs.md; Ukraine- tax.gov.ua).
- If eligible, apply for incentive programs (e.g. Belarus robots, Ukraine’s digital excise mark preparation).
- Set your bookkeeping/IT for periodic declarations; digital tools often required or beneficial.
With the right structure in place, entrepreneurs can optimize taxes, minimize risks, and focus more on growing their business, not wrestling with avoidable liabilities.