State assistance for the unemployed to start a business

Starting January 1, 2022, the state plans to allocate UAH 97,500 in start-up capital assistance for businesses from the budget. This funding will be available to low-income Ukrainian citizens, as well as those who have been unemployed for a long time.

New entrepreneurs will be able to repay the assistance they receive to the state budget by paying social contributions and taxes that will be deducted during their business activities. More detailed information about the new government program can be found below.

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According to the Ministry of Social Policy of Ukraine, a new state social program will be launched in Ukraine beginning next year. Its goal is to provide basic financial assistance to those who lack the means to start their own business.

The program's implementation has already been tested during the launch of the "Helping Hand" pilot project. The ministry developed and implemented it with support from the World Bank. The program was part of the global government project "Modernization of the Social Support System for the Population of Ukraine" from 2016 to 2019.

Then the aid was paid out230 long-term unemployedin three areas:

• Kharkov;
• Poltava;
• Lviv.

And also in some territorial communities of Zhytomyr, Chernihiv and Donetsk regions.

The state has provided one-time, interest-free repayable assistance to those wishing to become entrepreneurs, thereby providing the opportunity to start their own business.

• According to statistics, more than 90% of new entrepreneurs continue to operate successfully to this day.

15 minimum wages - basic assistance on the way to starting your own business  

The procedure for providing assistance to the above-mentioned categories of citizens is approved by the Resolution of the Cabinet of Ministers of Ukraine “Some issues of promoting the economic independence of low-income families” dated 04/21/21.

According to this document, the state plans to provide assistance to the long-term unemployed and to anyone who wants to improve their financial situation.

The planned payment amount at the beginning of 2022 is up to 15 minimum wages.

With the funds received, future entrepreneurs will be able to pay for:

• purchase of equipment;
• and the materials they need to start their own business.

Who can get help?

• Unemployed able-bodied individuals from low-income families
• Long-term officially unemployed

Where to go and what to do?

• Submit an application to the regional employment center
• Provide a self-developed business plan 
• Wait for the application to be reviewed by a special commission

The decision is positive: what next?

• Within 30 days, you must register a sole proprietorship or create a legal entity 
• Provide the regional employment center with an invoice for the purchase of equipment and materials, as well as an agreement with the supplier of these materials
• Based on these documents, the state employment service will pay your costs.

How and when to repay the aid amount?

In the new year, there will surely be many people seeking government financial support to start their own business. But the main question, of course, is how to recoup that money?

• The return period is 30 days from the end of the 3-year period from the date of receipt of funds.
• The mechanism for receiving assistance provides for the return of funds received from the state through the payment of social contributions.
• But, first of all, taxes that must be transferred to the state budget in the process of conducting business activities.
• In other words, for those who open their own business and develop it, the amount of this “state loan” will decrease with each tax payment.

Who is not entitled to repay a government loan?

• A newly minted entrepreneur who will be able to employ 2 more people through the employment center 
• In case the amount of taxes exceeds the amount of assistance provided

In what case will the aid have to be repaid early?

• If you do not carry out business activities after receiving financial assistance from the state, the money will have to be repaid.
• You will also need to do this if you have more than three months of arrears in taxes, fees, or unified social contribution.

Opportunity to realize yourself in small business

The launch of the program demonstrates the state's commitment to offering assistance to the long-term unemployed, as well as to those receiving state benefits, so that they can return to active social life.

According to Ukraine's Minister of Social Policy Maryna Lazebna, this is a very timely state program, offering "an excellent opportunity to realize oneself in small business" to those who have been unemployed for a long time, those who lost their jobs due to the force majeure caused by the coronavirus epidemic, and those working "in the informal sector of the economy."

If you plan to take advantage of this government support to start your business, when drafting your business plan, we recommend remembering to create a website to present your products or services online. This can be done usingWordPress, having taken care of registration in advancedomainand choosing qualityhosting.