Investment analysis by Ruslan Averin — originally published at averin.com.
The question comes up every time someone compares 23% on investment profit with 5% on a FOP: can the portfolio simply sit inside a sole proprietorship and pay the lower rate?
The short answer is no, and the reason is worth understanding, because the long answer contains a legitimate use that most of the shortcuts miss.
What a third-group FOP costs in 2026
| Item | 2026 |
|---|---|
| Single tax, without VAT | 5% of turnover |
| Single tax, with VAT | 3% of turnover |
| Military levy | 1% of actual income |
| ESV, monthly | 1,902.34 UAH |
| Minimum wage (drives ESV and the cap) | 8,647 UAH |
| Annual income cap | 10,091,049 UAH |
The single tax and the military levy are paid quarterly. Note the levy: 1% for a third-group FOP, against 5% for an individual. It is not the same levy rate, and mixing the two produces a wrong number in either direction.
Why the portfolio does not fit
Three separate obstacles, any one of which is enough.
Activity codes. The simplified system taxes revenue from registered business activity. Trading securities for one's own account is not an activity a third-group FOP conducts under the single tax — income that arrives outside the permitted activities is taxed at 15% and pushes the FOP off the simplified system.
Income classification. Investment profit and dividends of a physical person are taxed under their own articles of the Tax Code, by their nature, not by which registration the person happens to hold. Opening a FOP does not reclassify a share sale into business revenue.
The broker. A foreign brokerage account opened by an individual holds the individual's assets. Routing personal investment returns through a business account does not change what the income is; it adds a currency-control and reporting problem on top of a tax question that was never solved.
Where a FOP genuinely helps
It helps where the income is actually business income. Consulting, IT services, contract work billed to foreign clients — that revenue at 5% plus 1% is dramatically cheaper than the 18% plus 5% an employee or a general-system individual pays, and it is the reason the third group is as popular as it is.
The realistic structure for someone with both is two channels, kept separate: earn through the FOP at 6% combined, then invest the money already taxed, personally, and pay 23% only on the investment gain when it is realised. Trying to merge the channels risks the simplified status itself, which is the more valuable of the two things.
The cap and what breaches it
10,091,049 hryvnia is the annual ceiling. Cross it and the excess is taxed at 15%, and the FOP transitions to the general system from the next quarter — where the rate becomes 18% plus 5% on net profit, and the accounting burden changes shape entirely.
The cap moves with the minimum wage, which means it moves every January. Anyone running close to it should recalculate in the first week of the year rather than in December.
How I read it
The 5% headline invites a structural mistake: treating a business regime as an investment regime because the number is smaller. They tax different things.
The right question is not "how do I get my portfolio into the FOP" but "which of my income is genuinely business revenue" — and then routing that, and only that, through the simplified system. The tax saved on the earning side is larger than anything available on the investing side, and it is available legitimately.
More market analysis by Ruslan Averin at averin.com.
