Parliament Proposes Introducing Family Entrepreneurship as a Separate Form of Employment

Ukraine may officially introduce family entrepreneurship as a distinct form of employment. The relevant draft law No. 13109 is currently under consideration by the Verkhovna Rada Committee on Economic Development.

The initiative is aimed at supporting small businesses and fostering the recovery of the country’s economic and human potential, particularly in the post-war period.

What Is Proposed

The draft law defines family entrepreneurship as a type of economic activity carried out by members of the same family to achieve social and economic outcomes and/or generate profit.

Two possible formats are предусмотрены:

• establishment of a legal entity (family enterprise);
• operation as an individual entrepreneur.

Such businesses would be created based on a formal agreement or declaration among family members.

Participation would be open to family members of the first and second degree of kinship aged 14 and older.

Key Conditions and Restrictions

The proposal sets several requirements:

• total number of participants (including employees) must not exceed 10;
• the number of hired employees cannot exceed the number of family members involved;
• employees may be hired under standard labor contracts with full social protection.

At the same time, certain activities would be prohibited, particularly those related to excisable goods and wholesale trade.

Taxation and Social Aspects

The draft law suggests applying a simplified taxation system to family businesses in order to reduce administrative burden.

However, experts warn of potential risks. In particular, voluntary participation in social insurance schemes could negatively affect pension entitlements and overall social protection of participants.

Expert Concerns

The Parliament’s expert body has identified several gaps in the draft law:

• lack of clear regulation of property relations;
• inconsistencies regarding the minimum number of participants;
• potential conflicts with existing social insurance legislation.

Additionally, the Ministry of Finance has expressed reservations about granting automatic access to simplified taxation.