In Ukraine, there is a significant wave of closures among individual entrepreneurs. What is driving this trend?

Analysts from Opendatabot report this.

Reasons for the Closure of Individual Entrepreneurs

It was noted that in January, immediately after the state registries resumed their operations following a long pause, 61,455 individual entrepreneurs ceased their activities. This is three times the number that was opened during the same period.

The primary reason that drove entrepreneurs to shut down their businesses was the increase in tax burdens. Specifically, 27% of the 32,000 surveyed entrepreneurs stated that they plan to liquidate their businesses in the near future. More than half of these respondents explained that the new taxes have become unbearable for small businesses. Other significant factors included:

• decreased purchasing power of Ukrainians;
• issues with product supplies;
• military mobilization.

Moreover, the highest number of new individual entrepreneurs during the war emerged in Kyiv (108,536), Dnipropetrovsk (68,377), and Lviv (60,009) regions. At the same time, areas closer to combat operations are experiencing a notable decline in business activity.

Previously, we explained whether entrepreneurs who close their individual entrepreneurship in 2025 can return to the simplified tax system. The opportunity to operate under the "single tax" regime is available only once a year.

We also discussed that almost all individual entrepreneurs must use RRO in their operations. However, some business owners may disregard this rule.