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Individual Entrepreneur (ФОП) or LLC (ТОВ) in 2026: How to Choose the Right Structure for Your Business
An analysis of the strengths and weaknesses of each form, common mistakes when choosing one, and scenarios when it makes sense to switch.
7 min read
The short answer
There is no single right answer — it depends on your business model.
Sole Proprietor (FOP)
- Simple accounting and a lower tax burden for small turnovers.
- Flexibility. – Limits on turnover and types of activities. – Does not scale for teams with raised capital.
LLC (TOV)
- Suitable for a team of co-founders and attracting investments.
- Flexible corporate structure. – More complex accounting and a higher administrative burden.
When it's time to change your business structure
- Consistently exceeding FOP limits.
- The addition of co-founders.
- Working with large corporate clients.
What's next
Evaluate the transition scenario with a lawyer and a tax consultant — this will help you avoid the most costly mistakes.
