The determining factor in the ability of the united territorial communities to self-development is entrepreneurial activity. In the conditions of the reform of local self-government and territorial organization of the government, the business sector needs incentives for development. Today, the country, especially the countryside, loses its labor resources at a high pace. Achievement of welfare of the population and creation of powerful communities is impossible without the development of entrepreneurial activity, in particular youth. Entrepreneurship development will help increase local budgets, expand industrial and social infrastructure and reduce migratory flows of the able-bodied population. In the article investigated the role of entrepreneurial activity for the development of the unified territorial communities. Identified key problems and obstacles for the formation and development of entrepreneurship. The analyzed business potential of Lviv region and its influence on the creation of the unified territorial communities. It is established that in the areas with the lowest wages created the largest territorial communities. In order to determine the potential of entrepreneurial activity, community rankings on the density of population and regions of Lviv region by the share of young people, the profitability of enterprises and their financial result was carried out. The rapid decrease of enterprises in the Lviv region was revealed, which testifies to a number of problems of socio-economic and political character. Among the main causes is the under-utilization of the potential of the region’s development, the shortage of personnel due to proximity to the border and high labor migration of the population, the lack of tools for financial support for small businesses and the complexity of access to funds for its development, lack of information support entrepreneurs, complex procedures for connecting to electricity and obtaining permits, improper condition of transport infrastructure, lack of consolidated information on land and premises that can be used atm doing business. The considerable labour potential of the Lviv region for the development of youth entrepreneurship, in particular, in Yavoriv, Zolochiv and Zhovkva regions, was revealed. The smallest proportion of young people is observed in the mountainous regions of the region due to the highest level of migration of young people abroad and to large cities. The directions of formation and development of youth entrepreneurship in communities are offered. Among financial instruments for stimulating the development of united territorial communities, a significant proportion of infrastructure and social subventions is aimed at the development of entrepreneurship, in particular, youth.