Background: Major depressive disorder (MDD) is one of the most prevalent mental illnesses associated with impairments in different spheres of functioning. Cognitive deficits are currently investigated as a possible factor of functional decline. We aimed: 1) to assess the influence of cognitive domains among other MDD symptoms on functional impairment; 2) to compare effects of eight weeks` vortioxetine versus escitalopram treatments on cognitions and consequent influence on various domains of functioning. Methods: At baseline, 119 MDD (according to DSM-5, MADRS >= 7) patients and 71 healthy controls completed neurocognitive tests (RAVLT, TMT-B, DSST) and Sheehan Disability Scale. After 8 weeks of vortioxetine/escitalopram treatment, 56 patients had repeated clinical and neuropsychological evaluations. Linear regression analyses were performed to find significant predictors of impairment (at baseline) and improvement (after treatment) of functioning. Differences between groups after treatment were analyzed using mixed models for repeated measurements. Results: Cognitive impairments predominantly affected social functioning and were crucial for working productivity and total functioning along with anhedonia, hypothymia. Working memory disturbances impaired all aspects of functioning. Executive dysfunction made an additional contribution to workplace performance disturbances. At week 8, vortioxetine compared with escitalopram greater improved all impaired cognitive parameters and aspects of functioning and had higher remission rates. Cognitive improvement was the most significant factor for total functioning recovery and among crucial contributors to workplace performance recovery. Limitations: No placebo group. Conclusion: Cognitions play a key role in social, working, overall functioning in Ukrainian MDD patients. Compared to escitalopram, vortioxetine treatment greater improves all cognitive and functioning domains, which leads to higher remission rates.