- 1 Real estate purchase: is it a ground for permanent residence permit?
A foreign citizen is entitled to get a permanent residence permit in Ukraine on the ground of investment.
Migrants from other countries are eligible for a permanent residence permit if they meet the requirements of the Law of Ukraine “On Legal Status of Foreigners and Stateless Persons”. Most often these categories include people who are in close or distant kinship with the citizens of Ukraine or are married to citizens of Ukraine.
Besides, the following categories of people have a right to permanent residence permit:
- People who have significant achievements in various fields of culture or science and may promote further cultural, scientific and educational development of Ukraine.
- Highly-qualified specialists whose activities and achievements are needed by Ukraine.
- 3. Persons who had been Ukrainian citizens before but lost their citizenship.
- Victims of human trafficking.
One more ground is investment into Ukrainian economy in the sum of $100 000. The Law of Ukraine “On immigration” foresees forms and types of investment. It is to be made in the order prescribed by current legislation and Cabinet of Ministers of Ukraine.
Foreign investment must meet certain requirements in order it is considered a contribution to the state’s economy.
- It must be made in the form prescribed by the Law of Ukraine “On foreign investment regime”
- The amount of investment must be not less than $ 100 000
- The investment can be made in UAH (hryvnias) or other freely convertible currency
- The investment must be made into Ukrainian economy. That means, a simple purchase of an apartment in Ukraine is not considered to be investment
- Your money is to be of legal origin
- The investment is to be confirmed by certain bank receipts and other documents
The answer is – no, it isn’t.
We have already mentioned, one of the requirements is that the investment must finance Ukrainian economics. Purchase of real estate is just a personal need of a person.
The most widespread form of investment is a company establishment. Opening a firm (LLC, as usual) by non-resident means that the founder will form a share capital, and will put money into company’s bank account.
If you still want to buy real estate, you can do it on behalf of the company. In such case it will be a ground for permanent residency, but one should keep in mind. This real estate is considered to be the company’s property. You are free to use this dwelling however you want – live there or rent it to third persons.
If you decide to get a permanent residence permit on the ground of investment you should keep in mind:
- Consideration of your documents for permanent residence permit can last up to 1 year. During this period you can legalize your stay in Ukraine by getting temporary residence permit. The most widespread ground is to be appointed as a CEO of the company you had set in Ukraine, get a work permit and then obtain temporary residence permit on the ground of employment. Temporary residence permit is valid for 1 year – during this year the issue of your permanent residency will be solved.
- If you wish to buy an apartment (or other real estate), it should be done as soon as possible in order to avoid exchange rate jump. One can also save money when buying apartments at construction stage, as in this case real estate is 25-30% cheaper.
- If you are not going to provide business activities, the company can be liquidated. But of course, the liquidation must be held after receiving permanent residence permit. Liquidation procedure will take several months. All company’s property will become the property of a single shareholder.
Thus, the plan is:
- Registration of a company (Limited liability company is the best solution). Non-resident will be the founder of the company. If you are going to buy real estate it is required to enumerate ‘operations with real estate’ as one of the types of your business activity.
- Share capital forming. The sum must be not less than $100 000 and is to be paid from the founder’s personal bank account.
- Recently there was a state registration of foreign investments. Nowadays the procedure is cancelled, but investors still need confirmation of payment from bank institutions.
- Obtaining work permit as a CEO of Ukrainian company and getting temporary residence permit on this ground.
- Submitting documents for permanent residence permit and waiting.
One should notice the company must pay taxes including:
- Profit tax;
- Tax on individual income;
- Single Social Tax from the salary of the CEO of the company;
- Real estate tax – if the area of your apartment is more than 60 sq. meters.
Upon liquidation of the company and transferring its assets to a founder (shareholder), the following taxes are also paid:
- Tax on individual income. This tax is not payable if the value of the assets transferred, is less than the share that had been put by the shareholder into the share capital of the company.
- Profit tax for the company (if a separate legal entity is a founder or shareholder). It is also not payable if the value of the assets transferred is less than the amount of share in the share capital.
– Buying real estate is a ground for permanent residence, isn’t it?
Not really. Only investing 100 000$ in a form of money and only to company authorized capital is a ground for permanent residence.
– Are those money invested to company blocked?
No, money invested to company may be used by company without limitations, including buying real-estate.
– How money 100 000$ should be invested?
Money may be paid only by 2 ways: a) in cash via bank cashier, if the foreigner (investor) has Custom declaration for those money; 2) via bank transfer from personal bank account of investor to bank account of company.
As a rule, the whole procedure of obtaining permanent residence permit on the ground of investment from A to Z lasts 6-12 months. Any mistake in your documents may cause problems and applicant will not get the permit.
Attorneys at law “Bachynskyy, Kolomiets and partners” are always ready to help you with:
- Business registration in Ukraine;
- Foreign investment registration;
- Obtaining work permits for CEO of your company or your employees;
- Submitting documents for temporary and permanent residence permits;
- legal accompaniment of business;
- real estate purchase in Ukraine;
- liquidation of Ukrainian company (if needed).