In recent years a large number of firms and companies owned by citizens of other states has opened in Ukraine. Great market and a small number of competitors in certain areas make Ukraine attractive to start their own business. Some foreign companies open their branches, successfully work and bring good profits to owners and employees.
Under current Ukrainian legislation, foreign citizens, as well as residents, have the right to conduct business in Ukraine. However, there are certain nuances of the law, relating to starting a business and its registration in Ukraine.
Hence, citizens of other countries who plan to start their business in Ukraine, should take into account the peculiarities of employment of foreigners in Ukraine:
- To open a firm, company (LLC, etc.) a foreign citizen must obtain an individual tax ID number. This number is unique, and is reserved for the taxpayer throughout life. Tax ID number is compulsory for conducting business in Ukraine.
- To make foreign citizen’s work in Ukraine official and legally, he must get a work permit. Only after obtaining a work permit, foreigner may become an official director of his firm.
- If the foreign citizen is also the founder of the LLC and its leader (CEO), he cannot apply for a work permit personally, as such documents may be filed only on behalf of a registered legal entity (as an employer). In this case, the head of LLC may be appointed among citizens of Ukraine. For example, a representative of law firm may be a temporal CEO of the company. Then this person can be fired, after the foreigner (a business owner) had received an official work permit. This permit entitles him to lead his company personally.
- An important nuance for foreigners opening their own business in Ukraine is the fact that if the share capital of the company would amount to not less than 100 000 USD (as a foreign investment), the company owner has grounds for obtaining a permanent residence permit in Ukraine.
To register his own company in Ukraine, the foreign citizen must submit a set of documents. These documents differ depending whether the company is founded by an individual, or by a legal entity.
When the individual registers business, the foreigner must submit the following documents:
- copy of the passport of the founder;
- a copy of the tax ID number;
- list of proposed types of activities;
- contact details of the foreigner;
- notarized power of attorney for registration documents and the signing of the charter for the legal entity.
- copy of passport and a copy of tax ID number of the Director of Chief Accountant;
- a copy of the statute of non-resident legal entity (copy must be notarized);
- a copy of the document confirming registration (copy also must be notarized);
- a copy of the document certifying authority of an official (notarized);
- notarized power of attorney for the right of signing statutory documents and performing other actions on incorporation;
- document confirming the location of legal entity.
1. For whom is it better to register LLC in Ukraine: on the name of expat as an individual or for a foreign legal entity?
Choosing this item affects the cost of registration and the complexity of the procedure. After all, if an enterprise is registered by an alien-individual, then it is enough for an alien to receive an identification code of Ukraine. If a legal entity registered by another foreign legal entity is registered, then a much wider list of documents is required (certificate or extract about registration of a foreign legal entity, sometimes if the person who is authorized to represent the company is also not required to have a power of attorney). And all of these documents must be apostilled or legalized additionally if they are from the country that so requests.
2. Does foreigner need to be present when registering a business in Ukraine?
It is indispensable that a company can also be registered under a power of attorney. But to register, you need other things – the registration address, the director. Without this it is impossible to register a business in Ukraine.
3. Is there a restriction on the foreigner being a founder or director in Ukraine?
Foreigners can be founders of enterprises without restrictions. The director can be only after receiving a work permit.
4. Can an enterprise established by a foreigner be a single tax?
Only if it is founded by an alien-individual. If it is a legal entity, then it can not.
All the documents are to be translated and (depending on country) apostilled or legalized. Certainly, they must be translated into Ukrainian, and signature of the interpreter must be notarized.
Attorneys at law “Bachynskyy, Kolomiets and partners” provides the full specter of legal services connected with registration of foreign business and prescribed above. Contact us, our lawyers will be glad to help you!