What to choose: accreditation of a representative office or registration of an NGO in Ukraine?

Are you a foreign non-profit organization or a charitable foundation? Planning to commence operations in Ukraine? You will immediately face several options for achieving your goal. The first decision you'll encounter is whether to establish a Ukrainian charitable foundation/non-governmental organization or open a representative office. In Ukraine, these are distinct legal forms for the activities of foreign non-profit organizations.

Interestingly, you are not limited to these options alone for implementing specific projects or undertaking certain actions in Ukraine. Today, we will explore the most common and practical ones. We will also delve into situations where registering a Ukrainian organization is the preferred choice and when establishing a representative office is more suitable.

Option 1: Delegating Authority to a Representative

This option can be useful if the organization is not interested in maintaining an office in Ukraine or if there are no significant ongoing projects. It is suitable for specific representative actions. For instance, if your organization plans not for continuous operations but to conduct an event in Ukraine or participate in a specific activity.

For example, an international non-profit organization approached us, recommended by our client, with the goal of participating in a specific event in Kyiv. We provided consultation, prepared the necessary authorizations for a representative, liaised with the event organizers, and included the representative in the lists. While such cases are not very common, granting powers of attorney for specific actions is a feasible approach.

Option 2: Entering into an Appropriate Agreement

The right to representation can also arise from a contract. This means that we also consider this option for episodic non-profit activities in Ukraine. Interestingly, such options can be used prior to officially starting operations, serving as an introduction to Ukraine.

For instance, according to the agreement, a law firm provided legal services to a foreign organization, or another non-profit organization executed a specific action, implemented a grant program, or provided charitable aid to end recipients. In this scenario, the non-profit organization carries out specific projects in Ukraine, involving other organizations.

Option 3: Collaborating with Another Established Organization in Ukraine

For instance, organizations unable to independently establish an office in Ukraine or maintain personnel may offer financial or material support to other entities for project implementation in the country. 

This approach is particularly favored by non-profit organizations engaged in humanitarian or charitable endeavors. As an illustration, one of our clients channels aid into Ukraine, procured using both their own resources and contributions from other organizations in their home country.

Option 4: Establishing a Representative Office for a Foreign Non-Profit Organization in Ukraine

To manage projects necessitating direct coordination, oversight, and the creation of a dedicated organizational "hub" in Ukraine, foreign non-profit entities establish distinct entities in the country—representations or branches of foreign charitable organizations (commonly termed "Representations" in practice). This mode of representation for foreign organizations is notably prevalent in Ukraine.

In our professional experience, clients occasionally seek accreditation for their representations. We navigate the accreditation process through the Ministry of Justice, adhering to stipulated legal procedures.

For example, we recently facilitated the accreditation process for a German non-governmental organization. Our legal team consulted the client, compiled documents, and completed the accreditation proceedings.

Option 5: Establishing a Non-Profit Organization in Ukraine

In addition to creating a representation, a foreign non-governmental organization, if in compliance with the registration legislation, can register a charitable organization in Ukraine to conduct its activities through this entity. This is also a prevalent method of incorporation in Ukraine, offering distinct advantages, which we will discuss further.

Apart from the aforementioned options, there are other, less common forms of incorporation. However, we will focus your attention on operational and effective mechanisms or their combinations.

You may also like: How to Prepare a Charitable Foundation to Receive Assistance from Abroad?

Comparative Characteristics of a Foundation and Representation (Table)

In the case of implementing specific projects and having an active presence in Ukraine, the most popular options for foreigners are the accreditation of a separate unit of the organization, the establishment of a representative office, and the registration of a charitable organization. Below is a brief comparative table for a general understanding.

When is it best to register a charitable company?

n practice, it's advisable to register a charitable organization when:

• The organization intends to carry out charitable activities in compliance with Ukrainian legislation.
• Swift registration is necessary.
• A legal entity specifically in Ukraine is required.
• Non-profit status needs to be obtained.

In our practice, we've assisted numerous clients in establishing charitable organizations in Ukraine on behalf of foreign charitable entities. For instance, a German charitable organization recently approached us to establish a charitable foundation in Ukraine for implementing humanitarian projects. We created the foundation, obtained non-profit status, acquired permits for employing foreign workers, and currently provide legal support to the foundation.

For more detailed information on servicing charitable organizations, click here.

When is it best to register a charitable company?

Accrediting a Representative Office is advisable in cases where a foreign non-governmental organization needs to be personally represented in Ukraine through its Representative Office, establish a corresponding Rep. Office, hire employees, and volunteers. For instance, we recently facilitated the accreditation of a representative office for a non-profit organization associated with a church in Ukraine. We conducted meetings, finalized details, prepared documents, and successfully accredited the organization.

From our experience, many organizations combine multiple approaches, establishing a charitable organization while simultaneously accrediting a representative office. This approach allows leveraging the advantages of both forms, resulting in more effective operations in Ukraine.

If you are seeking the optimal approach for the activities of your non-profit institution but are uncertain or overwhelmed by the choice of form, feel free to reach out to us. Our extensive experience in this legal field enables us to provide efficient solutions in a short period.

The cost of registering a charitable foundation

The cost of registering a non-governmental organization

The cost of accrediting a foreign non-profit organization

We offer legal and accounting services for non-profit activities in Ukraine.