Is it necessary to apostille copies of foreigners' passports when registering an LLC?

The procedure for registering an LLC in Ukraine in 2023 has gradually regained its pre-war momentum across most of the country, in stark contrast to the initial months of 2022 following the extensive invasion. The early days were marked by overwhelming queues at administrative service centers that persisted in some areas until June. Power outages and restricted access to registries added to the complexities faced during that period.

However, establishing a company in Ukraine is no easy feat for foreigners seeking to contribute to the country's economy. 

While it may be possible to find reasonably good examples of founding documents online, there are crucial considerations, particularly for non-Ukrainian citizens taking on leadership roles. Such individuals, alongside foreign founders, must first acquire a Tax Identification Number. Additionally, the director will need to obtain a work permit.

In this article, our primary focus revolves around the beneficiaries of an LLC in Ukraine. For foreign individuals, the question arises: is apostilling their documents necessary? To shed light on this matter, we will delve into the newly enacted legislative provisions.

For specific guidance on establishing a business in Ukraine, we encourage you to refer to our previous materials. 

Detailed information regarding the requirements for obtaining a work permit can be found here.

If you are currently interested in registering a company in Ukraine and prefer professional assistance or wish to ensure that the LLC's structure aligns with your specific needs, our team of specialists is readily available to provide their expertise

Challenges in Registering an LLC in 2023: What to Expect

Discrepancies between the Law and Practice.

While the law technically allows for the electronic signature of the submitting party to authenticate a copy of the ultimate beneficiary's passport, this approach proves to be highly problematic in practice. Notarization remains the simpler option. Furthermore, this requirement only applies to copies of passports belonging to Ukrainian citizens, not foreigners.

Ambiguity in Certain Provisions of the New Law.

Such vagueness allows both registrars themselves and notaries performing registrar functions to interpret the law in a manner that is easier, more advantageous, or clearer to them individually.

It is stipulated that a copy of an identity document confirming citizenship (nationality) must be provided, either notarized or certified by a person authorized to submit documents for state registration of a legal entity, if such a document is issued without using the resources of the Unified State Demographic Register — for Ukrainian citizens.

For instance, ask several different notaries and registrars how a foreigner's passport copy should be submitted, and you will likely receive varied responses. Most often, the answer will involve notarization in the country of residence, apostille (legalization), and translation into Ukrainian.

"Why apostille a passport copy if the law doesn't specifically require it?" you may ask. The reason is that there are general requirements for certifying foreign documents. However, not all private notaries share this viewpoint.

Nevertheless, we recommend our clients to apostille passport copies of beneficiaries whenever possible. It's better to err on the side of caution than encounter problems during the registration process.

You may also like: LLC Registration at the Founder's Place of Residence in Ukraine

Difficulty in Providing Notarized Copies of Passports for One of the Beneficiaries

Such a situation can indeed occur, especially when there is no communication with one of the beneficiaries who is unwilling to provide the necessary documents. Here's a practical example: let's say the LLC is founded by another LLC, and the founder of that LLC happens to be a foreign legal entity.

Ultimate beneficiaries are considered individuals who own 25% or more of the voting rights/shares. However, there may be cases where a particular beneficiary, who holds a 25% stake in the very last entity in the chain, sees no need to share their passport information with anyone. As a result, the document package remains incomplete.

There are various ways to address this issue, and each situation requires an individual approach. However, if the analysis and examination reveal that a passport copy is absolutely necessary, this information will be identified during the preparation phase rather than discovering it later when most of the documents are already notarized and ready, with only a few steps remaining before submission. Taking this proactive approach helps prevent unnecessary expenses.

That's why we conduct a thorough legal analysis of our clients' situations when preparing documents for LLC registration in Ukraine. It is crucial to identify potential risks in advance and take appropriate measures to mitigate them.

You may also like: Registering a Legal Entity: How to Register Your Business in Ukraine as a Foreigner?

Who are the ultimate beneficial owners and what is required from clients when registering an LLC?

Ultimate beneficial owners are individuals who have significant influence or control over a business entity's operations. For legal entities, this refers to individuals who hold decisive power over the entity, including through control or ownership chains.

To accurately reflect the ownership structure, our legal team will need the registration document of the foreign legal entity if it serves as the founding entity.

If all founders are Ukrainians (Ukrainian legal entities), we will identify this through the registries ourselves.

For Ukrainian citizens with older-style passports, a notarized copy of the passport is required. Those with the new plastic passport can provide a scanned photo.

As mentioned earlier, foreign citizens will need notarized and apostilled/legalized copies of their passports, depending on their country of origin.

However, if you are reading this article and planning to seek assistance with LLC registration, there is no need to take any action in advance. Our team will provide comprehensive guidance on how to best navigate the process. With our expertise, we will:

• Assist you in establishing an LLC seamlessly.
• Provide a temporary director, if necessary, along with a legal address.
• Handle the disclosure of beneficial owners, ensuring smooth interactions with Ukrainian government authorities.

The cost of LLC registration in Ukraine.

The cost of planning and registering a foreign business on a turnkey basis.

Contact us for a reliable and secure solution to your legal needs in Ukraine.