A foreign company is setting up a business in Ukraine: will it be possible to employ a great number of non-residents?
For foreign legal entities that are planning to enter into Ukrainian market, there are two ways to do this:
- open a representative office here;
- register a legal entity where a foreign company will be its founder.
Question: which of the options will be the best?
The answer: there is no perfect option for everyone. You just need to focus on your needs, scope and types of work to be performed in Ukraine.
Today we will focus on the option of a representative office and will go over the opportunities, which it has for entering into Ukrainian market, and will also discuss how to involve non-residents wt the performance of work in a representative office.
The advantages of a representative office as an option for operating a business in Ukraine
Impossibility of illegal takeover. The representative office is not a legal entity and is fully controlled by the parent company.
The head of a representative office operates exclusively on the basis of the power of attorney from the foreign company. Such power of attorney must be notarized, and in some cases apostilled or legalized (depending on the country where the parent company is registered). Therefore, to make or forge such a power of attorney in Ukraine is virtually impossible, and even if someone tries to do it, an expert examination will easily reveal forgery.
The possibility of getting a license. It was not until fairly recently that, the inability to get a license was among the challenges of a representative office. That is, if the type of business that you would like to operate is being licensed in Ukraine, then opening a representative office would not satisfy the needs of a foreign company in terms of entering into Ukrainian market.
This was due to the fact that the Law of Ukraine "On licensing certain types of economic activity” defines the concept of a licensee as a business entity, which has received a license to engage in a certain type of economic activity. And a business entity, in turn, was defined as a legal entity registered in the established manner or a sole trader. Since representative offices are not legal entities, they do not fall under this definition.
The new law is not bound to legal entities. Therefore, representation offices have got the green light in the field of licensing.
Now perhaps the most popular of the licenses, received by representation offices of foreign companies, is a license for construction work
Article on the topic: Construction license: procedure for obtaining, problem points, practical experience
A license provides an opportunity to participate in tenders. However, it is worth noting that there is a certain number of qualified personell mentioned in the requirements for persons participating in a tender.
This is where the company is faced with the question of whether to hire qualified personnel in Ukraine or to involve their own? If the choice falls on the latter option, then you first need to get work cards for all foreigners.
How to get a work card for a foreigner in Ukraine?
A work card will allow you to legally work in Ukraine and will eliminate the need to get a work permit.
The registration procedure takes three weeks, and a minimum set of documents is to be submitted to get it:
- A copy of the registration certificate of the representative office;
- A list of foreign employees;
- two photos for each employee;
- A power of attorney.
But if the number of foreign employees exceeds three people, then the Ministry of Economic Development of Ukraine requires a written justification for the need to involve those specific individuals for whom work cards are going to be obtained.
A special higher education degree or other proof of qualification (for example, work experience) in the very field of the representative office’s line of business are among valid reasons for involving them specifically. As practice shows, it is impossible to get more than three service cards for workers performing unskilled work.
What to do if you want to hire foreign personnel in the amount of more than three people, but you cannot get work cards for all?
In this case, you may need your own legal entity registered in Ukraine. For the employment of all foreigners you will need to get work permits.
In terms of duration, this procedure is not going to take longer than getting work cards. And there is no need to get the qualifications of the personnel confirmed, which is one of the advantages of this option.
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