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Some issues of employment of foreigners in Ukraine

Active development of information technologies, tax preferences, availability of science and technology base give a possibility for Ukrainian business entities to offer a job for programmers from other countries. In that connection, the heads of enterprises are interested in particularities of employment of non-resident natural persons in Ukraine.

Inviting the foreign specialists practically always is connected with production necessity. Therefore the main point at employment of non-residents is connected with defining the period of foreigner’s stay in Ukraine. As a rule, highly-skilled staff is invited for a long period of time, which influences the registration of documents required for employment.

The main normative legal document regulating the non-residents' stay in Ukraine is the resolution of the Cabinet of Ministers of Ukraine «The matters of issue, prolongation and cancellation of permit for use the labor of foreigners and persons without citizenship” No. 437 dated 27.05.2013. A business entity that plans employing a foreigner should get for a non-resident the permission for work in Ukraine which is issued by the Employment Center. It should be taken into consideration that this permission will be given only in case a foreign specialist has qualification and skills that Ukrainian programmers do not have. Besides that, to get permission for work, the required package of documents should be prepared, depending on the type of employment (for example, taking on a refugee for work or employment within the scope of foreign economic agreement). Availability of medical insurance certificate is compulsory.

After registration of permission, to invite a specialist, the matter of getting residence permit should be solved. This document allows a non-resident staying in the territory of Ukraine for a long period of time. Mostly that is the period of validity of labor permit.

For foreign citizens and persons without citizenship, registration of temporary and permanent residence permit is provided by the Law of Ukraine.

Practice has shown that in case a hired non-resident does not plan applying for Ukrainian citizenship in future, registration of temporary residence permit is the most reasonable. As a rule, it is issued for the period of validity of the employment permission.

Getting permanent residence permit is practiced at prospects of long-term cooperation with a foreign citizen for whom getting a status of resident of Ukraine is gainful. Advantage of permanent residence permit is connected with the fact that at further employment, for example at some other enterprise, there is no need to register work permission at the Employment Center.

An important point: using foreign citizens’ labor without the due permission is punished with a fine in amount of 20 minimal salaries.

Taking on a foreign citizen for work is performed in accordance with the Labor Code of Ukraine. As a rule, a contract or a labor agreement is concluded with a foreign specialist. Another type of registration of arrangements with a non-resident is a legal agreement which should not contain signs of labor relations.

Special attention should be paid to the fact that a business entity which took on a foreigner for work and pays him salary or other remuneration (for example, under a civil law contract) is a tax agent regarding the non-resident. According to sub-clause 170.10.3 of the Tax Code of Ukraine, when making a contract with a foreigner, where the terms and conditions provide non-resident’s getting income in Ukraine, the Ukrainian business entity should state in the contract a tax rate which will be applied to that income.

According to sub-clause 170.10.1, the income paid in Ukraine in favor of non-residents is subject to tax under the rules and rates defined for residents. The standard rate of personal income tax at present is 15% of income.

In the personal income tax accounting which is to be provided to the tax authorities, that information about the working foreigners is specified separately in a single line.

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