What do Belarusian IT companies need to know about relocation to Ukraine?
Having set a course to create a favorable economic environment for IT companies, Ukraine has provided an opportunity to actively develop not only Ukrainian IT companies, but also foreign businesses coming to Ukraine.
Due to the situation in the world and favorable conditions for IT companies in Ukraine, in the last year we received numerous requests for assistance in relocating businesses from Belarus, including IT, to Ukraine. The key reasons for business relocation are low tax rates for this type of business activity, as well as special attitude of the migration legislation to IT specialists.
Today we will tell you whether it is possible and whether it is profitable to relocate your company to Ukraine.
If you want to get answers about your specific situation, please contact our experts for a personal consultation.
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Relocating your IT company to Ukraine: Where to start?
Let’s consider the most frequent and most convenient option of company relocation to Ukraine — through the establishment of a Ukrainian company.
Of course, there are other options — the relocation method will depend on your situation and plans.
If we are talking about starting an IT-company in Ukraine with foreign employees, the algorithm of actions will be as follows:
Stage 1. Registration of IT-company in Ukraine.
Registration of a company can be completed in just a few days. The registration of an LLC requires the personal presence of the founding members, or their representatives.
During the registration procedure, it is worth paying special attention to the Articles of Association, which may prescribe the structure of the company, the powers of the director and much more.
Please note! If you also want a foreign employee to be the director of the company, this will have to be done in three stages:
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Registration of a company with a Ukrainian director (this can be a nominee director, we offer this service);
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Obtaining a Work Permit for a foreign director;
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Replacing a Ukrainian director with a foreign employee.
The thing is that when registering a company, one has to indicate its director, and a foreigner can take this position only after obtaining a Work Permit, which in turn is possible only after the registration of the LLC is completed.
Stage 2. Obtaining a Work Permit for employees, including the top management of the company.
Upon completion of the LLC registration procedure, we may submit an application for a Work Permit for the employees and director. Such a request must be submitted on behalf of the employer, and the Permit is issued for a specific person and for a specific position.
The peculiarities of employment of foreign IT specialists is that they can apply for a Temporary Residence Permit for 3 years (a maximum established period), with the possibility of extension. In addition, no minimum wage is set for this category of employees.
A Work Permit can be obtained within 5-7 business days provided that the procedure is properly arranged. We can get Permits for a large number of employees at once.
Stage 3. Employment of all foreigners.
Each employee must obtain a Tax Identification Number (TIN) — a personal tax identification number. The employment agreement must specify this personal tax identification number.
The employment agreement must be signed within 90 days from the moment of obtaining the TIN for the employee. Within the following 10 days a certified copy of the agreement must be submitted to the Employment Center. If you fail to submit it in due time, the Work Permit will be revoked.
Of course, you will also need to arrange the workplace — to find an office, to develop the mode of work, to organize the necessary work resources. All this requires a lot of attention and energy. In such a situation, a professional team of lawyers, handling all the legal formalities for registering a business and employing workers, will stand in good stead.
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How can IT specialists stay in Ukraine all the time?
Registering a company in Ukraine and employment of foreigners is only part of the relocation process. If you are ready to move to Ukraine with your project, you will have to think about the issue of legalizing the stay of IT-specialists in the country.
In our practice, there were cases when the employer was only responsible for Work Permits and employment. But often in the process of relocation, the employer also takes care of obtaining a Temporary Residence Permit, Permanent Residence Permit, or other permits allowing its employees to stay in the country. They pay the cost of obtaining the necessary documents themselves, or divide the payment into agreed parts with the employee.
Please note! Employment of a foreigner and getting a Work Permit for such an employee does not mean that now the employee can safely stay in Ukraine without going abroad. Without having a Temporary Residence Permit or a Permanent Residence Permit, an employee will have to leave after the expiry of the period allowed to stay in Ukraine (usually 90 days).
However, it’s worth noting that a Work Permit is the basis for obtaining a Temporary Residence Permit in Ukraine, and the IT profession enables a foreigner to get Permanent Residence Permit in Ukraine within the quota for IT specialists. What is better to choose?
Temporary Residence Permit for an IT-specialist in Ukraine.
Obtaining a residence permit on the basis of the Work Permit is a standard procedure, and the most logical choice.
Advantages:
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Faster legalization procedure — all the preparatory work can be done by our lawyers, and the procedure of obtaining a Temporary Residence Permit can be completed in just 1 month from the date of receipt of the Work Permit;
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Easier legalization procedure in Ukraine — obtaining a Temporary Residence Permit requires fewer documents. The list can be seen here.
Disadvantages:
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The Temporary Residence Permit is tied to the place of work. When you change your place of work, you lose the basis used to obtain a Temporary Residence Permit — you need to re-apply for a Work Permit and a Temporary Residence Permit;
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A shorter validity period. The maximum validity period of a Temporary Residence Permit on the basis of employment is 3 years, with the possibility of extension.
We wrote in detail about the procedure for obtaining a Temporary Residence Permit in Ukraine for residents of Belarus here.
Permanent Residence Permit for an IT-specialist in Ukraine.
Usually, when employing a foreigner, it is seldom possible to get a Permanent Residence Permit at once. This requires a good reason. But at present, Ukraine is on the way to the development of IT-industry and creates a favorable environment for IT-companies in the country. It offers not only tax optimization, but also allocates IT-specialists in a separate category of workers who can obtain a Permanent Residence Permit in Ukraine within a quota.
Getting a Permanent Residence Permit within a quota means that every year a certain number of IT-specialists may obtain a Permanent Residence Permit in the country. In 2021, Ukrainian companies are allowed to employ 5,706 highly qualified foreign professionals within the quota.
Advantages:
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This permit is issued for a long time — for 1o years;
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This permit gives the right to get employed in Ukraine without a Work Permit;
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All travelling visas can be obtained in Ukraine.
Disadvantages:
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An IT-specialist must meet certain requirements, otherwise they will not get a Permanent Residence Permit. See these requirements here;
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Quotas means a finite number of permits that the state can give — you can miss the quota for the year;
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The long procedure — in contrast to the Temporary Residence Permit, the procedure for obtaining a Permanent Residence Permit will take 1 year from the date of filing. During the waiting period, at the end of the authorized period of stay, you will have to go abroad.
The employee legalization procedure will depend on your plans and the employee’s personal choice. We will analyze the overall situation and suggest the best option for both sides.
Our company offers you a full range of services for successful relocation of IT-business to Ukraine:
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Consultation on the possibility of relocation of employees and the whole business to Ukraine;
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Business setup consulting in Ukraine: LLC, sole proprietorship or representative office;
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Registration of the desired type of company for doing business in Ukraine;
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Obtaining Work Permits for foreign specialists in Ukraine;
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Assistance in obtaining a Temporary Residence Permit or a Permanent Residence Permit in Ukraine for IT specialists, if required;
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Business tax consulting in Ukraine;
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Accounting support, solving personnel issues (salaries, vacation pay, hiring, etc.).
Check the cost of obtaining a Work Permit for a foreign employee here.
Check the cost of obtaining a Permanent Residence Permit for IT-specialists here.
Check the cost of legal services for IT companies in Ukraine here.
Do you want to transfer or start your own IT business in Ukraine? Don’t hesitate to contact us! You will get all services you need in one place — reliably, easily and safely.
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