What account should be opened with a foreign representative office in Ukraine?
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Starting a foreign representative office (RO) is one of the options for entering the Ukrainian market and conducting business activities here. In fact, a representative office is an officially registered place of business of a foreign company in Ukraine. Representative offices allow you advertise your brand, test the market or already perform/provide certain services and goods.
Despite the fact that the representative office is not a legal entity and a foreign company is now registered with the tax authorities, rather than a representative office, as it was before, the RO still must undergo certain registration procedures and meet the requirements of the law.
Thus, a representative office must have an address, an organized accounting system, management personnel meeting the requirements and an account in a Ukrainian bank. Today, we will focus on the opening of an account for a representative office and cash flows in it. To learn more about the RO registration procedure, please click here.
Please note! Registration of a representative office is not always the best option, despite all the advantages of this way of entering the market. Look at the comparative table of a representative office and LLC in Ukraine in order to understand the difference between them. If you do not know which business structure will be more profitable for you - please contact our lawyers for recommendations.
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How to open an account for a foreign representative office in Ukraine?
Opening of an account in a Ukrainian bank is an obligatory stage of the representative office registration procedure. Moreover, the bank account must be opened for both commercial and non-commercial representative offices, but in the latter case the account cannot be used for any revenue.
To open an account, the head of a representative office must personally visit the bank - he/she must have a passport and a power of attorney, which confirms his/her authority as a head. The head will also need a certificate of the representative office registration issued by the Ministry of Economy, a certificate from the statistics authorities, as well as from the tax authorities confirming the registration.
It is important to choose the proper bank, which has experience of working with foreign clients, representative offices in several countries and a convenient user system.
The process of opening an account takes only an hour or two, but it is worth monitoring this process and making sure that the documents you receive as a result are correct.
You may also like: How to Start a Foreign Business in Ukraine?
What to do with the account next?
Further, it is necessary to maintain the account, money flow accounting. This is part of the work not only of an accountant, but also of a lawyer, who will check the documents on transactions and handle the problems that may arise.
The most standard issue that arises in transferring funds to the account of the company or representative office is the receipt of funds without the purpose of payment. Usually in this situation it is necessary to contact the bank, submit additional documents explaining the reasons for the payment to the account of the representative office, and correctly reflect the funds received in the accounts.
Financing from the parent company, payments to suppliers, the payment of employees' wages and much more can go through the representative office's account.
Normally the accountant of the representative office keeps the accounts, but even the most skilled specialist often needs advice and assistance from a lawyer, who will check the documents and tell you how to solve an unpleasant situation. This is exactly the kind of assistance we offer you as part of legal services for foreign representative offices in Ukraine.
You can check the cost of legal and accounting support services for the representative office here. Or contact our specialists for a personal package of services.
Do you want to open a representative office in Ukraine? We offer a simple solution and legal support at each stage of registration.
We will not only undertake your task, but also make sure that it is really the best option for you. In the other case - we will offer and implement another solution.
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