Legal advice to foreigners starting a business in Ukraine
Entering the market of Ukraine, as well as any other business expansion beyond the borders of oneэs own country is a challenge. It is important to combine the interests of your company, the vision of the best way to develop your business and local legal norms and business practices.
Ukraine attracts many foreign investors as a country for doing business - cheap, highly qualified labor, market readiness for consumption of various products, favorable tax rates in many spheres of business activity.
However, be ready to face confusing legislation, high level of bureaucratic hoops and the need to find a reliable local partner who knows exactly how to solve your issues.
Today, we will talk about how to optimize the process of starting a business in Ukraine and share our legal tips and tricks, because the legal registration and protection of your business is just as important as proper business planning.
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Open a window on the taxation of your business.
The taxation issue is one of the most painful for any business. You have to understand what you pay for, how much, how to pay on time without being sanctioned by the tax authorities, and most importantly, how not to overpay.
When foreign companies enter the Ukrainian market, they are faced with the local concept of tax burden. It is shocking that certain representatives of tax authorities have their own practice and opinion on the ratio of the company’s turnover and the amount of its tax deductions. If you did not know about it, did not consult with the tax authority in advance, and as a result did not fall within the limits of the conditional ratio - the tax authority will consider your actions illegal.
And there are not only issues of accrual of taxes in Ukraine at the prescribed rates - if you, for example, will work with foreign counterparties, while in Ukraine, double taxation will be of no small concern to you. And it is also important not to lose on the withdrawal of funds to the parent company. And much, much more.
Thinking about starting a business in Ukraine, the issues of taxation and its optimization should be clarified in advance, taking into account the local rules and practices. This may affect the very scheme of your business and the business plan.
Thus, in developing the scheme of business registration, our team offers, including the explanation/estimation of taxation for your business activity, your proposed amount.
Take care of your staff.
The number of staff that you will need at the start of your work in Ukraine depends on the type of business activity and your plans for development. But there are several positions that are worth thinking about in advance.
Director of the company - the director can be a trusted person or one of the founders (in this case such a person can get a Work Permit in Ukraine without the established minimum wage).
If you plan to appoint a foreigner to this position - he/she will need the abovementioned Work Permit. However, during the registration of the company or representative office the director’s position must be held by a Ukrainian citizen. See more here.
Depending on the complexity of the structure of the proposed company and its management system in Ukraine, you can provide for the powers and rights of the director, stipulating them in the Charter of the company. You can also think of a “four eyes” system, when each payment has two signatories.
Accountant and Lawyer - After the registration of the business, the company starts its activity, which must be correctly accounted for, and all reports must be submitted on time and in the right form to all the relevant authorities. It is important not only to keep correct records, but also to monitor the registration of incoming funds to the account, the registration of company expenses, payment of wages and taxes from them, etc.
We do not single out just an accountant, but a combination - a lawyer and an accountant. Accountants may not know the necessary nuances of tax law, they cannot advise on tax optimization, correctly and quickly solve legal problems that so often arise when dealing with large sums of money. Under the control of a lawyer, accountants will be able to get the necessary information immediately, and will have a reliable back-up of their actions.
We offer the outsourced services of such a working duo. You can take advantage of this proposal at the initial stage of entering the Ukrainian market, or on a permanent basis, using a business support service.
In Ukraine there are requirements to the personnel for the companies which are engaged in special kinds of activity. Usually it concerns licensed activities, such as the provision of financial services, brokering employment abroad, etc. Usually, such companies are faced with the requirements for the qualifications of individual personnel or mandatory employment, for example, of an accountant in the company.
If you need to bring foreign staff for highly specialized work in Ukraine, they will need to obtain Work Permits in Ukraine and possibly a Residence Permit. Read more about employment in a foreign company or representative office here.
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Choose a reliable partner.
You probably will cope with entering the market and solving many problems that arise on your own. Perhaps. But we have not seen cases where it was possible to do it without a Ukrainian partner, trained in the issues of local legislation.
The larger your investments, the greater the risk and fear of making a mistake, not taking into account some legislative requirements. You may get mired in disputes with contractors or state regulatory authorities. You need a reliable source of information on tax, labor, corporate and other spheres of Ukrainian law. A source, which will not only clarify the situation, but also independently resolve all arising problems.
We offer you the services of a team of lawyers, each of whom is a professional in their field of law. This means you will be able to contact us to solve the issue of employment, and to obtain the necessary business licenses and permits, and many other issues.
We can offer both primary business registration with consultation and further legal support for your business in Ukraine. You can check the cost here, or contact our specialists for a personal package of services.
You can start a business in Ukraine easily and safely. The main thing is to know exactly how, and we know it. Do not waste your time and money, contact our experts for professional advice and assistance.
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