Why do you need a nominee director when registering an LLC by a foreigner in Ukraine?

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One of the legal ways to stay in Ukraine and get a Temporary Residence Permit is to set up an LLC in Ukraine, which can then be used to start your own business.

We offer this option to many of our Clients who do not have other legal grounds for obtaining a Temporary Residence Permit in Ukraine.

The hitch of the process is that until a foreigner obtains a Work Permit, he/she will have to use the services of a nominee director. In this publication we will tell you who a nominee director is, how the procedure works and why it is needed.

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Why do I need a nominee director when starting a company in Ukraine?

So, why is there any need for someone who will take the position of a director in the LLC established for a foreigner in Ukraine? To answer this question, we need to understand the procedure of establishing an LLC in Ukraine for a foreigner and hiring him/her as a director of this LLC.

Let’s first set the necessity for this step. One of the grounds for obtaining a Temporary Residence Permit in Ukraine for a foreigner is a Work Permit in Ukraine. Of course, to obtain such a permit, you must have a Ukrainian employer, who will apply to the Migration Service for a Work Permit for a foreigner.

If there is no such employer in Ukraine, a foreigner can use the services of a lawyer and set up a company in Ukraine on his own, getting employed there after the company is registered.

And here the question arises, Why can't you register an LLC and immediately appoint a foreigner as a company’s director?

The answer is simple: in order to be employed as a director of a newly established LLC, a foreigner must have a Work Permit. However, the Work Permit can be issued for a specific LLC only - that is, before applying for a Work Permit, you must have a registered company. But you can’t register an LLC in Ukraine without a director.

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Thus, it turns out that in order for a foreigner to become a director of his/her LLC, during the LLC registration this position must be taken by someone else - a citizen of Ukraine, who will subsequently sign an application to the Migration Service for the Work Permit. This person is called a nominee director.

Due to the fact that the further receipt of the Work Permit and operation of the established LLC depends on the nominee director, we recommend you to observe the following rules:

  • Use the services of a reliable nominee director. You need these services for a short period of time and for specific actions.

Our law firm offers the services of its “nominee” director as part of the service for “obtaining a Temporary Residence Permit/Work Permit in Ukraine”.

  • Clearly stipulate the terms of the procedure. The LLC registration in Ukraine and obtaining a Work Permit for a foreigner with our firm takes on average 20 business days.

May you need a nominee director for a Ukrainian LLC?

There are several theoretical situations in which an entrepreneur may need the services of a “nominee” director. For example, if a company does not generate revenue, its activities are terminated, but the owner does not want to liquidate it, at least in the near future.

In this case you may use the services of a “nominee” director, under certain conditions, who will be listed as such, for example, until the company is liquidated. An important point is that the director must also be a founder, otherwise you will have to pay him/her salary.

You can use the services of a “nominee” director as a part of the service for the LLC Alternative Liquidation.

Do you want to set up an LLC in Ukraine and get a Work Permit without any problems? Don’t hesitate to contact us! We will handle the entire procedure according to a proven algorithm, without delays and with a guaranteed result.

Didn’t find an answer to your question?

Learn more about LLC Registration in Ukraine here.

Learn more about the procedure for obtaining a Work Permit for the LLC’s Director in Ukraine here.

Everything about Starting Up a Foreign Business in Ukraine here.
Publication date: 29/10/2020

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