What is the benefit of registering a representative office in Ukraine?

We were contacted by a Client, a representative of a foreign company that wanted to expand its services area and enter the Ukrainian market. The company’s activities in Ukraine required certain permits, including a Construction License. This fact raised a number of the following questions:

  • What would be the best solution: the registration of a representative office, the purchase of a ready-made company or the registration of a Ukrainian subsidiary?

  • Do representative offices have any tax advantages compared to Ukrainian companies?

  • Which will be faster, and therefore more profitable for our Client in terms of time?

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Advantages of registering a representative office in Ukraine

The main advantage of registering a representative office for many is the complete dependence on the parent company. This attracts many Western foreign companies that want to concentrate primarily on providing certain kinds of services, advertising their activities.

The second advantage is a more simplified scheme for the employment of your foreign workers. If you want to transfer top-management or necessary specialists to your new representative office in Ukraine, they will get special representative office staff cards. Read more here.

Lately Ukraine has significantly reduced the state tax for the representative office registration, which has made the procedure much more affordable and profitable. Today this fee is approximately USD 100.

One more advantage is the opportunity to provide services or sell goods under the company’s brand without the conclusion of any licensing agreements.

Please note! Changes have been recently introduced in the Ukrainian legislation concerning taxation of representative offices in Ukraine. Henceforth it is not the representative office that is to be registered with tax authorities but the parent foreign company.

In our Client’s case, opening a representative office was the best option. But! Please note that the activities of this foreign company require a permit document – a Construction License. This type of license may be obtained for a representative office – but this is rather an exception.

Please note! If the activities of your company in Ukraine are subject to licensing, you will most likely need to register a full Ukrainian company with 100% share of foreign parent company. Our lawyers will be able to give you more detailed information having analyzed your activity and latest changes in Ukrainian legislation.

Note: At the time of publication of this article the licensing authority responsible for issuing the Construction License is temporarily not working. Check the situation with our specialists.

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Legal services for companies that want to enter the Ukrainian market

The choice between representation and registration of a subsidiary in Ukraine depends on your goals and the nature of your activity. In most cases, a representative office gives more control over the actions of the director, but at the same time it complicates the conduct of business activities a little. As for the registration of a subsidiary company, it is, as a rule, just the other way round.

After analyzing your goals, we can offer you the best option for entering the Ukrainian market and convenient conduct of activities.

Our company offers you the following services:

  • Analysis of possible ways of entering the Ukrainian market for a foreign business;

  • Consulting on optimal way of starting a business in Ukraine for certain cases;

  • Registration of a representative office in Ukraine;

  • Development of documents of the representative office, solution of personnel issues of the representative office in Ukraine;

  • Assistance with appointment of the director of the representative office, including foreign citizens;

  • Registration of a subsidiary Ukrainian company;

  • Obtaining licenses and permits necessary for running your business;

  • Tax, accounting, legal advice on the activities of representative offices in Ukraine.

You can find out the cost of registration of a representative office in Ukraine here or by contacting our specialists. We have developed for you convenient packages of legal services from which you can choose the best one.

Please note! We will not leave you after registration of a representative office. If there are any changes in Ukrainian legislation directly affecting your business you will be informed of them. We value each of our Clients and strive to become a legal partner for years to come.

Do you need expert legal advice in Ukraine? Don’t hesitate to contact us! We will help resolve any legal issue simply and safely.

Didn’t find an answer to your question?

Everything about registration of a Representative Office in Ukraine here.

Publication date: 23/06/2021

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