Management of foreign companies that enter the Ukrainian market: labor relations issues

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Despite the growing popularity of renewable energy sources, the extractive industry still occupies a leading place in the Ukrainian energy sector. Naftogaz sets high production rates for which Ukrainian companies either do not have enough or do not have the technical basis for production.

In this publication, we will talk about several foreign Clients who took part in tenders for the fuel and energy sector and about our services provided in this regard.

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The core of the case: Legal support of the team of engineers’ relocation to Ukraine

It is quite common for foreign businesses to bring their own specialists to perform certain types of work. This is exactly what happened with our Client (an independent European company), which won the tender for gas production for Ukrgasvydobuvannya, JSC. The necessity of workers’ relocation was conditioned by the technology that was to be applied, namely, hydraulic fracturing. This method of gas production is new for Ukraine, and therefore there is no equipment, let alone sufficient number of specialists in our country.

Our lawyers acted as legal advisers on labor law and migration issues. Since the implementation of the project required a long-term stay in Ukraine, the visa-free period, which was granted due to international treaties of Ukraine, was insufficient for our Client’s employees.

In addition, the employment of foreign nationals in Ukraine, even those who have formal employment relations with a foreign company, needs to be legalized through obtaining the relevant work permits.

Work on the project was done in the following stages:

  • Organization of contractual work, which served as a basis of the workers’ relocation to Ukraine;
  • Preparation of the package of documents and obtaining work permits for 1-3 years;
  • Legal support and assistance in obtaining D-type visas at the Ukrainian embassy abroad;
  • Obtainment of a residence permit for a period corresponding to the period of work permits.

In total, our lawyers legalized about 60 foreign citizens who worked in Ukraine on a rotational schedule.

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The core of the case: Legal support and assistance in obtaining the Construction License

Unlike the previous example, where at the time of applying for our services, the tender had already been won, in this case we were contacted by a large Chinese construction company that was just about to take part in a tender for the construction of infrastructure facilities for the gas production industry. One of the key documents that was needed to participate in the tender was a Construction License in Ukraine.

Besides, foreign management in Ukraine needed a number of services related to obtaining permit documents for employment relations with Ukrainian business entities.

The real estate and construction lawyers advised the Client on the requirements for the material and technical base, as well as on the personnel required to obtain the license for the relevant types of construction work and the class of consequences. After the Client fulfilled the requirements and received all necessary intermediate documents, we obtained the license required for the tender.

As for the management documents, they were divided according to the business entities that were created by a Chinese company in Ukraine, namely the representative office and a limited liability company.

In the first case, we received the service cards. Later on, we represented the Client’s interests in the Ministry of Economic Development and Trade of Ukraine to hire more employees of the representative office than it is allowed by law. For this purpose, we provided appropriate legal arguments and supporting documents.

We also obtained the appropriate permits to work in Ukraine to ensure employment in the LLC.

If you want to enter the Ukrainian market as a player and avoid problems with the execution of company documents, don’t hesitate to call us. We offer comprehensive services and will solve any problem that your business will face.

Publication date: 14/05/2020

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