Provided legal and accounting/payroll services for a newly created business in Ukraine

One of the key competencies of our corporate lawyers is setting up businesses with foreign founders (individuals or legal entities) in Ukraine.

In most cases, the founding members of such companies include a foreign citizen, as it allows such person to become eligible for residence in Ukraine. At the same time such individual may also be the founder of a foreign corporation that acts as a majority stakeholder in newly founded Ukrainian business.

In any case, in the first days following the company registration such clients face a common problem - they need to arrange legal and accounting/payroll services for their business. Such services include opening of a corporate bank account and contribution into the statutory capital, the client-bank arrangement, obtainment of the keys for submitting reports in electronic form, payroll accounting, drafting of the employment agreement with a director, if the director is a foreigner and the agreement shall be submitted to the State Employment Center of Ukraine. If a company is established for the purpose of a specific contract or counterparty, it also requires` legal proofreading of agreements and arrangement of other pre-contractual work from the very first days of the company registration.

The volume of such services does not require to recruit full-time employees. Thus, it is more cost-efficient to outsource these services.

In October 2018, we were contacted by a Swedish citizen with a similar request. He wanted to open a company in Kyiv to conclude a Marketing Services Agreement with one of the energy companies. Our lawyers not only successfully assisted in setting up a company with a foreign founding member, but also provided a comprehensive legal and accounting/payroll services during the first six months of the company’s life. In addition, we assisted in preparing and agreeing with the counterparty, a state enterprise, upon the terms of the agreement, which was concluded on the basis of competitive tendering.

During the first six months of the company’s operation it became clear that business wasn’t growing quickly enough due to lack of attention from the Client. The client base did not expand, and the Client eventually had to return home due to family emergency.

The Client also benefited greatly from our legal support of the enterprise in such adverse conditions. We promptly completed all the ongoing processes at the firm, ensured conditions so that there was no need to pay salary to the director during the period of suspension of the business activities, submitted annual reports, and terminated services with no expense to the Client (as it usually happens in case of demobilization of workforce).

Providing comprehensive services to newly established companies, especially with foreign founding members (both individuals and legal entities), usually terminates when business becomes well-developed and the company starts benefiting from recruiting full-time employees. In such cases, our company continues to provide its assistance only to some specific or project tasks of the company and this assistance is no longer comprehensive.

Publication date: 14/06/2018

About author

Name: Volodymyr Gurlov

Position: Partner

Education: National Academy of the Security Service of Ukraine

Knowledge of languages: Russian, Ukrainian, English

Email: [email protected]

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