Typical mistakes of foreign companies while opening representative offices in Ukraine

This material will be useful for foreign companies intending to register a foreign representative office in Ukraine. In this article, we will elaborate on the most common mistakes of foreign companies and ways to solve them.

During the period from January to the end of June, 2019, our firm has registered several representative offices of foreign companies. Before contacting our company, most of these foreign companies made the following mistakes. 

1. The company registration document was incorrectly executed. 

In many countries, such as Poland and the Netherlands, a company registration document can be downloaded from the Internet and will be considered legitimate. 

But such a document is not suitable for the registration of a representative office in Ukraine. To be submitted to the Ministry of Economic Development and Trade of ukraine, a registration document shall be certified by the issuing authority or any other authorized  authority. In Poland, for example, this document can be certified by any private notary.

Related article: Certification Of Documents Of A Foreign Company For Registration of A Representative Office In Ukraine. What Is Needed For This?

2. The document was not apostilled. 

Although the apostille procedure is relatively simple in most countries, not everyone understands what an apostille is and what it looks like. Some people think that an apostille is an ordinary notary’s seal.

The apostille is a stamp, or sometimes a sticker, that certifies the authenticity of the documents issued in the territory of the Hague Convention Countries. It looks like this.

3. State fee for the registration of a representative office. 

The state fee for the registration of a representative office is ,500. This amount should be transferred from the company’s account to the account of the State Treasury Service of Ukraine.

In respect of each money transfer, the the bank charges a fee and that’s why the amount is not credited in full to the account of the State Treasury Service of Ukraine. In this case, you have to pay the remaining sum. Given the fact that each payment takes about four banking days, double work delays the process. Therefore, before paying the state registration fee, you need to inquire about the bank charge and make the payment including all bank fees and charges.

Related article: Direction For Registration Of A Representative Office

4. The Bank Account Opening Certificate was improperly certified or executed. 

In order to register a representative office, it is necessary to submit the original Bank Account Opening Certificate duly certified. The signature of the bank employee on this Certificate must be notarized.

We often emphasize to our Clients that in order to get the Certificate, they need to take a notary to the bank. In addition, depending on the diplomatic relations between Ukraine and the country of registration of the company, the Certificate must be apostilled or legalized.

There are also countries with which Ukraine has concluded an agreement on mutual recognition of documents. In this case, no legalization or apostille is required for the documents.

We always advise our Clients on the nature of relations between the countries and the documents certification. You can check the certified Bank Account Opening Certificate here.

5. Failure to grasp the nature of the representative office. 

As a result, the Client may choose the wrong type of the representative office. 

Representative offices are divided into 2 types only: commercial and non-commercial.

A commercial representative office has the right not only to represent the interests of the parent company, but also to engage in business activities.

A non-commercial representative office can only represent the interests of the parent company.

Note! A non-commercial representative office may be converted into a commercial representative office at any time, but never vice versa.

Related article: What The Owners Of The Foreign Companies Must Know, When Registering The Representative Office In Ukraine

If you intend to open a representative office in Ukraine, you better seek professional legal assistance to ensure that the registration process, which lasts for one and a half months, runs smoothly.