How to open an outstaffing company for foreigners in Ukraine?

Since July 2019 up to the present time our company has been acting as a legal adviser to a European outstaffing company, which offers specialized personnel solutions for such different industries as energy, medicine, etc.

As our Client is not physically located in Ukraine, all legal issues, as well as issues of daily company activities, such as signing of agreements with counterparties, accounting, payment of salaries and HR documentation are handled by our lawyers.

Such cooperation with lawyers in Ukraine allows you to control the activity of your business without worrying that some legal aspects will be missed.

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Why Ukraine is a profitable territory for business?

Our Client: a contractor working in the field of recruitment of engineering staff for an international energy company that has invested in a renewable energy project in Ukraine, namely the construction of solar power plants.

Why choose Ukraine as your business place:

• Ukraine’s energy market is dynamically and steadily developing;
• There are government programs that provide certain benefits in this area, such as green tariff;
• The access to the Ukrainian market is conditioned not only by the implementation of a specific project, but also by the prospects of participation in new projects.

Legal assistance that the Client needed to start providing outstaffing services in Ukraine:

Having decided that Ukraine could become a perfect place to do business, the Client needed to set up a full-fledged legal entity, the founder of which would be the European parent company.

He needed a reliable law firm that would:

• elaborate on the possibility of providing outstaffing services in Ukraine;
• handle all formalities related to legal registration and establishment of a legal entity;
• help with solving legal issues arising at the start of the business.

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How will a lawyer help you choose the business area in Ukraine? Outsourcing or outstaffing?

When choosing the form of interaction with its customer, our Client weighed two options:

• providing supervisory and quality control services (outsourcing)
• providing staff transfer services (outstaffing).

We had to choose the option of business activity in Ukraine, which would take into account the following factors:

• The nature of our Client’s business. That is, the ability to search and hire highly specialized engineering specialists;
• The possibility of fulfilling the customer’s technical task: technical supervision of the construction process to ensure quality, health and safety and environmental control;
• Potential legislative restrictions. Although outstaffing is prescribed by the Ukrainian legislation, today it is lack of a number of regulations necessary for its full functioning. And this may cause certain risks associated with inspections and fines.

On the basis of the information provided by our lawyers, the Client made a choice in favor of outstaffing. This type of business activity could ensure successful recruitment and cooperation with the customer during the entire project life, which fully corresponded to the specifics of the Client’s activity.

What problems could a foreign company face while doing business in Ukraine?

Unclear outstaffing status in Ukraine.

As we have already mentioned above, the outstaffing is not sufficiently regulated in Ukraine.

Our suggestions: to develop a detailed Service Agreement for the provision of personnel and formation of appropriate applications for personnel. However, despite the fact that outstaffing is not recognized by the regulatory authorities, Ukrainian courts recognize personnel leasing. However, provided that a number of requirements are met both in terms of the agreement execution and labor organization.

Prohibitions on outstaffing personnel for hazardous jobs.

The construction and commissioning of solar power plants belongs to such types of work.

Our suggestion: it was decided to organize supervision without the physical presence of employees hired by our Client at the high-risk facilities.

Please note! In cases when it is necessary to directly involve workers in dangerous work, outstaffing ceases to be a working scheme. In this case, it is necessary to structure the work by providing services, and this in turn requires obtaining permits for hazardous work and in some cases - a Construction License.

In such cases, you can’t do without the assistance of a Ukrainian lawyer.

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How did our lawyers offer to formalize the Client’s outstafiing activity in Ukraine?

Taking into account the Client’s needs and our past experience in registration of outstaffing relations, our company has provided the Client with the following services:

• Registration of a business entity, founded by a European parent company;
• Development of a scheme for financing activities at the initial stages before the Ukrainian LLC starts generating its own income;
• Development of outstaffing agreements;
• Recruitment of employees found by the Client, maintenance of salary projects, personnel documentation, termination of employment relations throughout the project life;
• Development of income repatriation schemes;
• Legal advice on various labor, tax and other legal issues.

If you want to get full legal support of your business on the territory of Ukraine and be sure that your business is protected and registered in accordance with the laws of Ukraine, don’t hesitate to call us!

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