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Doing business in Ukraine

Hi,

are foreign investors welcome in Ukraine?

Is it complicated to register a company in Ukraine? What is the procedure?

What is the corporate tax rate in Ukraine?

Is it easy to recruit?

Any advice you would share with us?

Thank you very much for your participation,

Julien

1) investors are welcome
2) it is not complicated but you will need a lawyer. If you speak ukrainian you might try to do it yourself but you better use a lawyer. There are a number of reasons for this. The procedure for an LLC briefly is: you conclude a lease agreement of legal address for you future company; draft and sign the dicision to set up your company; sing the charter and notarize it; go to your district state administration and register your company; then go to tax imspection, statistics office and pension fund and obtaine their certificates. This is very shortly, especially considering you are a foreigner, because there are peculiarities for foreigners.
3) corporate tax rate is 25% but there could be other options;
4) eas it is;
5) my advice is to go to a lawyer and do not try to register your company yourself using any guide or advice. To register is not a problem, the problem is to do business with a defective company.

I know that you try to get a guide for the company registration but this is very wrong and does not work with this. The average fee for a company registration law firms charge is about 300 usd. If you cannot pay this then how are you going to do business?

Hi, I want to add some legal info, as I am a lawyer.

If you would like to open a company in Ukraine, one of the matters is that you need to think of whom you will appoint as the company's director.

You should be aware that using foreign citizens' labour in Ukraine is possible only with the special permit. Employment permit is needed also in case if you appoint yourself as the director of your company. Yes, there is such a rule in Ukraine.

When you start a company, you need to have a director before it's registered. But you can not get a work permit before the company is registered, therefore, you need to have only a Ukrainian national to be appointed as a director before the company registration in Ukraine and some time after, during the time period of getting the work permit in Ukraine for yourself.

hi Julien, I run several companies in Ukraine, can share some practical experience.

pm me if interested. cheers Vlad

Hello vladsv,

Julien is a moderator here and, as I understood him, he asked about something like a guide so that people could use it. But the problem is that such approach does not work in this particular case.

But you are welcome to post here something from your experience.

oh i see

OneStopUkraine :

Hi, I want to add some legal info, as I am a lawyer.

If you would like to open a company in Ukraine, one of the matters is that you need to think of whom you will appoint as the company's director.

You should be aware that using foreign citizens' labour in Ukraine is possible only with the special permit. Employment permit is needed also in case if you appoint yourself as the director of your company. Yes, there is such a rule in Ukraine.

When you start a company, you need to have a director before it's registered. But you can not get a work permit before the company is registered, therefore, you need to have only a Ukrainian national to be appointed as a director before the company registration in Ukraine and some time after, during the time period of getting the work permit in Ukraine for yourself.

Not exactly correct. It is possible to use a foreign person as a director who is already a permanent resident in Ukraine.
As General Director in Ukraine I have established many companies in Ukraine. It is now easier, but still difficult when compared to EU countries.

The following may help explain the procedures required
(extracted from Club documents)

The most frequently used form of business representation in Ukraine is a Limited Liability Company (LLC). LLC is similar to a joint stock company, but LLC does not have shares in a traditional sense. Similar to JSC investors in a LLC (named as “participants”) are only liable for a company’s obligations within their capital contributions. However, investors’ interests in a LLC are not “securities” and therefore are not subject to registration with the Ukrainian Commission for Securities. Shareholders in a LLC own a percentage in the company’s capital that should be specified in LLC’s Articles.

Since 2004, the law allows establishing an LLC with one shareholder (either a legal entity or an individual). Shareholders of an LLC have almost the same rights as shareholders of a JSC. However, there are certain significant differences: shareholders of an LLC may transfer shares in the company’s capital only based on the consent of all other shareholders; a shareholder may exit from a LLC and withdraw part of company’s assets proportionally to its share in the company’s capital; a shareholder may be excluded from the company with compensation of its share in the company’s assets; shareholder’s creditor may demand to withdraw shareholder’s share in company’s assets for settlement of its obligations.

An LLC has two corporate bodies:
•    General Meeting of Shareholders, which is the company’s highest management body,
•    Board of Directors and/or General Director, which is the executive body governing the company’s day-to-day activity.

The General Meeting of Shareholders consists of the shareholders of the LLC; each of them has votes proportionally to its participation in the company capital. A quorum for the General Meeting of Shareholders is presence of shareholders, which hold at least 60% votes. This quorum usually is entitled to adopt most of the Company’s decisions.

Board of Directors governs day-to-day activities of the LLC and represents the company before third persons. Management of LLC may be collective (Board of Directors) or individual (Director). The structure, authority of the management and working procedures shall be specified in the Articles of the Company.

In order to register LLC with shareholder physical entity, the following is required:

1.    The minimum capital requirement for the establishment is to be paid within one year after the establishment of the company.
2.    ID tax number in Ukraine.
3.    Copy of shareholders’ passport.
4.    Power of Attorney for representatives of our company with authorities for registration of the company in Ukraine.
5.    Information about the seat of the company: either Ownership certificate for the apartment where the company shall be registered, or lease agreement, or the business centre.

In order to draft the foundation documents for a resident company, the following information is required:
1.    The name of the company (in Ukrainian and English: full name and abbreviated name). If the name for the company is widely used it is necessary to make booking of the name. The procedure takes 2-4 days,
2.    The company's purposes. Ukrainian law does not permit "catch-all" purpose clauses such as "any legal activity under Ukrainian law." Thus, the foundation documents must broadly detail all of the company’s current and potential activities,
3.    The director of the company may be foreigner, but only after he/she gets his Work Permit, as prescribed by law, or is a permanent resident in Ukraine.  Initially, the director could be a Ukrainian. As soon as the foreigner director obtains his/her Work Permit, a change of director will be required to follow.
The procedure of registration of LLC takes about 3 weeks, starting from the date of receiving the full set of required documents. 

Hope this helps.

Thanks for your contribution everyone.;)

Harmonie.

The guide Britkyiv kindly provided us with gives basic understanding of an LLC. I would like to add just 2 remarks to this guide:
i) LLC is one of the forms of business in Ukraine and the reason why Britkyiv wrote only about this form of business is that it is just the most popular one. Foreigners also might consider to register as Natural Person Entrepreneur or to buy an already registered Private Enterprise (the latter is not registered anymore but those that were registered in the past are absolutely legitimate and operative). There are fewer requirements in law for these two forms of business but this is not always good. There are also other forms but they are for “big business”.
ii) the guider Britkyiv provided us is little bit out of date. I.e.:
- you cannot book now a company’s name;
- registration procedure is less than 3 weeks actually but it depends on documents you need to provide for the registration (that should be legalized/apostiled, translated into Ukrainian and notarized).

Note that there are many many other nuances of the registration procedure. And even though a Ukrainian/Russian speaking person can practically do it without a lawyer, I guarantee you that there will be lots of “mistakes”.

Hi,
I am a Pakistani National and currently working in Saudi Arabia. I am planning to move to (simferopol) Ukraine for good with my family and start business there. We have a family friend, who can help to get us satellment but how she don't know ! Can someone help with his/her expertise to find a good and fast way !
I am planning to start Restaurant & Hotel type business and willing to invest about 500,000$ .... is this money enough !
Best Regards,

Hi saeedmirza,
It depends on a restaurant you want to open bit in general I think it is more than enough. Though I do not have restaurant experience but this money is quite a big sum for Ukraine.

Dear GreyKyiv,
Thanks for your prompt supportive response. My question is about a resident permit in Ukraine. How can we (me & my family - 2kids) can get the residence permit and kids can continue studies there.
I thankyou again and apriciate your help.
Best regards,

There are a few options for you. But first you should tell the following:
- how long are you married to you wife and what is her citizenship ?
- how old are your children and what are their citizenship?
- how long are you going to stay in Ukraine?

We are all Pakistani national.
The stay in Ukraine depends on business success
I am 42 years old, my wife is 30 years and my kids are 6 & 7 years old.
Thanks again ....

In your case you can invest 100 000 Eur and it gives you a right to permanently reside in Ukraine. For instance, you set up a company (that you will do anyway as you want to open a restaurant here), buy a premises for this restaurant or apartment/house for yourself and put it into the share capital of your company. After that you can apply for your immigration permit. But the money should be wired into Ukraine in a proper way. If you do it in a wrong way the scheme could not work out.

Do you have HSBC branch in Ukraine ? because I have international account in HSBC Bank.
100,000 EURO need to be invested in business or it's a deposit to the Government of Ukraine ?

Dear Greykyiv,
One more question!
Fixed Deposit of 200,000$ in a Ukranian Bank will help or no !

saeedmirza :

Do you have HSBC branch in Ukraine ? because I have international account in HSBC Bank.
100,000 EURO need to be invested in business or it's a deposit to the Government of Ukraine ?

Yes we have this bank. Here is its link
http://www.hsbc.com/1/2/about/network/europe/ukraine

The deposit is not an investment. The investment, if to be very general, is a purchase of assets. Thus there is this scheme - to buy a house/apartment (gives you an own place to live in) and to put it into a share capital (to invest it).

can Representative Office of HSBC Bank plc in Ukraine make international transactions like 500,000$ !

You mean to say that if I buy property for my own residence, should be ok to apply for a residence permit or I have to have a parallel business too ?

Our Ukrainian friend and business partner has obtained an invitation letter for me and my family. How long we can stay in Ukraine on that letter. Normaly Ukranian Embassy issue 90 days visa, Is the stay extendable without departing from Ukraine?

If I get more time, will help me to choose right location and business instead of arranging everything in emergency ...

saeedmirza :

can Representative Office of HSBC Bank plc in Ukraine make international transactions like 500,000$ !

You mean to say that if I buy property for my own residence, should be ok to apply for a residence permit or I have to have a parallel business too ?

I do not know for sure about HSBC. It is better to ask them directly.

Yes you have to have a parallel business there. Owning a house does not allow to apply for the residency permit. Though maybe someone has the oposit experience. You see, every particular case should be stadied separately. Maybe Ukrainian government will not confer you this status because you are from Iran (this is just an example). If I were you I would think very very carefully before wiring 500,000 USD in Ukraine.

saeedmirza :

Our Ukrainian friend and business partner has obtained an invitation letter for me and my family. How long we can stay in Ukraine on that letter. Normaly Ukranian Embassy issue 90 days visa, Is the stay extendable without departing from Ukraine?

If I get more time, will help me to choose right location and business instead of arranging everything in emergency ...

An invintation letter is valid for 6 months. You are going to apply for a short time visa, as I understand. This type of visa allows you to be in Ukraine 90 days within 180 days. Then you will need to departure and to apply for a visa once again.

Sorry but I did not understand your last sentence.

I mean to say that staying on Invitation letter for 6 months will provide me enough time to look for a good location for business.

Can stay on Invitation letter extended upto one year ?

saeedmirza :

I mean to say that staying on Invitation letter for 6 months will provide me enough time to look for a good location for business.

Well, I think only you can answer this question.

In general "stay on invintation letter" cannot be extended up to one year. Though maybe there is some exception. For expample maybe it can be extended based on the principle of reciprocity (i.e. Iran does the same to citizend of Ukraine). Again - every case must be studied separatly.

Thanks a million Sir, You have been great help and clarified many points for me. Regarding wire trabsfer, I 'll follow your advise and will not transfer untill the situation is clear for me.
Thanks again, GOD BLESS YOU AND FAMILY...

saeedmirza :

Thanks a million Sir, You have been great help and clarified many points for me. Regarding wire trabsfer, I 'll follow your advise and will not transfer untill the situation is clear for me.
Thanks again, GOD BLESS YOU AND FAMILY...

Thank you for these sincere blessing. May you and your family be blessed too. Have a nice living in Ukraine.

Thanks and We wish you and your family all the very best in life.
take care
bye

I have been living and teaching in Odessa for more than three years, and I assure you that there is plenty of needed information that has not been posted on your site. I am almost ready to open my own business here, and I would never follow the advice given here.

Fist off, you need to understand the difference between black and white business and the Ukrainian business mentality.

Second, you need to have at least two successful, trustworthy Ukrainian businessmen that can guide you through the process, and more importantly, they need to be the type of men whose only desire is to help you and not take what you build.


Third, why? Because you are going to have to have someone that is a native to deal with the police, the fire inspector, the politicians, and the city officials who WILL 100% most asuredly come to you with their hands out. If they know that you are American, the amount of grease money that you will have to spend to do business there will be prohibitive unless you have unlimited amounts of cash the way that McDonalds does or you have a Ukrainian front man that already has these contacts in place in the police department, fire inspectors office, etc. They (officials with their hands out) will bury you and they will keep comnig back asking for more, and more, and more. So, you definitely need a front man.

Next, I plan on opening an English school here. I will not do it until I have at least $200,000 unneeded cash even though my monthly outgo at a fully operational state will be less than $15,000 per month. You always have to have "black" money available to handle the unavoidable mishaps and adventures that will invariably occur here.

I could write an entire book on this topic, but I will just tell you that you are welcome to come visit me here in Odessa, meet the trustworthy Ukrainian businessmen that I have developed relationships with, and conduct your own interviews.

I would be happy to guide you through this process. If you are the type that has had many disagreements over payment with your business partners in the past, please don't bother responding. I always live up to my word, even if it takes me years to do so. Of course, I won't do any comprehensive work for free any more.

You can begin checking out my work if you'd like at
http://loveukr.com/
http://lovinginukraine.com
http://lovinginukraine.blogspot.com

Happy Hunting

Vincent

saeedmirza :

I mean to say that staying on Invitation letter for 6 months will provide me enough time to look for a good location for business.

Can stay on Invitation letter extended upto one year ?

It is Ukraine. Rules like these need not apply if you understand the system and the mentality of the majority of its citizens.

Britkyiv :
OneStopUkraine :

Hi, I want to add some legal info, as I am a lawyer.

If you would like to open a company in Ukraine, one of the matters is that you need to think of whom you will appoint as the company's director.

You should be aware that using foreign citizens' labour in Ukraine is possible only with the special permit. Employment permit is needed also in case if you appoint yourself as the director of your company. Yes, there is such a rule in Ukraine.

When you start a company, you need to have a director before it's registered. But you can not get a work permit before the company is registered, therefore, you need to have only a Ukrainian national to be appointed as a director before the company registration in Ukraine and some time after, during the time period of getting the work permit in Ukraine for yourself.

Not exactly correct. It is possible to use a foreign person as a director who is already a permanent resident in Ukraine.
As General Director in Ukraine I have established many companies in Ukraine. It is now easier, but still difficult when compared to EU countries.

The following may help explain the procedures required
(extracted from Club documents)

The most frequently used form of business representation in Ukraine is a Limited Liability Company (LLC). LLC is similar to a joint stock company, but LLC does not have shares in a traditional sense. Similar to JSC investors in a LLC (named as “participants”) are only liable for a company’s obligations within their capital contributions. However, investors’ interests in a LLC are not “securities” and therefore are not subject to registration with the Ukrainian Commission for Securities. Shareholders in a LLC own a percentage in the company’s capital that should be specified in LLC’s Articles.

Since 2004, the law allows establishing an LLC with one shareholder (either a legal entity or an individual). Shareholders of an LLC have almost the same rights as shareholders of a JSC. However, there are certain significant differences: shareholders of an LLC may transfer shares in the company’s capital only based on the consent of all other shareholders; a shareholder may exit from a LLC and withdraw part of company’s assets proportionally to its share in the company’s capital; a shareholder may be excluded from the company with compensation of its share in the company’s assets; shareholder’s creditor may demand to withdraw shareholder’s share in company’s assets for settlement of its obligations.

An LLC has two corporate bodies:
•    General Meeting of Shareholders, which is the company’s highest management body,
•    Board of Directors and/or General Director, which is the executive body governing the company’s day-to-day activity.

The General Meeting of Shareholders consists of the shareholders of the LLC; each of them has votes proportionally to its participation in the company capital. A quorum for the General Meeting of Shareholders is presence of shareholders, which hold at least 60% votes. This quorum usually is entitled to adopt most of the Company’s decisions.

Board of Directors governs day-to-day activities of the LLC and represents the company before third persons. Management of LLC may be collective (Board of Directors) or individual (Director). The structure, authority of the management and working procedures shall be specified in the Articles of the Company.

In order to register LLC with shareholder physical entity, the following is required:

1.    The minimum capital requirement for the establishment is to be paid within one year after the establishment of the company.
2.    ID tax number in Ukraine.
3.    Copy of shareholders’ passport.
4.    Power of Attorney for representatives of our company with authorities for registration of the company in Ukraine.
5.    Information about the seat of the company: either Ownership certificate for the apartment where the company shall be registered, or lease agreement, or the business centre.

In order to draft the foundation documents for a resident company, the following information is required:
1.    The name of the company (in Ukrainian and English: full name and abbreviated name). If the name for the company is widely used it is necessary to make booking of the name. The procedure takes 2-4 days,
2.    The company's purposes. Ukrainian law does not permit "catch-all" purpose clauses such as "any legal activity under Ukrainian law." Thus, the foundation documents must broadly detail all of the company’s current and potential activities,
3.    The director of the company may be foreigner, but only after he/she gets his Work Permit, as prescribed by law, or is a permanent resident in Ukraine.  Initially, the director could be a Ukrainian. As soon as the foreigner director obtains his/her Work Permit, a change of director will be required to follow.
The procedure of registration of LLC takes about 3 weeks, starting from the date of receiving the full set of required documents. 

Hope this helps.

Thank you for this. This is EXTREMELY helpful!!!

mudryst :
Britkyiv :
OneStopUkraine :

Hi, I want to add some legal info, as I am a lawyer.

If you would like to open a company in Ukraine, one of the matters is that you need to think of whom you will appoint as the company's director.

You should be aware that using foreign citizens' labour in Ukraine is possible only with the special permit. Employment permit is needed also in case if you appoint yourself as the director of your company. Yes, there is such a rule in Ukraine.

When you start a company, you need to have a director before it's registered. But you can not get a work permit before the company is registered, therefore, you need to have only a Ukrainian national to be appointed as a director before the company registration in Ukraine and some time after, during the time period of getting the work permit in Ukraine for yourself.

Not exactly correct. It is possible to use a foreign person as a director who is already a permanent resident in Ukraine.
As General Director in Ukraine I have established many companies in Ukraine. It is now easier, but still difficult when compared to EU countries.

The following may help explain the procedures required
(extracted from Club documents)

The most frequently used form of business representation in Ukraine is a Limited Liability Company (LLC). LLC is similar to a joint stock company, but LLC does not have shares in a traditional sense. Similar to JSC investors in a LLC (named as “participants”) are only liable for a company’s obligations within their capital contributions. However, investors’ interests in a LLC are not “securities” and therefore are not subject to registration with the Ukrainian Commission for Securities. Shareholders in a LLC own a percentage in the company’s capital that should be specified in LLC’s Articles.

Since 2004, the law allows establishing an LLC with one shareholder (either a legal entity or an individual). Shareholders of an LLC have almost the same rights as shareholders of a JSC. However, there are certain significant differences: shareholders of an LLC may transfer shares in the company’s capital only based on the consent of all other shareholders; a shareholder may exit from a LLC and withdraw part of company’s assets proportionally to its share in the company’s capital; a shareholder may be excluded from the company with compensation of its share in the company’s assets; shareholder’s creditor may demand to withdraw shareholder’s share in company’s assets for settlement of its obligations.

An LLC has two corporate bodies:
•    General Meeting of Shareholders, which is the company’s highest management body,
•    Board of Directors and/or General Director, which is the executive body governing the company’s day-to-day activity.

The General Meeting of Shareholders consists of the shareholders of the LLC; each of them has votes proportionally to its participation in the company capital. A quorum for the General Meeting of Shareholders is presence of shareholders, which hold at least 60% votes. This quorum usually is entitled to adopt most of the Company’s decisions.

Board of Directors governs day-to-day activities of the LLC and represents the company before third persons. Management of LLC may be collective (Board of Directors) or individual (Director). The structure, authority of the management and working procedures shall be specified in the Articles of the Company.

In order to register LLC with shareholder physical entity, the following is required:

1.    The minimum capital requirement for the establishment is to be paid within one year after the establishment of the company.
2.    ID tax number in Ukraine.
3.    Copy of shareholders’ passport.
4.    Power of Attorney for representatives of our company with authorities for registration of the company in Ukraine.
5.    Information about the seat of the company: either Ownership certificate for the apartment where the company shall be registered, or lease agreement, or the business centre.

In order to draft the foundation documents for a resident company, the following information is required:
1.    The name of the company (in Ukrainian and English: full name and abbreviated name). If the name for the company is widely used it is necessary to make booking of the name. The procedure takes 2-4 days,
2.    The company's purposes. Ukrainian law does not permit "catch-all" purpose clauses such as "any legal activity under Ukrainian law." Thus, the foundation documents must broadly detail all of the company’s current and potential activities,
3.    The director of the company may be foreigner, but only after he/she gets his Work Permit, as prescribed by law, or is a permanent resident in Ukraine.  Initially, the director could be a Ukrainian. As soon as the foreigner director obtains his/her Work Permit, a change of director will be required to follow.
The procedure of registration of LLC takes about 3 weeks, starting from the date of receiving the full set of required documents. 

Hope this helps.

Thank you for this. This is EXTREMELY helpful!!!

A part of the infor is out of date.

mudryst :

You can begin checking out my work if you'd like at
http://loveukr.com/
http://lovinginukraine.com
http://lovinginukraine.blogspot.com

Happy Hunting

Vincent

May I ask your marital status?

mudryst :

You can begin checking out my work if you'd like at
http://loveukr.com/
http://lovinginukraine.com
http://lovinginukraine.blogspot.com

Happy Hunting

Vincent

Dear, Vincent,

to tell the truth I was a bit puzzled by the name of your book, nevertheless I'd love to ask you:  don't you want to write and publish a guide for Ukrainian girls on western men's treatment?

I will be your first buyer, I promise! I even will read it!


Best regards,
Maria

Hello,

Is it possible for a company out of the Ukraine to employee Ukranian employees in the Ukraine without opening a Ukranian company?

Thank you

Ephrat

yes, it is possible.

why simferopol? For restoran/hotel Sevastopol better

Ephratk :

Hello,

Is it possible for a company out of the Ukraine to employee Ukranian employees in the Ukraine without opening a Ukranian company?

Thank you

Ephrat

In general it is not possible because:
- the state must control taxes;
- the state must control meeting of labour guarantees.

The problem may be solved through agency contracts or a rep.office.

What is a rep office?

Ephratk :

What is a rep office?

It is a representative office.

What does that mean? Who does a representative office help me?

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