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Doing business in Ukraine

but employee can be register as PI

Ephratk :

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

It is a good question. As usual foreigners prefer rep.offices not realizing that a rep.office in Ukraine is not the same as one out there.

Your question was "Is it possible for a company out of the Ukraine to employee Ukranian employees in the Ukraine without opening a Ukranian company?" So I mentioned about a rep.office because it is not a legal entity.

I do not know whether a rep.office can help you or not. As I do not know whether an agency contract can suit to your needs. I do not know what business you carry out, where your company is registered, why you do not want to set up a company in Ukraine, etc.

IOW show me your money and we will talk :)

MAJ_Lukash :

but employee can be register as PI

You are right if you meant a private entrepreneur by PI (so it must be PE in fact). But this what I meant saying about agency contracts.

In labor relationship you have an employer and employee, the Labor Code and other legislation. In agency relationship you have an agent and principal, the Civil and Commercial codes, etc. The difference between those two is not only in different terms but also in peculiarities of regulation, including tax regulation.

I prefer the employee to be my employee and not through out sourcing, is that possible if I do not have a Ukraine company?
Why does it matter where I'm located? it depends on the Ukraine law and that is what I'm trying to understand.
We are in the High tech industry.

Thank you

good, but not complite answer

Ukrainian legislation, welcome

Ephratk :

I prefer the employee to be my employee and not through out sourcing, is that possible if I do not have a Ukraine company?
Why does it matter where I'm located? it depends on the Ukraine law and that is what I'm trying to understand.
We are in the High tech industry.

Thank you

The country of your company's registration matters because countries have international treaties. And it may happen that there is a treaty between Ukraine and your company's country that regulates some or all aspects of your situation.

As I said above Ukraine needs to control taxes and labor rights. In order to do this, Ukraine needs to have some tools to control the employer. How can this be done when the employer is in a foreign country and is not bound by Ukrainian law?

As an option, a person, you are interested in, is registered as a private entrepreneur, enters into a contract with you (lets say an agency contract) and provides you with his services, you pay for this services, the guy pays taxes.

We are located at BVI - British Vergion ilands

Ephratk :

We are located at BVI - British Vergion ilands

BVI is an official offshore territory to Ukraine and there is no international treaty between Ukraine and BVI on avoiding of double taxation.

Lets change the subject of the discussion a little bit and ascertain what you really want, e.g. labor relations, to be able to have Ukrainian individuals working on you and getting paid from BVI, smt else... In other words lets get away from definitions and legal terms, just specify in plain words what you need.

I will clarify my previous post a little bit.

Labor relations between an employee and employer mean that:
- the employee has some guarantees like 8 hour working day; 2 days off; 24 day vacation; sick leave; deductions to the pension fund; etc;
- employer has some guarantees like abiding of company rules; 2 week notice before leaving the company; confidentiality obligations; etc.

Civil relations between contractors are regulated by the agreement concluded by them and the parties are free to set forth any terms of cooperation in the contract (within a relevant legislation of course).

A person also can provide your company some services or perform some works and get paid without any contract, without any registration. But such a performer will need to abide other legislation peculiarities different from those applied in the two cases mentioned above.

So you need to understand what you want and then find a solution.

So your saying that if I do not want to employy him/her through out sourcing then either he/she works for me as a freelance and than I can pay him without opening a Ukrainian company
or
I open a Ukrainian company and pay him that way.
Right?

Ephratk :

So your saying that if I do not want to employy him/her through out sourcing then either he/she works for me as a freelance and than I can pay him without opening a Ukrainian company
or
I open a Ukrainian company and pay him that way.
Right?

Almost:
- you can open a compeny in Ukraine and hire personal;
- you can conclude a civil contract with a needed perons. In this case this person must be registered as the PE with all relevant consequences;
- you can just receive services/works and pay for them with no guarantees from either side;
- oursourcing. By outsourcing I understand that you hire another company that is the employer of a person you are interested in.

You can also sign any contract, memorandum or whatever, call yourself and your "employee" whatever term... but that will not be legaly correct relations. The four options above are about how the issue could be solved legaly.

Thank you

I have not done "business" in Ukraine, at least not above table, but why on Earth would anyone even think of such a thing? Do you people realize your talking about a country in which the government uses books 50+ years old to record information?

The police have no computers or databases or servers, they use pen and paper, and then mail reports to another office, if your lucky.

Sure, the "Welcome, Foreign Investors, to Ukraine" sign is up, and somebody is rubbing their greedy hands together just salivating at the idea of all your Euros funding his new house or boat or vacation or whatever.

If you have the discretionary income to throw out the window, at least invest in the stock market where you have some chance at a return...maybe.

wjsd_kyiv :

The police have no computers or databases or servers, they use pen and paper, and then mail reports to another office, if your lucky.

First of all the above citation is false.

Second, Ukraine is NOT an investment haven, it is corrupted, tax system is complicated, and so on and so on. But because of some reason some guys decide to invest here and they are asking for some help with this. They do not ask on the Ukrainian forum what country is the best for investment.

GreyKyiv :
wjsd_kyiv :

The police have no computers or databases or servers, they use pen and paper, and then mail reports to another office, if your lucky.

First of all the above citation is false.

You can cry "false" all you want. I sat in the police department building,in the office of the officer assigned to help me, watching the Lieutenant writing by hand my report which my interpreter told him. Not only was he using pen and paper, but he proceeded to write, with pen and paper, that report in triplicate. I actually commented about computers, and the Lt. told my Interpreter basically "This is Ukraine, not America."

That report, was then forwarded in paper form to the "cyber-police" unit in the District of Kiev I reported the crime as having occurred in.

So, sir, you are incorrect.

I do not cry anything, I say what I am confident of.

That your statement I called "false", as it is, is nothing but false. But the situation from your next post is true. I do not have a purpose to persuade anyone that Ukrainian police is well equipped 'cause it is not. Ukraine is not America and it is not even Poland, Estonia, name it. But there is a difference between those your posts, isn't there?

With all respect and with nothing personal - I am correct.

It's cool, your entitled to your opinion, and I am entitled to mine.
If your saying that "no database or servers or computers" is not true I can accept that. I based my original, hastily typed message on what I observed first hand. I am not claiming that I went to every District PD and observed their methods of recording information. I went to the PD in my district of residence.

That this information could not be transmitted except by paper to Obolonski tells me pretty obviously there is little cross-district communication other than by radio or word-of-mouth. No email, no computer database of perps/crimes that can be accessed across districts, thus, if there is a central server(s), an officer in cyber-crime cannot point out this info to a lieutenant in another district, and possibly start connecting some dots. In addition, in the Capital of Ukraine, where the Mayor tells people, "Sorry, we don't have enough money to pay for gas to heat water", your trying to tell me they have some sophisticated, behind the scenes police intelligence unit w/advanced software and computer systems? Bull.

Your claiming this is false, is unsubstantiated, and really doesn't bear up much under scrutiny.

This thread is getting off-topic and I don't think the last messages exchanged here will help potential investors.

Could we please concentrate on the initial topic?

thanks

np, sorry

Hi,

I'll be in Odessa in late July - I'm from Australia and would like to meet you and discuss some of the things you have mentioned in the above post with respect to doing business in Odessa and so forth.

Anyway, let me know if you are interested in meeting me!

Vsego horoshego!

Maitos

Hello Maitos and welcome to Expat.com!

I suggest you to start a new thread on the Ukraine forum. This will allow better interaction. :)

PS: Just to note that the topic title is Doing business in Ukraine.

Thank you,
Aurélie

Hi ... As you already know, I have done business in Ukraine for the past 10 years and now live in Kyiv and have a residence permit. An acquaintance from the States just married a local gal. His passport has a stamp that he is married to a Ukrainian. He was advised that he is not allowed to work for two years. This is not an issue for him. He was told after two years he would be elgiable to apply for a residence permit that would be good for five years. If he decides he wants to work, there are different options, but until then the stamp in his passport is enough. He asked me if this is correct. Frankly, I have no clue and only know about my situation. Is the stamp in his passport enough for the next two years?

Balshoe spacibo za sovet!

Can you not give me some as to how difficult it is to actually start a business in Odessa or Ukraine generally. Where would the place be to start a business without the corruption and headaches people talk about?

Vsego horoshego!

Maitos

Izvinite, ... some ideya ...

spdmon :

Hi ... As you already know, I have done business in Ukraine for the past 10 years and now live in Kyiv and have a residence permit. An acquaintance from the States just married a local gal. His passport has a stamp that he is married to a Ukrainian. He was advised that he is not allowed to work for two years. This is not an issue for him. He was told after two years he would be elgiable to apply for a residence permit that would be good for five years. If he decides he wants to work, there are different options, but until then the stamp in his passport is enough. He asked me if this is correct. Frankly, I have no clue and only know about my situation. Is the stamp in his passport enough for the next two years?

He can work but he needs to obtain a work permit. When in 2 years he gets the residence certificate he will be able to work without any work permit.

Thanks. I appreciate your advice and I will let him know.

hi,i am looking to purchase a registered enterprise in Ukraine Simferopol and would welcome any advice/information
best wishes
steve

You want to buy a legal entity or you want to buy a business?
If you are considering buying a legal entity, e.g. an LLC, then in most cases it is better to register a new one. Buying a company means you buy also all its debts and other problems. It is a risk that can be determined only by professionals. A company is bought when it has some assets on it, like a license or equipment, etc.
Registration of a company now is cheap and easy. Plus you will need to pay for registration of the changes anyway. That will include a notary's fee, registratoin fee, translation of docs if necessary, etc.

Well, with respect to all who are thinking about doing business in Ukraine, it is important to note that the purpose of this forum is not to either encourage or discourage anybody...

Having said that, once I was rather impolitely reminded of it...will not say by whom. I promised to abandon all my efforts and stayed away from this forum for a while. GreyKyiv is also well known here, telling people that all well be OK.

Now, what prompted me to participate in this discussion in that the gentleman describing the lack of police funding and equipment, also the general backwardness of the country and the difficulty of doing business here IN MY OPINION - is absolutely correct.

I also found the tax code to be extremely complicated even though originally I just wanted to register a private enterprise (Language school) and do so in accordance with so called "Simplified Tax Code".  The problem in my case was that to do it I had to be a resident not just a citizen of my country.

The point is - YES UKRAINE IS ONE OF THE HARDEST PLACES TO DO BUSINESS IN and  IT IS NOTHING LIKE IN THE WEST

YOU CAN DO BUSINESS here - registering it either as a private enterprise on "SIMPLIFIED TAX CODE" (through a local) or creating a CORPORATION  and hiring an accountant to help you.

It is possible, just takes more time and effort than in other neighboring countries.

thank you so much for your reply,i basically need to set up a business here to export goods to the uk, but unfortunately i leave simferopol in 2 days time,can you tell me if it is possible to establish a llc while i am not in ukraine, i hope to return in 2-3 months time not present in

ssimferopol :

thank you so much for your reply,i basically need to set up a business here to export goods to the uk, but unfortunately i leave simferopol in 2 days time,can you tell me if it is possible to establish a llc while i am not in ukraine, i hope to return in 2-3 months time not present in

Yes it is possible. You just need to issue a power of attorney to your representative. He'll be able to do all registration formalities while you are out of the country. But he must be a very reliable person. The easiest option to hire a law firm or a lawyer.

oleggy :

GreyKyiv is also a well known, telling people that all well be OK.

Oleg, you promissed to leave the forum but you breached your promiss. No offence, Im kidding.
When you came back it seemed you changed, more common sence was heard from you. However now you are getting back to the previous Oleg we know.

I NEVER adviced people that everything is great in Ukraine. I am tired to respond to such your groundless claims. Read my posts once or twice again if you do not understand my English correctly. In future I would very much appreciate if you stop making such allegations.

I have 6 years of legal experience working for best Ukrainian law firms. If I tell the registration is easy I mean this. However this does not mean it will be easy for you.

what ever man, I said all I wanted to say and I think people have the right to judge for themselves...you can say all you want about me personally...it unfortunately will change nothing about the state of conditions in Ukraine.

Frankly, I have been doing business with Ukraine for over 10 years and I will have to disagree with Oleg. I hired a credible attorney and my business runs smoothly. Granted, there is a lot of paperwork but credible companies as do I, want to cover our backsides. If you think the tax code is difficult, try the USA where I am from. Our tax system is very complicated. All I am saying is I agree with Greykiev ... Ukraine is what it is. If you do your homework and work through the proper channels, all will be fine.

...like I said, arguing anything on this site is a hopeless task, because not only you get abused by the participants on the forum, you also get "corrected" by the moderator.

Now the notion that things are OK in Ukraine and registering a business - straightforward...is just wrong. In all the surveys Ukraine ranks as ONE OF THE HARDEST PLACES TO DO BUSINESS IN, and anyone can check on this statistics.

Arguments like - "...but I work for the biggest law firm"...well yeah the biggest law firm in such a country might be little better than others, but still... In the country like Ukraine be the judge for yourself.

I purposely don't use incinerating language here because the purpose of this forum is not to turn this into a brawl, but to help. For what It is worth  I have had dealings with Ukrainian business world on different levels from top Investment Banks and Corporations to regular small time agents in many fields (real estate, restaurants, hotel staff and so on).

My overwhelming feeling has been that Ukraine lags well behind the rest of Europe and indeed other developed countries in its business laws, conduct and ethics. Ukrainians all know this and do different things to mitigate the damage - like turning for professional services only to their relatives and the  people they know. Foreigners in this respect are not so lucky. This is my sole reason for writing on this forum.

Yet I do agree that not all is "Gloom and Doom". Yes some things have changed over the years and it is now possible to do business in my country - just weigh carefully the amount of time money and effort it takes to do so.

Seems like you have had one difficult life. Try changing your attitude and perhaps others will respond more positively. I never said Ukraine was an easy place to do business. All I am saying is that I have been importing Ukrainian vodka to California for better than 10 years and no problems to speak of and no bribes. As for the ramp at nepotism, why do you think it is only indicative to Ukraine? Every country is guilty of this. Then again, My best friend and a few family members work for me. I just place more stock and in my family and close friends. Lastly, I can't speak for the moderator, but we are not picking on you. We just disagree and that seems to be a concept that you find difficult to handle ... Good day

Hi all,

Can we please get back to the main theme of this thread that is: Doing business in Ukraine

Don't forgot that expat-blog is here to help expatriates all over the world in a friendly, courteous and community way. :)

Thank you,

David.

If anyone is a lawyer and is living in Odessa Ukraine please let me have your telephone number as I will be visiting Odessa very soon and want  alawyer to help me register a sole propritorship concern
M;++92 333 442 8818 emal ; Khusman05[at]gmail.com

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