Doing Business in Ukraine

Follow Us On:

Facebook Twitter YouTube LinkedIn

ad

ad

Monsanto

UKRFCU

SCM

GRPVA

IT Ukraine

Davenport

Dunwoodie Travel

JCSemper Travel

UKRAINE FACTS
GDP:   $106.5 billion
GDPPC (PPP) $6300
Population: 47 million
Exch rate to $: 5.05 Hryvnia
Area: 603,700 sqkm
Arable Land: 53.8%
Legal System: Civil law
Labor Force: 22.67 million
Major Exports metals
Major Imports fuel, energy
   

How to Open a Business In Ukraine

How to Register a Business in Ukraine

Standardized Company
Legal Form: Corporation
Minimum Capital Requirement: 35,000
City: Kyiv

Procedure 1. Notarize company charter and execute premises (if needed)

Time to complete: 1 day
Cost to complete: UAH 350
Comment: The notary fees are UAH75 at state notary, UAH200-400 at private notary. Notary fees depend on number of participants for approval, number of pages and copies of registration documents and additional notary fees, approved by Oblast (Regional) Department of Justice.
Company's Charter is the sole founding document necessary for registration. It should be accompanied with notarized copy of Minutes of the founders' meeting confirming founders' decision to establish the company, whereas founders' signatures on the original Minutes should also be notarized. Previously, the founders were required to enter into a Founders' Agreement, which had to be submitted for registration along with the Charter and no notarization of the Minutes were required. Requirement to supplement the registration application with an instrument (e.g. lease or sale-and-purchase agreement) evidencing company's entitlement to occupy the premises where its management is to be located (registered address) was eliminated. However, the registering authority may still demand that such document be produced for verification.

Procedure 2. Open a temporary bank account for initial capital

Time to complete: 1 day
Cost to complete: no charge or up to UAH 100
Comment: The founder is obliged to contribute 50% of its Charter Fund contribution before registration of the company. Contributions of founders may be made in cash including foreign currency as well as in kind.

Procedure 3. Transfer registration fee to the Registry's account

Time to complete: 1 day
Cost to complete: UAH 1-7 (bank's charge)

Procedure 4. Register at the Registration Office

Time to complete: 11 days
Cost to complete: UAH 170
Comment: Documents for registration are: (1) two copies of the Charter, (2) Minutes of founders' meeting, (3) application form (Registration Card), (4) bank document evidencing payment of registration fee. The registering authority (State Registrar) issues a Certificate of Registration, being company's incorporation document. According to the Law of Ukraine "On the State Registration of the Legal Persons and Private Persons - Entrepreneurs" No. 755-IV, dated May 15, 2003, State Registrar should perform all due registrations with the State Statistics Committee, State Social Funds and Tax Authorities on behalf of the newly registered company. However, according to existing practice, State Registrars do not perform the registration with the State Statistics Committee on behalf of the company. Such registration is usually performed by the company itself.
So far, with the implementation of the one-stop shop (one window) principle, registration with Pension Fund, Employment Fund, Social Insurance Fund, Industrial Accidents Fund and the Tax Authority (except for VAT registration) is done at the Registration Office. Directed by the President (Direction No. 1-1/444 of June 1st, 2005) and the Prime-Minister (Direction No. 28479/1/1-05 of June 2nd, 2005) of Ukraine, on August 8th, 2005, the Cabinet of Ministers issued Resolution 'On Top-Priority Measures on Expediting Revision of Regulations and Enhancing Registration and Authorization Procedure' No. 321-?. This Resolution greatly facilitated implementation of 'one-window' registration.
Pursuant to Order of the State Tax Administration of Ukraine 'On Amending Instruction on the Procedure for Keeping Record of Taxpayers' dated August 8th, 2005, No. 317 stand-alone tax registration was abandoned and brought to the 'window'.
Since July 1st, 2005, companies do not need to independently register with local Employment Centers as payers of social insurance contributions (Letter of the State Employment Center of the Ministry of Labor and Social Policy of Ukraine 'On Issues of Introduction of 'One-Window' dated July 17th, 2005, No. DC-09-4408/0/6-05). Such registration was brought to the 'window'.

Procedure 5. Register at the State Statistics Committee

Time to complete: 1 day
Cost to complete: UAH 27
Comment: This is independently of the fact that the Registry has already filed some information with the Statistics office.

Procedure 6. Register for Profit Tax and VAT at the State Tax Authority, get a VAT number

Time to complete: 10 days (2 days for Profit Tax, 10 days for VAT)
Cost to complete: UAH 17
Comment: Companies which have annual turnover of up to UAH 1,000,000 are eligible for registration as a 6% or 10% Consolidated Tax Payer. 10% Consolidated Tax Payer shall not register as a VAT Payer.

Procedure 7. Approval of Ministry of Internal Affairs to prepare a company seal

Time to complete: 5 business days officially, 3 days for expedite service
Cost to complete: UAH 98 for regular procedure, UAH 148 for expedite procedure

Procedure 8. Prepare a seal

Time to complete: 2 days
Cost to complete: UAH 60-180, depending on the complexity of a seal

Procedure 9. Open a permanent bank account

Time to complete: 1 day
Cost to complete: bank's charge or no charge
Comment: The bank also notifies the tax inspection of the opening of a permanent bank account.

Procedure 10. Notify the District Tax Inspectorate of the opening of the permanent bank account

Time to complete: 2 days
Cost to complete: no charge

 

We recommend that you conduct business registration through an experienced legal council.

Please visit:

http://www.frishberg.com

 

Registration of a Representation

Law of Ukraine on Foreign Economic Activities (City of Kyiv, April 16, 1991, ?959-XII)

Article 5. Right to foreign economic activities

"… Foreign business entities, which carry out foreign economic activities in Ukraine, have the right to open their representative offices in Ukraine. Registration of these offices shall be carried out by the Ministry of Economy of Ukraine within 60 days since the date the documents are submitted for registration. For the registration of a representative office of a foreign business entity on the territory of Ukraine there shall be submitted:
· application for registration of a representative office in free form;
· extract from the trade (banking) register of the country, where the foreign business entity is officially registered;
· reference from the banking institution, where an applicant’s account is officially kept;
· power of attorney to carry out representative functions issued in accordance with the law of the country where the office of the foreign business entity is officially registered;

The above documents shall be certified by a notary at the place of issue and dully legalized in consular institutions of Ukraine, if international agreements of Ukraine do not provide to the contrary. Foreign business entities shall pay for the registration of a representative office in the amount, fixed by the Cabinet of Ministers of Ukraine, which shall not exceed real expenses of the country, connected with this registration.

Should The Ministry of Economy of Ukraine refuse in registration of a representative office of foreign business entity or take no decision on its registration within the established 60-day term, the foreign business entity may appeal such refusal in judicial bodies of Ukraine.

There shall be prohibited to demand from a foreign subject of economic activities re-registration of previously registered representative office in Ukraine.

Should any change of name, legal status, legal address of a foreign business entity or its bankruptcy take place, the respective representative office in Ukraine shall inform about that The Ministry of Economy of Ukraine within the 7-day period.

Economic, including foreign economic, activities of foreign business entities on the territory of Ukraine, shall be regulated by the laws of Ukraine, where it concerns the procedure for implementation of economic activities in Ukraine. If this activity is connected with foreign investments, it shall be regulated by the relevant laws of Ukraine…"

List of Documents Necessary for Registration of a Representation of a Company in Ukraine

1. Application for registration on a letterhead of a company signed by Head of a company and with seal affixed. Form is free. Application has to contain:
· name of a company;
· address of a company;
· telephone and fax numbers;
· name of a city, in which a representation is established, and future address of a representation;
· if subsidiaries are envisaged, please name cities of their location;
· number of foreign employees in a representation;
· date of establishment of a company;
· name of a bank and number of account;
· field of activities of a company;
· purpose of establishment and field of activities of a representation (representation activities only), information on business relations with Ukrainian partners and prospects of cooperation development.
Original of application with a signature of Head of a company attested by notary is submitted.

2. Extract from Trade Register of a country of location of an officially registered central management body (office) of a foreign business entity is attested by notary.

3. Certificate of a bank, in which account of a company is opened, containing the number of the account. Original of certificate of a bank is submitted. Signature of a bank employee, which issued certificate is attested by notary.

4. Warrant in the name of a concrete person for execution of representative functions in the territory of Ukraine, listing authorities of a representative. Original of warrant with signature of Head of a company attested by notary is submitted. Originals of documents listed in Paragraphs 1,23,4 have to be duly legalized in consular offices, representing interests of Ukraine.

The documents have to be translated into Ukrainian. Translation is attested by a seal of an official translator only.
The documents have to be submitted to Ministry of Economy of Ukraine no later than 6 months after their issuing in a country of location of a company.

Under acceptance of documents for registration, an applicant is given the number of account for payment of registration fee, amounting to 2 500 USD.