Representative offices of nonresident registration

The basic question for foreign company to enter the Ukrainian market is form of business.

A significant number of foreign companies enter the Ukrainian market by creating their Representative Offices.

Before establishing Representative Office, a foreign parent must be clear about the nature of activities in Ukraine: whether is going to be a simple market research with purely representative functions in Ukraine, or full commercial activities?

The answer implies whether the Representative office is a taxpayer in Ukraine, types of its bank accounts, and finally, the possibility of business operations in Ukraine. Advance exploration of volume and frequency of transactions, peculiarities of business should be carried out before.

Under the applicable legislation Representative Office is not considered as a separate legal entity and acts for and on behalf of the Parent Company. The head of Representative Office acts within the Power of Attorney granted him by the Parent Company.

The main economic benefit of Representative Office is possibility of Parent Company to conduct direct control over Representative Office’s activities, possibility of direct funding and maintenance. Other advantage is "authority" of Parent Company, since the obligations arising from contracts concluded by Representation Officemeans commitmentsto Parent Company. In some cases this is much more attractive to contractors than cooperation with the newly established entity, formally independent from the non-resident founder.

In addition, companies with foreign investments often use the employment of foreign nationals requiring annual work permits, which implies a lot of formalities, time and material costs. For personnel of Representative Officesuch permits are not needed - they work according to special service cards which do not require those formalities.

Registration of Representative Offices is rather a long-lasting process, thus it’s important to prepare and properly legalize documents.

Such documents meet certain formal and substantial requirement, that’s why in order to avoid more time hitches entrust the preparation toexperts who have advisable experience in such issues. We consider all the specifics while developing projects, as such statutory documents are basis of doing business in Ukraine.

"ALLIANCE RATUSHNYAK AND PARTNERS" legal associates provide drafting the documents of the parent company, giving advice to their content, form, proper legalization, given to the existing bilateral agreements between Ukraine and the State of residence of the parent company.

Our attorneys conduct registration at the authority (currently the Ministry of Economic Development and Trade of Ukraine); perform accreditation in the taxation bodies and public funds.

At the initial stage of establishment of Representative Offices “ALLIANCE RATUSHNYAK AND PARTNERS” consult on a lease an office, hiring employees, signing labor contracts, obtain service cards for foreign personnel.

In the course of business, Representation Office faces many challenges of Ukraine's legal system. Thus, to careful paperwork keeping is so important. Currently, the activity of non-commercial Representation Offices is limited to market and public opinion research and experimental development for non-commercial purposes. However,detecting ofcommercialactivities’ features of non-commercial Representation Offices means recognition of his commercial statuswithin the meaning of the Tax Code of Ukraine and thus charges of taxes, prosecution and penalties.

Associates of “ALLIANCE RATUSHNYAK AND PARTNERS” carry out legal support, providing advice on tax law, monetary policy, labor law, corporate law, international trade and investment.

“ALLIANCE RATUSHNYAK AND PARTNERS”, LLC provides:

• legal opinions as of entry the Ukrainian market;
• advising on the optimal form of doing business;
• preparation of documents, consult of formal and substantial requirements for them, their legalization in Ukraine and subsequent translation;
• conduct the registration at registration authority;
• accreditation at tax authorities, other state bodies and funds;
• counseling and assistance in making the lease office;
• hiring employees, signing labor contracts, service card of employees obtaining;
• Legal support: tax law, monetary policy, labor law, corporate law, foreign law, international trade and investment.

In case of any questions contact us: 044-227-16-81(82) or write us an e-mail.