License for recruitment of Ukrainian citizens abroad

Increasing of demand for qualified human resources and globalization processes on the labor market caused a new impulse for agency services in international employment. On the other hand, the Ukrainian market offers a large number of employees who want to legally work abroad.

Due to the international standards of labour safety and combating human trafficking, activity of  abroad employment mediation is associated with a clear legal regulation and control.

Depending on the place of actual employment and, roughly speaking, the state in which taxes will be paid, there are two basic forms of recruitment of Ukrainian citizens for work in foreign companies.

The first one, so called “outstaffing” practically means “lease of workers” who are officially employed in Ukrainian companies, for foreign partner projects. If the employee’s work can be performed on the territory of Ukraine, in specific projects or for certain orders, than in case of properly drafted contract between Ukrainian and foreign companies, any problems should not occur.

But if the employee will be actually work in a foreign country, there is issues of permanent business trips arrangements, visa procedures and migration terms. Place of work is an essential condition of the employment contract, and therefore in case of any tax inspections or inspections of labour safety in Ukraine the actual accommodation of employee always is an element of control, and violation of rules will result in the imposition of substantial penalties. In the worst case, improper registration of employees may also become the grounds for criminal prosecution of human trafficking.

The second form is the direct registration of employees for work in a foreign company, with the actual place of work in a foreign country. This registration is carried out by foreign employers cooperation with Ukrainian recruitment agencies, and subject to control by the relevant authorities.

The activity of mediation in employment of Ukrainian citizens abroad according to Ukrainian legislation is subject to licensing.

Foreign companies, which aim to employ Ukrainian citizens in their countries should use the services of business entities that received a license for mediation in employment for work abroad. For permanent recruitment of staff the best option is to create own company on mediation in employment (usually in the form of a limited liability company), and to obtain the appropriate license for recruitment abroad.

To begin, it should be noted that this company (recruitment agency) must be officially registered under the laws of Ukraine, must have its own or rented premises (not a “virtual office” or business address, but real apartment), and documented contractual relations with a foreign entity that wants to recruit Ukrainian employees.

Currently, the body that deals with the issuance of license for recruitment abroad in Ukraine is the State Employment Agency, which verifies the licensing conditions, compliance with specified requirements of documents and makes decision on granting a license or refusal in its issue.

The legislation establishes a list of documents required to apply for a license, including:

·         an application for a license in the prescribed form

·         an original of extract from the Unified State Register of Enterprises and Organizations of Ukraine concerning the applicant

·         information in the prescribed form to the confirm the presence of own or rented office for the exercise of business

·         the main document that confirms the contractual arrangements between foreign company and Ukrainian recruitment agency is a foreign economic agreement (contract) on such activities, a copy of which must be submitted to the State Employment Center.

There is also a number of necessary documents relating to the foreign company that employs citizens of Ukraine:

The copy of the registration documents of the foreign company-employer in the country of residence

·         a copy of the work permit of citizens of Ukraine issued by the relevant authority of the employer, unless otherwise provided by the laws of a foreign country

·         a copy of the work permit for Ukrainian citizens issued by the relevant authority of the employer country, unless otherwise provided by the laws of a foreign state

·         if the law of the country of the employer does not provide work permits for citizens of Ukraine – a copy of the document confirming the type of of its business

·         if mediation in employment of Ukrainian citizens applies only to ships of foreign owners – a copy of the document confirming the ownership or usage of ships by foreign entity or management of ship crew

·         a copy of the license for mediation in employment of Ukrainian citizen, if such a document is required by laws of the country of the employer

·         a copy of the collective agreement between the foreign employer and a trade union, or a certificate from the foreign employer, that such an agreement has been not concluded

License fee is paid at the rate of one minimum salary at the date of taking decision on issuance a license.

Application and submitted documents are examined the Employment Centre within 30 calendar days.

List of companies licensed for mediation in employment abroad is regularly published on the website of the State Employment Service, which provides public access to relevant information about the possibility of legal work outside Ukraine.

Thus taking into account a clear legislative regulation and oversight by the mediation of employment, a license for employment abroad is a must for recruitment of staff in Ukraine.

The procedure for preparation and submission of documents in compliance with all license conditions are not simple, especially given the foreign element in relations mediation. Therefore, we recommend to contact lawyers who have an experience in obtaining licenses.

Having a extensive experience working with State Employment Centre specialists of AL “Bachynskyy, Kolomiets and partners” can offer you a full range of services in mediation in employment abroad: choice of staff recruitment form, registration of the Ukrainian company – recruitment agency, obtaining licenses and support at contracts conclusion and so on.

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Iryna Shumska

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Nataliya Vasylechko

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Taras Bachynskyj