Registration of foreign representative office in Ukraine
Foreign representative office or Limited Liability Company under Ukrainian law?
Foreign companies can enter Ukrainian market in two main ways: registration of representative office of foreign entity or creation of a separate Ukrainian company with foreign capital.
When starting business in Ukraine foreign companies usually use creation of the legal entity under the laws of Ukraine, founder of which will be foreign company or an individual foreigner. Establishment of a foreign representative office is rarely used.
It is caused primarily by the financial, time, organizational expenses and additional legal requirements.
Registration of foreign representative office will cost for the company at least $ 5,000 (including state fee, which is $ 2500, legal assistance, notary services and translations). Time costs may be more than two months.
However, the foundation of foreign representative office has a number of advantages: there is a direct possibility to transfer funds to a foreign company to operate on its behalf, inflow of foreign currency are not subject to mandatory conversion into hryvnia, and there is no need to issue work permits for their employees (instead of them the special cards are issued).
It should be noted that the temporary exchange restrictions of the National Bank, which are acting now due to the financial situation in Ukraine (including the compulsory sale of the foreign currency earnings on the interbank) are applied to foreign representative offices.
Foreign investors often use a simpler and economically advantageous scheme for starting business in Ukraine: the registration of LLC, founder of which will be foreign company or an individual foreigner.
The cost of creating of Ukrainian company is several times lower and opening and registering LLC in Ukraine can takes 2-3 days.
The procedure of foreign representative office registration
Registration of foreign representative office is implemented by the Ministry of Economy of Ukraine.
Documents required for registration include:
1) An application form which contains all the information about a foreign company and its representative office in Ukraine (date of creation, organizational and legal form, number of employees, sphere of activity purpose of opening of representative office etc.)
2) extract from the trade (banking) register of the country where the head office of a foreign company is registered.
3) a certificate from the bank where accounts of foreign entity are opened.
4) power of attorney to perform representative functions in Ukraine, made according to the laws of the country where the company is registered.
It is clear that all documents must be translated and legalized in the manner prescribed by law.
The official state fee for registration of representative office is 2500 $
The term of certificate on registration issuing – 2 months from the filing of all documents to the Ministry.
Foreign representative office is not a legal entity and does not exercise economic activity independently, acts only on behalf of a foreign entity, but on the territory of Ukraine fulfills its functions in accordance with Ukrainian legislation.
Registered foreign representative office can open bank accounts in Ukrainian banks.
For registration of foreign representative offices and starting a business in Ukraine, please contact us.