Registration of a foreign representative office in Ukraine
Registration of a representative office/branch of a foreign company or organization in Ukraine
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Registration of representative office/branch: brief overview
1) Foreign companies and organizations can register their representative office and branch in Ukraine.
2) The purpose of registering a representative office is to act in the interests of the parent company in Ukraine.
The purpose of registering a branch is to carry out all or part of the functions of the parent company.
3) Foreign representative offices and branches do not have the status of a legal entity, therefore there is no need to form authorized capital.
4) Representative offices of a foreign company are divided into:
- those that carry out business activities in Ukraine;
- those that do not carry out business activities in Ukraine.
5) The process of registering representative offices and branches takes up to 5 business days and is carried out by state registrars.
Cost of registering a foreign representative office/branch in Ukraine
- Legal analysis
- Preparation of document package
- Submission of document package to the registrar
- Obtaining the extract on registration of the representative office
- Registration with the tax authorities
- 40000 uah
- State fee
- 3600 uah
- Seal production
- 800 uah
- Translation of documents
- from 600 uah (depending on volume and language)
- Legal address
- from 6000 uah
Detailed on a representative office regestration
What is a "foreign representative office in Ukraine"?
A representative office of a foreign company, firm, organization is a subdivision of a foreign legal entity registered in Ukraine, the purpose of which is to represent the interests of the parent company.
A representative office in Ukraine acts exclusively on behalf of and under the authority of its foreign founder.
Although representative offices are subdivisions of foreign companies registered under the laws of other states, their activities in Ukraine must fully comply with Ukrainian legislation.
What foreign legal entities may open a representative office in Ukraine?
Both foreign commercial companies and public organizations and charitable foundations can open a representative office in Ukraine. Foreign legal entities may also open their branch in Ukraine.
Previously, different state authorities registered different types of legal entities under different procedures, which significantly complicated the collection and submission of documents.
At present, the procedure for registering representative offices and branches for various types of foreign legal entities is unified and is carried out through the Ministry of Justice of Ukraine with data entered into the Unified State Register.
What is the difference between a foreign representative office and a branch?
According to the Civil Code of Ukraine:
- A branch is a separate subdivision of a legal entity located outside its location and carrying out all or part of its functions.
- A representative office is a separate subdivision of a legal entity located outside its location and carrying out representation and protection of the interests of the legal entity.
Thus, the main difference between a branch and a representative office lies in the scope of their functions and rights.
A branch is created for the direct activity of the company, is part of it and performs its functions.
A representative office performs auxiliary functions aimed at representing the company's interests and, as a rule, does not independently participate in commercial activities, although conducting business activities by representative offices is not prohibited.
Which authority registers foreign representative offices and branches in Ukraine?
Since September 2024, the authority to register subdivisions of foreign legal entities in Ukraine was transferred from the Ministry of Economy of Ukraine to the state registrars of the Ministry of Justice of Ukraine.
Who can submit documents for registration of a representative office or branch?
Only a lawyer or an individual entrepreneur with primary KVED 69.10 "Activities in the field of law" can submit the application and documents for registration of a representative office/branch.
This is stipulated by the provision of the Law, according to which the representative of a foreign legal entity may only be a person from among specially designated subjects of primary financial monitoring who carry out their activities independently.
How long does registration of a foreign representative office/branch in Ukraine take?
The new legislation has reduced the document review period by registrars. Now registration takes not 20, but only 5 business days.
It is important to understand that this period is provided for the direct registration actions by the state registrar and does not account for the time required to prepare and translate documents.
Can a representative office conduct business activities?
Yes, a representative office can conduct business activities.
Ukrainian legislation stipulates that business activities may be carried out both for the purpose of making a profit (entrepreneurial activity) and without such purpose (non-commercial activity).
If a representative office plans to conduct entrepreneurial activity and receive income, it must be registered with the Tax Service as a permanent representative office.
What types of representative offices exist?
The following types of representative offices are distinguished:
- permanent, which carry out entrepreneurial activity and receive profit;
- non-permanent, which perform representative functions and receive funds for their operation exclusively from the parent company.
These names of representative offices are conditional and do not limit the term of their activity in Ukraine.
Permanent representative offices are registered on general terms and are taxpayers according to the chosen taxation system. Such representative offices may both receive funds from the parent company and receive funds from the sale of goods or services. In any case, the funds will be subject to taxation.
Non-permanent representative offices are registered as non-profit. They are exempt from paying income tax, because they receive funds only from the parent company, which are directed at the operation of the representative office and representative functions.
What are the advantages of a representative office over registering a legal entity?
If no entrepreneurial activity is planned, it is worth giving preference to registering a representative office. This option will allow receiving funds from the parent company to support the representative office's activities without the need to tax them.
If entrepreneurial activity is necessary, we recommend registering a limited liability company instead of a permanent representative office. LLCs and permanent representative offices are taxed equally, but registering a representative office compared to registering an LLC takes much longer and costs more. In addition, the legal norms concerning LLCs are much better described in the legislation.
Do foreign employees of representative offices or branches need to obtain a work permit?
According to Ukrainian legislation, representative office and branch employees do not need to obtain a work permit.
Foreign employees of foreign legal entities obtain a residence permit on the basis of a petition from their employer.
Also, since September 2024, foreign employees of representative offices do not need to obtain a service card in order to be employed at the representative office. Employment of such employees occurs analogously to the employment of Ukrainian citizens.
Procedure for registering a subdivision of a foreign legal entity in Ukraine
- Preparation of documents from 3 w.d.
- Consultations
- Preparation of applications, minutes, powers of attorney
- Obtaining original documents required for registration
- Translation of foreign documents into Ukrainian and notarization
- Formation of document package
- Payment of state duty
- Submission of documents to the state registrar 1 w.d.
- Obtaining the description of submitted documents
- Registration of the separate subdivision of the foreign legal entity up to 5 w.d.
- Obtaining the extract on registration of the separate subdivision of the foreign legal entity in Ukraine
- Seal production
- Registration of the foreign legal entity with the tax service from 3 w.d.
- Obtaining certificate 34-OPP (on registration as a taxpayer)
List of documents for registration of a subdivision of a foreign legal entity in Ukraine
1. Decision of the foreign legal entity on the establishment of a representative office or branch in Ukraine
2. Document confirming the registration of the foreign legal entity founder (extract from the judicial, banking or tax register)
- The validity period of such a document is 1 month
3. Document on the ownership structure of the foreign legal entity founder
4. Regulation on the representative office/branch
5. Notarized copy of the passport of the beneficial owner(s) of the foreign legal entity
6. Power of attorney to carry out representative functions in Ukraine in the name of the future head
7. Passport and taxpayer identification card of the head of the representative office
8. Power of attorney in the name of our staff — lawyers
FAQ
What state fee must be paid for opening a representative office/branch of a foreign organization?
The following fee is charged for registration of a representative office:
- 1 subsistence minimum for able-bodied persons;
- 0.28 of the subsistence minimum for able-bodied persons — if a representative office of a non-governmental or charitable organization is being registered.
Questions and comments