Before you can begin working in Ukraine, the first step is to establish a subsidiary that will allow you to conduct business in the country legally. The Ukraine subsidiary setup process differs by location and entity type and can take anywhere from a few weeks to a few months.
However, G-P offers an alternative. With us as your Employer of Record (EOR), companies can bypass entity setup and begin hiring in minutes.
How to set up a Ukraine subsidiary
Understanding how to set up a Ukraine subsidiary starts with answering questions about your company and business goals. Different regions in Ukraine can operate under separate laws and processes that impact the incorporation process. You should research the area where you want to base your physical location to ensure the culture and regulations work for your company.
The Ukraine subsidiary setup process also depends on the type of entity you incorporate as. While a limited liability company (LLC) is the most popular type of subsidiary, you can also incorporate as a joint stock company, a representative office, and more. The steps to incorporate as an LLC include:
- Deciding on the establishment of the company through a meeting held by the shareholders’ representatives before a notary public.
- Designating a registered office address.
- Executing the company’s charter and other constituent documents before a notary public.
- Registering the company, through the state registrar officer or the notary public acting in this capacity.
- Opening a permanent bank account in the country.
- Registering with the state tax authority or the district tax office.
- Obtaining a VAT number.
Ukraine subsidiary laws
Ukraine’s economic volatility and constant legislature changes are often challenges for companies that need to adjust to the country’s subsidiary laws. Since Ukraine’s bureaucracy features complex laws, we recommend spending a significant amount of time learning the laws and resources necessary to set up a subsidiary successfully.
Although the laws depend on the entity, LLCs need 1 director and 1 individual shareholder to complete the process. The law neither sets the minimum amount of an LLC’s authorized capital nor limits the number of its participants. After the incorporation, the LLC’s founders must pay off the authorized capital in a period of 6 months, unless they unanimously agree on a more extended period.
Every director of the company needs to be able to work in Ukraine and must obtain a work permit before you can promote them. You can either promote an existing company executive or hire a local professional who is already able to work in the country. Despite this requirement, an LLC offers the simplest setup process. You do not have to comply with any auditing requirements as an LLC, which can save you time when filing taxes.
The establishment and registration costs of an LLC with international participants include notary and translation charges. All documents issued internationally must be apostilled, translated into Ukrainian, and notarized.
Benefits of setting up a Ukraine subsidiary
The biggest benefit of setting up a Ukraine subsidiary is that you can start working in a new country. If you choose to incorporate as an LLC, both the subsidiary and parent company can benefit. The subsidiary will be able to operate independently from the parent company and create its own company culture and policies, while the parent company will not have to worry about taking on liability from the subsidiary.
Instead of learning all of Ukraine’s subsidiary laws, you can choose to work with G-P for even more benefits. We’re a global EOR and have subsidiaries all over the world, including Ukraine. When you partner with us, you won’t have to go through the lengthy and expensive subsidiary process. Plus, we’ll make sure you stay compliant every step of the way.
Other important considerations
If you choose to establish a Ukraine subsidiary alone, you’ll need to set aside plenty of time to complete the process. Make sure you have time to fly back and forth to Ukraine or appoint another company executive to handle the travel time for you. You also have to budget the right amount of money for an expansion. It’s a good idea to work with your finance team ahead of time to figure out how much the setup process will cost.
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