1. What is a representative office of a foreign non-profit under Ukrainian law?
Representative office of a foreign non-profit entity – a subdivision of a foreign legal entity (NGO or foundation) which got officially registered in Ukraine. Although such a rep office is inserted in the Unified State Register of Legal Entities and Individual Entrepreneurs of Ukraine, it does not possess the status of a separate legal entity.
2. What types of rep offices are available to foreign non-profits in Ukraine?
A foreign non-profit legal entity may register its representative office in Ukraine in the following forms:
- representative office of a foreign non-governmental organization (NGO);
- representative office of a foreign charitable organization.
The choice depends on the scope of activities conducted by the parent non-profit entity pursuant to its Charter. If the parent entity does charitable work, it should opt for a rep office of a foreign charitable organization. On the other hand, if the foreign entity is focused on promoting a certain public agenda, a rep office of a foreign NGO will be a more suitable option.
The registration procedure and fundamental principles of functioning are practically the same for both types of rep offices. Hence, the answers to the questions below are applicable to both of them.
3. Which documents govern the activities of a rep office?
In Ukraine, representative offices of foreign non-profits are regulated by the following acts:
- Civil Code of Ukraine;
- Tax Code of Ukraine;
- Law of Ukraine “On Non-Governmental Organization” (for NGOs);
- Law of Ukraine “On Charitable Activities and Charitable Organizations” (for charities).
The main internal document that governs the activities of a Ukrainian rep office is the “Regulations of the representative office”. The Regulations contain basic provisions on the functioning of the rep office in Ukraine and must comply with Ukrainian law.
4. What is the difference between a rep office and a separate NGO / foundation?
A foreign non-profit can establish its presence in Ukraine in two ways: by registering a representative office or by creating a separate NGO / foundation under Ukrainian law.
While an NGO / foundation is a full-fledged legal entity, a rep office does not have the status of a legal entity and possesses no separate civil capacity. This means that the rep office enters into contracts on behalf of the foreign parent entity, and the foreign entity bears full reposponsibility for the legal actions of its subdivision. Meanwhile, a separate NGO / foundation established under Ukrainian law acts in its own name, has its own separate assests and bears civil liability for its own actions.
Apart from these basic differences, there is also a set of labor, tax and internal governance distinctions between a rep office and an NGO / foundation.
5. Who is considered the founder of a rep office?
Under Ukrainian law, a representative office is established by the resolution of the foreign parent entity. Such foreign entity is the sole founder of the rep office; no other founders (participants, shareholders) may join at a later date.
6. Who can be the head of a rep office?
The head of a representative office is appointed by the foreign parent entity and inserted in the Ukrainian public Register. The head exercises his powers in Ukraine based on a power of attorney issued by the foreign parent entity.
Any person regardless of citizenship may be appointed as the head of a Ukrainian representative office. However, a foreign citizen must obtain a Ukrainian tax ID number before registering as head of the rep office.
7. Is it obligatory to employ the head of the rep office under Ukrainian labor law?
If the head of the rep office is a Ukrainian citizen, it is advisable to employ him under labor law and pay him at least a minimum monthly salary of UAH 8,000 (» EUR 180). The head may be employed either full-time or part-time. In the latter case, the head’s monthly salary may be even lower, i.e. proportionate to his hourly workload.
If the head of the rep office is a foreign citizen, you may choose one of the following options:
- to employ him in the rep office under Ukrainian labor law and pay him a salary in Ukraine; in this case, it is not required to obtain a labor permit for foreigners in Ukraine;
- to employ him directly in the parent entity under foreign labor law and pay him a salary abroad; no Ukrainian labor permit is required here as well.
8. Does a rep office need to rent property in Ukraine to use it as a legal address?
When filing for registration, a rep office must indicate a legal address which will be shown in the Ukrainian public Register. This address determines where all official correspondence from counterparties and state authorities will be sent.
The law does not require to provide the Ukrainian registrar with ownership title documents or lease agreements on the property stated as the rep office’s legal address.
9. Are rep offices obliged to have an official seal?
A seal is not mandatory for a rep office under Ukrainian law. However, some rep offices voluntarily choose to use a seal in their activities. A rep office may order a seal from any seal-manufacturing company; no special permits are required.
10. Documents required to register a rep office
As a rule, the following documents are required to file for registration of a rep office:
- filled-in application form;
- resolution of the foreign entity on setting up a representative office in Ukraine;
- regulations of the representative office;
- an up-to-date excerpt on the foreign parent entity from its national commercial, banking, court or other register;
- ownership structure;
- copy of UBO passport(s);
- power of attorney for registration purpuses.
Some of the above documents may require additional notarization & apostille/legalization, depending on the circumstances.
11. Who can file documents for registration of the rep office in Ukraine?
Under Ukrainian law, only two categories of people may act as representatives of a foreign entity for the purposes of registering a rep office:
- an attorney who is admitted to the Ukrainian bar and practices law individually;
- a person registered as a Ukrainian individual entrepreneur, whose main type of activity, according to the public Register, is the provision of legal services.
12. What is the timeline for official registration of a rep office?
The state registration of a representative office in Ukraine takes up to 5 business days from the date of filing. However, the registrar may refuse to register the rep office if certain documents are missing, incorrect or contradict Ukrainian law.
After the rep office is successfully registered, the foreign parent entity must also file for registration with the Tax Office of Ukraine. This is a separate procedure that usually lasts several days.
13. Can the rep office open a bank account in Ukraine?
Once the rep office is officially registered, it may open a bank accounts in Ukrainian banks. Usually, the head of the office personally visits a bank branch where he undergoes identification and signs various banking papers.
The scope of KYC documents requested by the bank varies depending on the particular bank’s compliance policy. We recommend checking KYC requirements in advance with your bank of choice.