On 3 September 2023, the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine on Regulation of Activities of Separate Subdivisions of a Legal Entity Established in Accordance with the Laws of a Foreign State” No. 3257-IX dated 14 July 2023 (“Law“) came into effect.
Key highlights
The Law is developed to streamline various aspects of the state registration and liquidation procedures for representative offices and enable the establishment of full-fledged branches of foreign companies operating in Ukraine. The majority of its provisions pertaining to the changes detailed below will become effective from 3 September 2024.
Key provisions:
The Law introduces several noteworthy changes in relation to branches and representative offices of foreign companies in Ukraine, as follows:
- State-registration related changes:
- The authority for the state registration of representative offices will be transferred from the Ministry of Economy of Ukraine to state registrars.
- The time frame for state registration will be reduced from 20 business days to just 5 business days.
- The exclusive set of documents and information required for state registration of a representative office will be defined in the law. Representative offices will now be required to have a statutory document (regulation) and submit information on the ownership structure of the founding foreign company and details about its ultimate beneficial owner to the state registrar.
- Similar to legal entities, the principal information on foreign branches and representative offices will be generally accessible in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations.
- Additional changes:
- Ukrainian law will prescribe the liquidation procedure for branches and representative offices, which is similar to the liquidation process for legal entities. Where there are insufficient funds to meet creditors’ claims during the liquidation process, the liquidation commission will be authorized to sell the assets of a branch or representative office. If the value of underlying assets proves to be insufficient, creditors will have the right to seek satisfaction from the assets of the founding foreign company.
- Certain amendments related to the regulation of branches and representative offices of foreign banks will be introduced into the Law of Ukraine “On Banks and Banking Activities.”
- The Cabinet of Ministers of Ukraine is responsible for transferring information on the existing branches and representative offices of foreign companies from the Ministry of Economy to the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations.