REGISTRATION OF A REPRESENTATIVE OFFICE OF A FOREIGN COMPANY

A representative office of a foreign company is created to represent the interests of the parent foreign company on the territory of Ukraine. The representative office does not have the status of a legal entity. Representative offices can be divided into two types:

• who conduct business activities and make a profit (permanent),
• who are not engaged in economic activities on the territory of Ukraine and receive certain funds only from the parent company.

Permanent representative offices must be registered as taxpayers and pay taxes in accordance with the laws of Ukraine. Representative offices of foreign companies not conducting commercial activities receive non-profit status.

A representative office is registered by the Ministry of Economy of Ukraine within 20 working days.

The OGP company, led by professional lawyers, provides services for registering a separate division of a foreign legal entity.

Additional payments

Administrative fee – 3028 UAH (from January 1, 2024).

Translation services with notarization – 1000 – 5000 UAH;

Production of a seal – 500 UAH;

Providing a legal address - by agreement (depending on the region and city);

Shipping of documents is additionally charged.

Documents and information required for registration of a representative office of a foreign legal entity

1. An extract from the trade or court register about the registration of a foreign legal entity.
2. Certificate from the bank about opening an account for a foreign company.
3. Power of attorney for the head of the representative office for the implementation of representative functions in Ukraine.
4. Payment document confirming payment of the administrative fee for registering a representative office.
5. Information about: location, number of employees, scope of activity of the representative office, etc.

Benefits received by the client when opening a representative office

1) Ease of management, since the representative office is directly subordinate to the foreign company.

2) Possibility of obtaining a temporary residence permit for employees of the representative office.

3) The ability not to pay taxes to a representative office with a non-profitable status.

4) No need to obtain a work permit for foreign workers.

5) The cost of the fee for registering a representative office has been reduced from $2,500 to 1 subsistence level.

6) The ability to finance entertainment expenses directly through transfers from a foreign company.

Additional services

1. Obtaining a temporary residence permit. Employees of a representative office of a foreign company can obtain a temporary residence permit on the basis of service cards.
2. Cancellation of registration of a representative office. The activities of a representative office may be terminated by decision of the parent company or upon liquidation of the parent company.
3. Obtaining a tax code for a non-resident. Relevant for the foreign manager of a representative office.
4. Accounting. An obligatory component of the activities of representative offices of foreign companies, especially with permanent status.
5. Registration of service cards for foreign employees of the representative office. Service cards for foreign employees of a representative office are a type of work permit issued for a period of up to 3 years.
6. Registration of a limited liability company. Opening a company is a necessary stage in development on the Ukrainian market.

Legal aspects

According to the Tax Code of Ukraine, permanent representative offices can conduct business activities and make a profit. The scope of activity of a permanent representative office can be different: activities at a construction site, consulting services, services for signing and agreeing on contracts with a foreign company, representative office, warehouse, factory or workshop, server, etc. A representative office without the status of “permanent”, not engaged in commercial activities, cannot conduct business activities and can only receive finance from the representing parent company. The activities of such representative offices may be as follows: use of territories or buildings for storing or displaying goods, equipment, as well as for processing goods by Ukrainian enterprises; maintaining an office for purchasing and collecting information; participation in services to provide personnel from a foreign company to a Ukrainian entity.

Responsibility for conducting activities by a foreign company through its representative office without registering for tax purposes entails a fine of 100,000 hryvnia.

It should be noted that legislative changes have been adopted regarding the activities of separate divisions of foreign enterprises. Thus, registration and termination of registration of such divisions will be carried out by state registrars on equal terms with other Ukrainian legal entities, data on the representative office will be entered into the Unified State Register with the assignment of the appropriate code, representative offices of companies that are residents of the aggressor state will be prohibited, etc. The above changes will come into force from 09/03/2024.

FAQ

How to confirm the legality of documents of a foreign company when registering a representative office?

All documents submitted in addition to the application must be notarized at the place of issue and properly legalized at the consular offices.

Do I need to report changes in representation if the parent company has changed its name and address?

Yes, the representative office is obliged to report such changes to the Ministry of Economy within 7 days.

Are there any requirements for an extract from the trade register of a foreign company?

Yes, the main requirement is that this extract be submitted to the Ministry of Economy no later than 6 months from the date of its issue in the country where the parent company is located.

If a foreign company has several permanent representative offices, how to register as an income tax payer?

In such a situation, the income tax payer of the parent company registers at the location of its permanent establishment, which was created first.

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