Opening a representative office is one of the forms for a foreign company to conduct foreign economic activity in Ukraine. At the same time, the representative office is not a legal entity and acts on behalf of and on the power of attorney of this foreign company, and also does not have the need to form the authorized capital.
Representative offices of non-resident companies can be divided into those engaged in entrepreneurial activities (profitable) on the territory of Ukraine (the so-called permanent representative offices) and those not engaged in entrepreneurial activities (not receiving profits) in Ukraine.
Thus, a permanent establishment is a permanent place of business through which business activities of a non-resident (foreign company) in Ukraine are carried out in full or in part. The permanent establishment has the right to carry out business activities, that is, it has the right to sign any contracts within the framework agreed by the power of attorney, and accordingly to receive profit, which is sent to the non-resident company.
In turn, representation without the right to conduct business can only perform representational functions in relations with customers and partners. Representative offices have the right to use buildings or structures solely for the purpose of storage, display or delivery of goods / products belonging to a non-resident. Storage of stocks of goods or products belonging to a non-resident is possible only solely for the purpose of storage and display, and also exclusively for the purposes of processing by another enterprise. Representative offices are required to maintain a permanent place of business solely for the purpose of purchasing goods / products or for collecting information for a non-resident and for a non-resident to carry out any other activities of a preparatory or auxiliary nature. Also, the representative office has the right to send to the enterprises of individuals in the framework of the implementation of agreements on services for the provision of personnel.
The representative office with the right to conduct business activity opens a hryvnia account of “type P”, which can be used for a full-fledged business activity on the territory of Ukraine, including to receive payments from buyers / clients. representative offices without the right to conduct business activities of the “type H” account, which in fact can only be used to pay the costs associated with the activities of the representative office. In addition to the current account in national currency, a representative office may open current currency accounts with authorized banks of Ukraine.
A representative office of a foreign company in Ukraine is considered open from the date of its registration. Registration is carried out by the Ministry of Economic Development and Trade of Ukraine (Ministry of Economy), after which the representative office is issued a certificate of registration. In the case of the representation of economic activity on the territory of Ukraine, such a representative office must become registered with the tax authority at its location and receive the status of a permanent establishment.
It is worth noting that in Ukraine, representative offices are more often created that do not make a profit, since a legal entity, for example, a limited liability company founded by a company, is more comfortable for conducting full-fledged business activities. non-resident.
Opening a representative office of a foreign company in Ukraine may have several advantages. Thus, a foreign company has the opportunity to finance the activities of its representative office in Ukraine without paying the profit tax from the funds received from the parent company. Also, the foreign employees of the representative office work on the basis of the issued official card of the representative of the representative office, which is issued for 3 years and gives the right to a temporary residence permit in Ukraine, thus they do not need to get permission to work in Ukraine. Representative offices also have the opportunity to import tangible assets to Ukraine (including vehicles, equipment, etc.), which are transferred by a foreign company to use the representative office, without paying customs duties and VAT (temporary admission regime, without the right of sale).
Documents required for registration of a representative office:
1) Application of the company with a request for registration of a representative office in Ukraine (executed on letterhead, the signature of the head of a foreign company is notarized).
2) A document confirming the registration of the company in the country of location (Excerpt from the judicial or commercial register, Certificate of incorporation).
3) A certificate from the bank in which the company’s account is opened, indicating the account number (the signature of the official of the bank that signed the certificate is notarized);
4) A notarized power of attorney from the company to the head of the representative office for the performance of representative functions in Ukraine.
5) Notarial power of attorney from the company to our employees with the authority to register the representative office.
6) A notarized copy of the permission of the central bank of the respective country to open an account with the right to conduct business activities to the representative office of a foreign company in Ukraine. (if it is required by the legislation of the country of registration of the foreign company).
All the above documents must be apostilled or legalized depending on the country of issue.
7) The notarial protocol on the establishment of a representative office in Ukraine and the appointment of the director of the representative office.
8) Copy of passport and identification number of the director of the representative office.
9) The lease agreement for the legal address of the representative office.
The registration period for the Permanent Mission is on average up to 2 months.