Legalization in Ukraine through business (the founder of the company)

More than 3 months (since 27.09.17) passed, as the new rules for obtaining temporary residence permits in Ukraine came into force. For ease of reading, we highlight the main points and give them a description.
We will describe 3 groups of investments, and consequences depending on the size of such investments:

1) If the share in the authorized capital of the Ukrainian company is -100,000 euros
For whom - for founders (participants), beneficiaries (controllers) of a company registered in Ukraine, whose share of ownership is 100 000 euros, it is simpler to say that one person should have 100 000 euros, if the founders are 2, respectively 200 000 euros (if both will apply for a temporary residence permit in Ukraine on the basis of investments)

At which rate should the equivalent in euro be converted - at the rate of the NBU at the date of making a foreign investment

Who are the beneficiaries (controllers) - are physically persons like those who alone or together with related individuals own a share in the Ukrainian legal entity in the amount of 25 or more percent of the authorized capital and those that have the ability to exercise decisive influence on management or economic activity of legal entity (do not have 25%, but actually have influence). A full definition can be found in article 20, part 1, Article 1 of the Law of Ukraine "On the Prevention and Counteraction to Legalization (Laundering) of Proceeds from Crime, Financing of Terrorism and Financing the Spread of Weapons of Mass Destruction."

The Inspector of the State Migration Service will not certainly investigate who is the beneficiary in a company, since the data on beneficiaries (controllers) are mandatory to be included on the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Associations. Data from the register on such beneficiaries (supervisors) are sufficient for the Migration Service to issue temporary residence permits in Ukraine to such beneficiaries (controllers). Documentary evidence of the correctness of the indication of the beneficiaries (controllers) is necessary for the banking institutions in which the company opens current accounts.

The validity of a temporary residence permit in Ukraine on the basis of investments is 2 years

 Obtaining a work permit in your company is required if the foreigner plans to work in the company, and not only to exercise control over its activities. If he does not plan to work in the company (meaning within the framework of labor legislation), but wants only to exercise control over it, than foreigners can obtain temporary residence permit for 2 years, and work permit is unnecessary. Another issue is that, that it is possible to work (provide services) for the company on the basis of a civil legal agreement that a foreigner (having registered before himself as an entrepreneur (FOP)) can conclude with his own company, but this is another topic, since there are signs on which civil- legal contract can be equated to the availability of labor relations with the corresponding negative tax consequences.

The form of investment and its confirmation - the money form, equivalent of which is confirmed by the information on the NBU rate on the date of transfer of the investment (the inspector independently receives from the site of the NBU) + a copy of the company's charter; movable property, is confirmed by a copy of the cargo customs declaration + the act of handover of such a contribution to the authorized capital in the form of property; movable or immovable property acquired in Ukraine and transferred as a contribution to the authorized capital, is confirmed by a copy of the act of handover; shares (if the share of a foreigner is in a joint-stock company) is confirmed by an extract from an account in securities

The extension of the temporary residence permit is extended for the same period - for 2 years, but only in case if the foreigner can confirm employment in the company of at least 3 Ukrainian citizens who must start work at least 6 months before the date of the application for the extension temporary residence permit or confirm the payment (by company) of income tax for the previous year before the circulation date in the amount of 50 minutes of salaries (min. from 01/01/2018 is 3,723 UAH)

2) If the share in the authorized capital of the Ukrainian company is up to 100,000 euros

For whom - for the founders (participants) whose share of property is less than 100 000 euros, it is easier to say any other size, even 1 hryvnia

At which rate to convert the equivalent in euros - the size of the share capital does not matter

The validity of a temporary residence permit in Ukraine is valid for a period of validity of a work permit

 Obtaining a work permit in your company - yes, it is required and issued for a period of 6 months to 3 years

The extension of the temporary residence permit is carried out only after the work permit is renewed, no confirmation of the employment of Ukrainians or about the paid profit tax is required.

Payment of wages - since the submission of a contract, which must be concluded with an foreigner within 3 months after the issuance of a work permit, respectively, after the submission of the contract, wages must begin to be paid.

3) If the share in the authorized capital of a Ukrainian company is not less than USD 100,000
When comparing two grounds for legalization in Ukraine ($ 100,000 and right to get permanent residence permit and 100,000 euros and right to get a temporary residence permit in Ukraine for 2 years) it is obviously, that with a smaller amount ($ 100,000), more benefits. After receiving a permit for immigration, a foreigner will receive a permanent residence permit, so he/she can work in any company, and not only in his, without work permits.
    It should be taken into consideration that obtaining a permit for immigration to Ukraine is a quota category, which means that there is a certain number of foreigners who can obtain immigration permission on the basis of investments. Such a limit is established annually by the CMU, although in 2017, the Cabinet of Ministers did not limit this category, it is obvious that in 2018 we also do not await any quantitative restrictions in comparison with obtaining permission for immigration by relatives (brothers, sisters, grandparents, etc.) .) As of the date of this article, the Resolution of the CMU on quotas for 2018 is not yet adopted.

The form of investment is only monetary, and the legislation of Ukraine does not require any registration of investments.


Sotnyk Tatyana