News from law industry and special articles from Alter
𝗩𝗜𝗦𝗔 𝗗 𝗔𝗣𝗣𝗟𝗜𝗖𝗔𝗧𝗜𝗢𝗡
According to Ukraine’s Visa Rules all applicants should provide the 𝗳𝗼𝗹𝗹𝗼𝘄𝗶𝗻𝗴 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝘀 in order to apply for their visa: 𝟭) a passport document that should meet the following requirements: - be valid for at least 3 months after the intended date of departure from the territory of Ukraine; - have at least 2 free pages; - be valid for no more than 10 years; 𝟮) a filled in and signed visa application form. 𝟯) one applicant`s color photograph 35 * 45 mm; 𝟰) a valid medical/travel insurance policy with coverage of at least 30,000 euros or equivalent in another currency, unless otherwise provided by law or international treaties of Ukraine. Holders of diplomatic/service passports are exempt from this requirement; 𝟱) documents confirming the availability of sufficient financial support for the period of the planned stay and for returning to the state of origin or transit to a third state or the possibility to obtain sufficient financial support legally in the territory of Ukraine in accordance with the Procedure for Providing Sufficient Funds by Foreigners and Stateless Persons Entering, Staying in, Transiting through or Leaving Ukraine approved by the Decree of the Cabinet of Ministers of Ukraine no.884 of 4 December 2013. For example, bank statement for 2 recent months, cash in Ukrainian hryvnia/other convertible currency, bank cards along with current/savings account balance statements provided the bank cards can be cashed in Ukraine, hotel/accommodation booking, letter from the applicant’s employer/sponsor confirming their coverage of applicant’s expenses in Ukraine, a return/transit ticket etc. Holders of diplomatic/service passports are exempt from this requirement; 𝟲) a document confirming the payment of the consular fee, unless otherwise provided by the legislation or international agreements of Ukraine. Ukraine’s Embassies/Consulates abroad charge $𝟲𝟱.𝟬𝟬 (basic visa fee) for processing visa applications via regular service. In addition to the abovementioned documents, a document confirming the purpose of the trip to Ukraine (depending on the type of visa applied for) is to be provided. For 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 (𝗗 𝘁𝘆𝗽𝗲) 𝘃𝗶𝘀𝗮𝘀 this may be one of the following: - a certified copy of the work permit for foreigners and stateless persons. Foreigners / stateless persons exempt from the requirement to obtain a work permit in order to be employed in Ukraine are to provide a copy of the work contract. Persons of Ukrainian descent are to provide their certificate of a person of Ukrainian descent and a copy of the work contract. - a copy of the immigration permit issued by a local office of Ukraine’s State Migration Service; - document(s) confirming that the applicant is a family member of a foreigner/stateless person who has been granted refuge/temporary protection in Ukraine. Certificates issued by foreign countries should be apostilled (legalized) and translated into Ukrainian as well as duly certified; - invitation letter issued by a relevant Ukraine’s state authority/entity/organization which is a recipient of international technical assistance project as well as a confirmation of the registration of the relevant international technical assistance project; - invitation letter issued by a religious organization duly registered in Ukraine for a long-term performance of religious/missionary/canonical activities accompanied by a letter issued by Ukraine’s state authority which has registered that religious organization (e.g. Ukraine’s Ministry for Culture / Department on Religious Matters of the relevant regional or city state administration); - invitation letter issued by a foreign non-governmental organization (branch / office) duly registered in Ukraine; - invitation letter issued by a foreign company duly registered in Ukraine; - invitation letter issued by a branch of a foreign bank registered in Ukraine; - invitation letter issued by a branch of a foreign Mass Media duly registered in Ukraine with a request to issue a visa to the Mass Media staff member; - official letter/verbal note issued by a relevant foreign state authority/foreign diplomatic mission/international organization (office) with a request to issue a long-term visa to the mission/organization (office) staff member as well as her/his family members; - invitation letter issued by Ukraine’s relevant government authority which implements respective cultural, educational, scientific, sport or volunteering programs or an invitation letter issued by an entity/institution/organization engaging volunteers in their activities accompanied by the copy of that entity/institution/organization’s state registration certificate; - document(s) confirming that the applicant is a family member of a foreigner/stateless person residing in Ukraine upon a temporary residence permit accompanied by a copy of that foreigner/stateless person’s temporary residence permit as well as proof of that foreigner/stateless person’s sufficient funds to cover applicant’s expenses in Ukraine. Certificates issued by foreign countries should be apostilled (legalized) and translated into Ukrainian as well as duly certified; - other documents (if stipulated by Ukraine’s international treaties).
𝗟𝗶𝗺𝗶𝘁𝗲𝗱 𝗟𝗶𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗖𝗼𝗺𝗽𝗮𝗻𝘆 𝗥𝗲𝗴𝗶𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻
LLC is the most popular form of business structure in Ukraine. 𝗣𝗿𝗲-𝗿𝗲𝗴𝗶𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝗮𝗿𝗿𝗮𝗻𝗴𝗲𝗺𝗲𝗻𝘁𝘀: 𝟭. Deciding on a proper name of a future company. It cannot be similar to the name of the other company. 𝟮. Choosing legal address for the company. It must be registered in Ukraine in order for the company to conduct business. It can be place of rent or legal address for company can be bought. 𝟯. Choosing appropriate economic activities under the Classification of Types of Economic Activity. There should be one main activity and other additional types. 𝟰. Deciding on the number of shareholders. Law does not limit the number of shareholders. All shareholders must be listed in the Charter. 𝟱. Deciding on share capital. No minimum share capital specified by law. Allocation of shares to the members according to their contribution to capital. 𝟲. Drafting a Charter of LLC. It includes provisions on incorporation of the company, its activities, governance, and dissolution. 𝟳. Holding a meeting of members of LLC. During the meeting the decision on incorporation is made, charter is approved, director and representative are chosen, and responsible individuals for state registration are appointed. The outcomes of the meeting take form in the Minutes of the General Meeting of Members. If there is only one founder, the above mentioned document is called the Decision of the Founder. Note that if director is a foreign citizen, he must obtain work permit and temporary residence permit. 𝟴. Drafting application on registration of the company. 9. Obtaining tax id for non resident and translation of passport. 10. Hiring Ukrainian director till non-resident won’t get work permit to obtain position of director. 𝗥𝗲𝗴𝗶𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻: 𝗦𝘁𝗲𝗽 𝟭. 𝗣𝗿𝗲𝗽𝗮𝗿𝗶𝗻𝗴 𝗻𝗲𝗰𝗲𝘀𝘀𝗮𝗿𝘆 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝘀. 𝗥𝗲𝗾𝘂𝗶𝗿𝗲𝗱 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝘀 𝗳𝗼𝗿 𝗿𝗲𝗴𝗶𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻: · Application for registration. · Application for choosing the type of taxation system. For example the simplified taxation system. · Original (or notarized copy) of the Minutes of the General Meeting of Members or the Decision of the Founder. · Two originals of the Charter of LLC. · Authorized copy of the passport of the founder. · Authorized copy of the tax ID number of the founder. · List of types of economic activities of the future company. · Power of Attorney, if registration is performed by a representative. 𝗔𝗱𝗱𝗶𝘁𝗶𝗼𝗻𝗮𝗹 𝗱𝗼𝗰𝘂𝗺𝗲𝗻𝘁𝘀 𝗿𝗲𝗾𝘂𝗶𝗿𝗲𝗱 𝗳𝗼𝗿 𝗳𝗼𝗿𝗲𝗶𝗴𝗻 𝗶𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹𝘀-𝗳𝗼𝘂𝗻𝗱𝗲𝗿𝘀: · Authorized copy of the passport. · Authorized copy of the individual tax ID number, issued for a foreign citizen, which is compulsory for conducting business in Ukraine. · Power of Attorney, if registration is performed by a representative. Additional documents required for foreign legal entities-founders: · reference from the Company Register or other document issued by government authorities from the host country of the entity. · Originals of the Memorandum and Articles of Incorporation or the Company Charter or the Company Constitution. · Authorized copy of the Decision on appointing the legal entity a founder of a new company. · Power of Attorney if registration is performed by a representative. All documents must be filed in Ukrainian, and foreign documents must be legalized or apostatized. If documents compiled in other language than Ukrainian, a certified translation has to be provided. 𝗦𝘁𝗲𝗽 𝟮. Filing the documents for the LLC registration with the State Registry of Legal Entities, Private Entrepreneurs and Public Formation. You will receive a document containing description of filed documents and application filling number with what you can check the status of the registration on website of the Companies Register. 𝗦𝘁𝗲𝗽 𝟯. After successful registration of LLC you obtain an Reference, the so called Company Profile, from the Companies Register confirming registration of LLC through the Registration Portal. You can also obtain a paper copy of this document. 𝗦𝘁𝗲𝗽 𝟰. Ordering a company seal. Copy of reference about registration of the LLC is required for the seal-making company. However, seal is not strictly required by law. 𝗦𝘁𝗲𝗽 𝟱. Registering LLC with the tax authorities by filing necessary application with the relevant office corresponding to the registered address of the company. 𝗦𝘁𝗲𝗽 𝟲. Registering LLC with the tax authorities responsible for administration of social security tax on hiring each employee. 𝗦𝘁𝗲𝗽 𝟳. Opening bank account for LLC company. 𝗦𝘁𝗲𝗽 𝟴. Making contributions in full to the share capital by all shareholders with respect to their individual shares. It must be done within 6 months period upon LLC registration. 𝗦𝘁𝗲𝗽 𝟵. Establishing accounting policy of the company and appointing an individual responsible to conduct accounting on behalf of the company. There is no administrative fee for registration of LLC company. The decision on registration is made within 24 hours. Terms of registration: 3 days. Opening bank account 5 days. Term of getting tax id - 1 week. Work permit if non resident wants to obtain position of Director and get visa he needs to get work permit. Work permit can be provide for 1 year or 3 years. Government fee for 1 year - 350 EUR, for 3 years - 470 EUR. Law firm fee is 300 EUR. Term of service: 2-3 weeks On basis of work permit non resident can obtain Visa d and temporary residency permit for 1-3 years with possibility to renew. Obtaining visa D will take 3-10 days Temporary residency permit (TRP) TRP gives right for non-resident to stay in Ukraine more than 90 days. On basis of TRP non-resident can stay in Ukraine for 1 - 3 years. Fee for TRP is 500 EUR (including registration address for non-resident) Term of service: 3 weeks. Costs: Registration of company : 300 EUR. Legal address 150 EUR (for 1 year). Tax id 100 EUR. Work permit: 300 EUR. Government fee for work permit: 300 - 400 EUR (depends on term of permit). Temporary residency permit: 400 EUR. Registration address for non-resident 150 EUR (for 1 year). Notary services: 300 EUR ( for 1 founder non-resident). Expenses for Ukrainian director and for changing director: 300 EUR Total cost: 2 200 EUR.
New partnership ALTER with DEVTEAMRADAR
Most of the software development businesses or startups that are willing to relocate to another country or sign an agreement with an international partner get their legal support from Alter LLC, the law firm that provides software development teams and startups with full-cycle legal support including company creation, intellectual property regulation and trademark registration, tax, agreements drafting and many other services. Alter Service is one of the leading law firms with an internal perspective that from now on supports DevteamRadar.com. Write to us and we will help you to create new software services or relocate your e-business.
Immigration permit for IT specialists to Ukraine
Ukrainian IT market is one of the biggest in Eastern Europe and shows a very promising future. A big number of outsourcing and product companies, as well as start-ups are responsible for booming tech sector and great potential of Ukrainian software engineering. The government supports the IT sphere and is interested in attracting foreign professionals to Ukraine by introducing the immigration quotas for IT specialists. Among the advantages of our country are high salary, only 5% tax rate for IT, low prices, and of course tasty national food, good climate and beautiful nature. Immigrating within the quota means no need to be tied to a specific company or work position, freedom of employment, possibility of individual entrepreneur or company registration, freedom of travel from and to Ukraine, priority right to obtain Ukrainian citizenship. Sounds interesting? Check your eligibility below. ![text](/uploads/e4fdfb5d495249e5bb9ff523e4e33aba.png) Documents required for obtaining an immigration permit 1. application; 2. 3 photographs (3,5 x 4,5 cm); 3. copy of applicant’s passport; 4. document certifying applicant’s residence; (registration address) 5. Confirmation of payment of the state duty. 6. document certifying that an applicant is not afflicted with chronic alcoholism, toxic substance or drug abuse, active tuberculosis, and other infectious diseases (such as sexually transmitted diseases, HIV, hepatitis A, B, C etc.). This statement of good health may also be obtained in one of the Ukrainian medical institutions. 7. certificate about absence of convictions issued by the competent authority of the applicant’s country of former residence or its diplomatic mission in Ukraine; 8. proven work experience in IT (over 3 years). Cybersecurity manager: over 7 years of work experience in IT including at least 4 years of work experience in lower management. Senior developer: over 7 years of work experience in IT including at least 4 years of work experience on a senior position. CTO: over 8 years of work experience in IT including at least 5 years of work experience in management. 9. Bachelor’s degree OR Master’s degree OR Doctoral degree in math/computer studies. Only for a senior position: Master’s degree OR Doctoral degree in math/computer studies. Only for a cybersecurity manager: Bachelor’s degree in any field of studies. Only for cybersecurity positions: certificate of general secondary education. 10. Only for cybersecurity positions: one of the certificates CISSP, CISA, CISM, ITIL Master, CompTIA Security+. 11.For persons who ahs no diploma balance statement with income of 24 000 usd per previous 3-12 months will be enough. Documents must be translated into Ukrainian, certified in accordance with the legislation of the country of issue and legalized (Alter LLC will provide its help in this matter). Application review period: 4-6 months upon submission of the application. Validity period: one year upon issuance date of the immigration permit. After obtaining an immigration permit, the applicant must apply for a permanent residence permit. Documents required for obtaining a permanent residence permit 1. application; 2. applicant’s passport with visa type “D” and its copy; 3. ID document of legal representative and document confirming powers of a person as a legal representative, in case of submitting of documents by such person and its copy; 4. Ukrainian translation of pages of applicant’s passport containing personal data, notarized; 5. copy of the decision on granting the immigration permit; 6. confirmation of payment of the administrative service fee and state duty. Application review period: less than 1 working day. Validity period: 10 years (subject to future exchange). Residence permit allows you to reside and work legally in Ukraine and enjoy all rights granted by the Constitution to the citizens (except for the right to vote, hold office in the state institutions and perform military service). Got any questions? Contact Alter LLC and we will help you out.
Investment in a construction project
Interested in buying an apartment from a development company in Ukraine? This may be a great deal: a brand-new apartment, lower price, and less taxes to pay. Key aspects: ▪️The process is an investment as you are not buying the apartment itself but investing in its construction. You will get your property rights to the apartment after the commissioning of the building. ▪️The main risk lies in the developer’s failure to finish the construction project. Therefore, due diligence is a must. It includes a check of: the developer and its affiliates; permits and licenses; documents to the land plot, its designated use; specifications and construction documents. There is a number of unfinished construction projects, so the image of the developer and its affiliates (taking into account their previous projects) speaks for itself. ▪️There is a tendency of postponing the commissioning date, usually, for 1-2 years. Sadly, no penalty for a developer is in place. ▪️ Ukrainian tax ID is required. ▪️ The earlier you invest, the lower the price will be. ▪️ Types of payment: a discount for a 100% payment; a down payment (20-50%) and further payment in installments until the building is commissioned; a down payment and a bank loan (with a high interest rate (15-29%) up to 20 years). A bank loan is the worst option due to a massive overpayment. ▪️ Payments are made from a current or investment account in a Ukrainian bank or from an account in a foreign bank. ▪️ Taxes are paid only when signing the master agreement after the commissioning of the building. Taxes include a Fee to the Pension Fund (1%) and a State duty (1%). You will also pay notary fees, bank charges for the funds transfer and a state fee for registration of the title to the apartment. ▪️ The process includes: signing and notarizing the preliminary agreement subject to a full payment (or a down payment, if applicable) – waiting for the construction to be finished and for the building to be commissioned (and paying in installments the remaining amount, if applicable) – signing and notarizing the master agreement, paying the taxes and registering the title to the apartment. Contact us for legal advice and due diligence!
Sale and purchase of property
Are you a foreign national who is planning to purchase or sell property in Ukraine? Let’s take a look at some important details. Key aspects: • Foreign nationals have almost the same rights and obligations concerning the sale and purchase of property as Ukrainian citizens. • Foreigners are only prohibited to buy agricultural, state, and communal land. And some limitations also apply to non-agricultural land plots. • Ukrainian tax ID is required. • The process includes: property search (may involve real estate agencies with commissions to be paid (1-5%, usually payable by the Purchaser)) – due diligence of property (checks of the state registers, technical inspection, seller’s check etc.) – property appraisal – presale Agreement and its notarization – Sale and Purchase Agreement – payment of the necessary taxes and fees – notarization of the Agreement – payment of property price to the Seller – state registration of property rights (done by the notary). The whole process may be done by the representative acting under the Power of Attorney. Taxation: 1. Fee to the Pension Fund – 1%. Payable by the Purchaser. 2. State duty – 1%. Payable by the Parties. 3. Income tax (payable by the Seller): - 0% if the Seller has had such property in a possession for over 3 years and it is his first sale of such property in a calendar year, or if property intended for sale is inherited. These exemptions apply to foreign nationals and residents of Ukraine. - 5% if the Seller is a resident and the above-mentioned exemptions do not apply. - 18% if the Seller is a non-resident and the above-mentioned exemptions do not apply. 3.1. Military tax – 1,5%, payable only if the tax rate of the income tax is above 0%. Payable by the Seller. 4. Notary fees. Payable by the Parties. Tax base is the sale price of the property, indicated in the agreement, or the appraisal price of the property if it is higher than the sale price. Usually, the Parties negotiate the amount of the taxes to be paid by each of them, taxes may be split, or the main burden may lie on the Purchaser. Contact us for more information!
Dividend payout for individuals
Are you planning to distribute the profits of the Ukrainian company you own? Let’s take a look at the process of the dividend payout. Key aspects: - Dividend payout may be done once in a quarter; however, you may choose to do it for any time period divisible by quarter, e.g. once a year or once in three years – the time frame is flexible. - Dividends are paid only out of the net profit of the company. - Payout is possible after presenting the company’s balance sheet to the tax authorities. - The process is authorized by the decision of the general meeting of the shareholders of the company. - Dividends are distributed in proportion to the shares in the statutory capital of the company owned by each shareholder. Taxation: The company acts as a tax agent while distributing dividends to individuals-shareholders. The tax means the individual income tax rate applied to any income (including dividends) received by an individual (both resident and non-resident). The tax rate on dividends is: - 9% of the number of dividends to be paid for companies on a simplified tax regime. OR - 5% of the number of dividends to be paid for companies on a general tax regime. - AND Military tax of 1,5% of the number of dividends to be paid. Note that for non-residents international agreements concerning the avoidance of double taxation may be applied. Contact us for any questions – we will be happy to guide you through this process!
Foreigner = individual entrepreneur
Is it possible for a foreigner to be registered as an individual entrepreneur in Ukraine? Absolutely! Status of IE authorizes a person to conduct business activities, open a bank account, receive profit, and pay taxes legally. Advantages of IE include a simple registration procedure, minimum paperwork, simplified accounting and reporting, and great overall flexibility. IE is a popular form of business organization in Ukraine. Why so? Largely owing to a favorable tax regime. IE may choose to apply a simplified tax regime through one of four tax groups available and, therefore, pay considerably lower taxes. Let’s take a look at the most widespread type (IE on the 3rd tax group), which is suitable for almost any business activity, especially in the IT-sphere. Key aspects for such IE: - Annual income up to 7 million UAH (approximately 250 000 USD); - 5% of the gross income (for a VAT non-payer) or 3% of the gross income (for a VAT payer); - Social security tax (now 1320 UAH, approximately 50 USD); - Quarterly tax payment and reporting; - May employ any number of employees. So, what are the requirements for a foreigner: - Legitimate grounds for being in Ukraine (appropriate visa or entry stamp (if there is a visa-free regime), or temporary/permanent residence permit); - Ukrainian tax identification number (the procedure for obtaining a tax ID is simple, usually takes up to 5 business days); - Local address (may be confirmed by a lease contract, title to any property, or registered address); - Ukrainian translation of a passport. Note that the status of IE is not itself a legal ground for obtaining a temporary or permanent residence permit. Registration takes 1 business day, may be done by a representative under a power of attorney. Don’t hesitate to contact us for further information.
Virtual currency service provider license in Estonia
A company with a Virtual Currency Service Provider License may engage in the following activities: 1️⃣ Exchange of virtual currency for fiat currency; 2️⃣ Exchange of fiat currency for virtual currency; 3️⃣ Exchange of virtual currency for another virtual currency; 4️⃣ Storage of virtual currency on behalf of its clients; 5️⃣ Transfer of virtual currency between wallets; 6️⃣ Storage of fiat currency on behalf of the client for a period of time for the purpose of the subsequent exchange for virtual currency. Corporate income tax = 0% if the profit of a company is not distributed. Requirements for a company license holder: ▪️The share capital of minimum 12,000 euros; ▪️A physical presence in Estonia, including office and active management board members residing in Estonia; ▪️A local Director / AML officer representing the company before the Financial Intelligent Unit; ▪️A corporate account in the payment system/bank that is registered in the EEA authorized to make cross-border transfers to the territory of Estonia; ▪️Non-criminal records extract for all members of the company from all countries of citizenship; ▪️CVs and education information for all members of the company. We provide the following services: 1. Company registration and obtaining a Virtual Currency Service Provider License (in two stages) 2. Purchase of a ready-made company with a Virtual Currency Service Provider License It takes approximately 60-90 calendar days to re-register a company upon the receipt of the necessary documents from you.
Doing business in Ukraine
1. Business registration Limited Liability Company is the most popular form of business incorporation in Ukraine. Key aspects: • No minimum share capital; • Minimum one founder; • Individuals and legal entities, including foreign ones, may be founders, although a foreign individual must obtain a Taxpayer identification number; • No restriction concerning citizenship of the Director, although a foreigner must obtain a work permit and a temporary residence permit; • Local registered address is required; • The use of company seal is not mandatory; • Suitable for almost any economic activity; • Incorporation may be done by a representative acting on behalf of the power of attorney; • No state fee for incorporation. Incorporation procedure: 1. Deciding on the unique name of the company, its legal address, economic activities, number of founders (members), amount of share capital, director, preferable tax system; 2. Drafting the Charter of the company, holding the meeting of the members of the Company and signing the Minutes of the general meeting of members, filling in the application form; 3. Incorporation of the company (at the notary or state registration body), including registration with the tax authorities, and receiving the Extract from the Companies Register the next business day upon filing all the documents; 4. Ordering a company seal (optional); 5. Opening a bank account; 6. Making contributions in full to the share capital by all members of the company within 6 months upon registration of the company. State registration of LLC (step 3) takes 1 business day. 2. Individual entrepreneur Key aspects: • Simplified accounting and reporting as well as business conducting; • Foreigner may be registered as an individual entrepreneur; • May have employees; • Suitable for many economic activities, including IT; • Temporary residence or permanent residence is not required and status of IE is not a ground for obtaining such permits; • Taxpayer identification number is required; • May chose simplified tax regime; • Seal is optional; • Local address may be confirmed by a lease contract; • Upon registration all records shall be maintained either in writing or online; • Incorporation may be done by a representative acting on behalf of the power of attorney; • No state fee for incorporation. Incorporation procedure: 1. Choosing economic activities and providing address confirmation; 2. Incorporation (at the notary or state registration body), including registration with the tax authorities, and receiving the Extract from the Companies Register the next the business day upon filing all the documents; 3. Ordering a seal (optional); 4. Opening a bank account. State registration of IE takes 1 business day. 3. Taxpayer identification number This document is required to: - conduct any financial operations, including to open a bank account; - establish a company or become an individual entrepreneur and engage in business activities; - execute notary deeds; - receive a temporary or a permanent residence permit; - receive a work permit and work in Ukraine; - purchase any assets or real estate. Tax ID provides authorization for its holder (a foreign citizen) to pay Ukrainian taxes. Procedure for obtaining a Tax ID: Documents are submitted to the relevant fiscal authority, may be done by a representative under the power of attorney. Obtaining a Taxpayer identification number takes 2-5 business days. 4. Work permit Key aspects: • Allows its holder to be officially employed; • Authorizes its holder to receive a temporary residence permit; • Not required if a foreigner has a permanent residence permit; • Based on the employment with the specific company on a specific position; • Minimum required salary, except for some categories, such as IT professionals and members of the company if employed by their own company; • Granted for 1-3 years, may be renewed; • State fee is 13 620 UAH. Procedure for obtaining a work permit: Necessary documents, including a draft of the employment agreement, are filed with the State employment service authorities or administrative service centers by a representative of the company employer. Obtaining a work permit takes 7 business days. 5. Temporary residence permit Key aspects: • Serves as an official document for identifying purposes in Ukraine; • Required for working in Ukraine on the basis of the work permit; • Grants its holder a right to live in Ukraine; • Medical insurance for all the period of validity of the permit is required; • Issued up to 3 years (for the same period as the work permit), may be renewed; • State fee is approximately 915 UAH. A temporary residence permit may be received also for volunteer work or cultural, scientific, educational activity to be done by a foreigner in Ukraine. In this case, a petition from the host organization is needed. A residence permit for volunteer work is issued for 1 year. Procedure for obtaining a temporary residence permit: 1. Arriving in Ukraine with a national visa (D-type) granted to a foreigner on the basis of his work permit (not required for some countries); 2. Submitting an application and necessary documents with the relevant state migration service authorities (done in person by the applicant); 3. Registration of residential address within 30 calendar days upon the receipt of the temporary residence permit. Obtaining a temporary residence permit takes up to 15 business days. 5. Permanent residence permit Key aspects: • Grants its holder a right to reside and work in any company or engage in any business activity (without a work permit) in Ukraine as well as enjoy all rights granted by the Constitution to the citizens (except for the right to vote, hold office in the state institutions and perform military service); • To be obtained on the basis of an immigration permit; • Issued for 10 years subject to a further exchange; • A simplified procedure for IT professionals to immigrate within the yearly quota (5760 persons for 2021). Special requirements include relevant work experience (at least 3 years) and university degree / relevant technical certificates / proven salary in the amount of at least 24 000 USD for a previous employment year. Procedure for obtaining a permanent residence permit: 1. Submitting an application and necessary documents with the relevant state migration service authorities in person by the applicant to receive an immigration permit. 2. Submitting an application and necessary documents to the same authorities in person by the applicant to receive a permanent residence permit; 3. Registration of a residence address within 30 calendar days upon the receipt of the permanent residence permit. Obtaining an immigration permit takes up to 1 year (usually 3-4 months). It is valid for 1 year upon its issuance. Obtaining a permanent residence permit takes up to 15 business days. 6. Tax system There are general and simplified tax regimes applicable to companies and individual entrepreneurs. Simplified tax regime (third group): • Any number of employees; • Almost any business activity; • Annual income up to 7 002 000 UAH (approximately 252 750 USD); • Only one tax to pay; • Simple accounting and reporting; • Voluntary VAT-payer registration is available; • Unified tax rate: - 5% of the yearly gross income (for VAT non-payer) - 3% of the yearly gross income (for VAT payer). - ONLY for Individual entrepreneurs: Social security tax – 22% of the gross remuneration (of the minimum salary – 1320 UAH and 1430 UAH from 01/12/2021). General tax regime: • More complex accounting and reporting; • Any business activity; • Any number of employees; • If the annual income of a taxpayer on a simplified tax regime exceeds the limit, general tax the regime will apply; • Tax rate (CIT) – 18% of the net income; • Tax returns and assessment yearly for annual income up to 20 000 000 UAH and monthly if exceeds it; • VAT-payer registration is compulsory if the volume of the taxable transactions of the company for the past 12 months exceeds 1 000 000 UAH (approximately 36 000 USD); • Voluntary registration of VAT-payer prior to exceeding the said threshold is available; • ONLY for Individual entrepreneur: Social security tax – 22% of the gross income (maximum tax base is 15 minimum salaries) Value-added tax: • The standard VAT rate is 20% (supply of goods and provision of services with the place of such supply and provision within the territory of Ukraine), however, some reduced rates are available for agricultural, entertainment, and insurance activities; • VAT rate for export of goods and services is 0%; • Tax returns to be filed monthly. - If a company is engaged in the provision of services, the simplified tax regime is an option to go in most cases. - Reporting and tax payment are done quarterly (for VAT payers – additional monthly report). - If a taxpayer on a simplified regime exceeds the income limit, a penalty will be charged and a general tax regime will apply further on. Registration with the tax authorities concerning the preferred tax regime as well as registration as a VAT-payer may be done either simultaneously during the incorporation or after the incorporation. Taxes concerning employee: • Employee is officially employed in the company; • Minimum remuneration – 6000 UAH (6500 UAH from 01/12/2021); • Personal income tax (PIT) – 18% from the gross remuneration; • Military tax – 1,5% from the gross remuneration; • Social security tax – 22% on the top of the gross remuneration (is calculated and paid extra by the employer; deductible for CIT purposes). 7. Structure of IT business in Ukraine • IT company in a form of an LLC is registered under Ukrainian legislation. • LLC enters into contractor agreements with developers who are individual entrepreneurs registered under Ukrainian legislation. The developer acts as an independent contractor. The contractor agreement shall be drafted NOT to imply any employer-employee relationship. • Considering such tax optimization, LLC and individual entrepreneurs are responsible for payment of their own taxes according to the chosen tax regime, usually they both are on a simplified regime (third group). Best regards, ALTER team
Alter take part in Kyiv IT cluster's and Chambers of Commerce partnership
Alter take part in initiative of building partnership between Kyiv IT cluster and Chambers of Commerce from different countries. We are talking about the cooperation between IT companies and businesses from other countries. Welcome to join initiatives of Kyiv IT Cluster! Contact email for more details: email@example.com
Setting up an outsourcing R&D branch company in Ukraine with Kyiv IT Cluster
Kyiv IT Cluster as a base for Setting up R&D or outsourcing branch company in Ukraine. The World Hi-Tech Industry players recognized Ukraine as one of the countries with a high market potential several decades ago. Lately, this year, Forbes Ukraine listed the top 30 Hi-Tech international but originally Ukrainian startups with more than 20 Million valuations each. Over 60 Ukrainian companies are included in ranking the world’s best IT outsourcing companies, following top research ratings in 2020. These facts allow us to state that the Ukrainian Hi-Tech ecosystem has been dynamically growing. Moreover, many global companies have opened their branches and R&D offices to benefit from hiring low-cost Ukrainian high-tech professionals. Primarily known as the talent market with more than 200,000 tech professionals with 10% annual growth, it is becoming more and more attractive to hire a dev team that fully understands and fulfills the performance needs. As an IT community, Kyiv IT Cluster unites IT companies, consulting partners, recruiting agencies, and creative spaces for IT specialists. Kyiv IT cluster with its members prepared several decisions for foreign IT companies. **Partnership with IT companies of Kyiv IT Cluster.** As the union of IT companies, Kyiv IT Cluster will introduce you to members of Cluster that have different expertise and products onboard like: Fintech, Agritech, E-commerce, Retail, Automotive&Logistics, Big Data, Machine Learning &AI, Healthcare Mobile development, Web development, DigitalMarketing& Adtech, HoReCa, Augmented Reality, Blockchain, Cloud, CRM&Automatisation, Fashion, Gaming, Telecom, Outstaffing, UI/UX, VR, etc. Nowadays, Kyiv IT Cluster companies already cooperate with the following countries: Canada, Israel, USA, Japan, UAE, Estonia, Norway, Germany, France, Sweden, Denmark, Switzerland, and United Kingdom. Cluster’s companies have a wide range of products that can be licensed for you or, in some cases, bayed. **Recruiting and outstaffing.** Kyiv IT cluster companies or recruiting agencies can provide you staff of specialists or certain specialists. As a result, you will get a partner who controls the process of product development and take on his part all operational expenses and procedures. For example, our partner DevteamRadar can help you search and form developer teams or particular software specialists. **Registration of own IT company with staff.** If you want to collect a team with your legal entity or control, you can request the support of our legal partner ALTER. Our legal partners have experience in building the structure of IT companies, employment contracts, immigration questions, and protection of IP rights. **Staff placement** In the beginning, many clients don’t want to waste time searching for some space where employees will sit. That’s why Kyiv IT Cluster can recommend our strategic partner, Coworking Platforma that has a network of coworking spaces over Ukraine and in Kyiv, where you can sit your specialists. https://youtu.be/TB-YXAUGpz4 To sum up, if you choose the Kyiv IT cluster like the partner, you will get the union of companies that cover your key questions, requests, necessities, and excellent results for your clients and partners.