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Legal Status of a Representative Office in Ukraine

The Ukrainian Representative Office is legally entitled to evolve in commercial activities like any other legal entity. This situation is very different to the Russian strict practice. However, the RepOffice’s activities are very narrow. The scope of allowed business activities is defined prior to the registration.

Should you choose to set up a Ukrainian Representative Office of your own, push the button below and proceed to the online company registration form. You will get a free consultation upon submitting your data. And yes, it is FREE.

During the registration process of Representative Offices in Ukraine we’ve been asked the following question by our clients :

- If the Ukrainian Representative Office is not having a status of an own legal entity, how can it then enter into agreements in its own name: working agreements? rent agreements? open bank accounts etc.?

We have answered the question commonly with the following:

-IN GENERAL: The legal form of a Representative Office is commonly used by non-Ukrainian companies for carrying out marketing, promotional and other auxiliary and preparatory activities on their behalf. Legally spoken, a Representative Office is an affiliate (a part) of the non- Ukrainian company. However, considering operational activities, it is handled by the Ukrainian executives practically as a separate legal entity. It pays taxes on profit and added value like any other company in Ukraine.

-IN PARTICULAR: RepOffice is considered by the tax authority and the social security offices as a separate legal entity, which is naturally restricted to the purely Ukrainian content of activities, leges specialis apply. Ukrainian civil (commercial) courts would however consider a Repoffice as an affiliate, general civil legislation applies.
Taxation:

RepOffices pay taxes on profit and added value like any other company in Ukraine. Currently (as of April 2012), it is 21% on profit, which is going to be gradually reduced to 19% on January 1, 2013 and to 16% on January 1, 2014. Value Added Tax is 20%. Please see our article on the Taxation Basics for Ukraine.

Please ask us for advice before taking any action. You can do it here, it this blog right after this post. We are always happy to help.

Sincerely yours,
Alexei Sandakov
CEO, Lobusch Consulting
www.lobusch-consulting.com

 

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