We provide the following services for a foreign representative office in Ukraine, including foreign airline companies:

• accounting services
• payroll
• submitting reports on payroll
• clearance of advances
• preparation of the payment power attorneys for banks
• particular services for the representative office of foreign airline companies, based on specifics of accounting regulation for international contracts
• processing of bank statements
• control and processing of primary documentation
• preparation and submitting of reports to the Social Insurance Fund
• preparation and submitting of the calculations on the tax income of a non-resident received at the territory of Ukraine
• preparation and submitting of the enterprise’s balance and the report on financial results
• preparation of orders
• record-keeping of leave salary
• development of staffing table
• preparation of acts on the commissioning of main funds
• preparation of the acts on clearance of the inventory
• preparation of the documents on purchase and transfer of foreign currency
• calculation of payments for sick days
• preparation and submitting of the calculative statements to the Social Insurance Fund in case of a sick leave
• preparation and submitting of the report according to the 1-DF form
• preparation of the informational notes on changes in the legislation of Ukraine
• consultancy on activities of a representative office
• analysis of a representative office activities
• providing recommendations on taxes and representative office activities.

Services for foreign representative offices

The instruction “On the way of registration of the representative offices of the foreign entities of economic activity in Ukraine” states that the representative office is not considered a legal entity and does not conduct any independent economic activity. In all cases, it acts on behalf and on the attorney of a foreign entity of economic activity. The representative office of a foreign entity of economic activity in Ukraine is able to conduct operations, related to representative functions and only in the interest of a particular foreign entity of economic activity.

A permanent representative office is an income taxpayer, may be a VAT payer, and is considered as a tax agent on income tax of physical entities.

Creation and activity of a foreign representative office

The Law of Ukraine “On foreign economic activity” defines a representative entity of a foreign entity of economic activity as an entity or a person, which represents the interests of a foreign entity of economic activity in Ukraine and has an authority for that arranged accordingly.

The central body of executive power on economic policy arranges a registration of such representatives of foreign entities of economic activity. As of today, it is a Ministry of Economic Development and Trade of Ukraine.

Foreign companies may create:

• a representative office without the creation of a legal entity, which means without a right to conduct economic activity, but with a right to conduct representative functions exclusively and does not have any profit at the territory of Ukraine
• a representative office with the creation of a legal entity or permanent representative office which has a permanent place of activity through which an economic activity of a non-resident is fully or partially conducted in Ukraine.

The following documents should be provided for the registration of an entity of a particular type of non-resident company:

• a statement with an appeal to register a representative office which does not require a specific form but should have a notarized signature of the first person of a foreign entity of economic activity
• an extract from the trade (bank) register of a country, where the headquarters of a legal entity – non-resident is officially registered
• a certificated from the bank, where the official bank account of the applicant is registered with a notarized signature of a bank’s employee
• a power of attorney on fulfillment of representative functions in accordance with the legislation of a country, where an office of a foreign entity of economic activity is officially registered and complimented with a notarized signature of the first person of a legal entity – non-resident.

The documents listed below should be apostilled.

Once received, the Ministry of Economic Development and Trade of Ukraine launches the process of registration.

Bank accounts

According to the Regulation of the National Bank of Ukraine № 492 as of 12.11.2003, the representative office may have current bank accounts of type “N” and “P”.

Bank accounts of type “N” in national currency are opened for official representative offices, representatives of legal entities – non-residents that do not conduct economic activity at the territory of Ukraine and for organizations and institutions which according to the international agreements of Ukraine and to the Ukrainian legislation are involved into the implementation of programs and projects of international support or of international technical support.

Money from the foreign currency sale at interbank currency market of Ukraine and received from a legal entity – non-resident, sale of a representative’s property at the territory of Ukraine, accrued interest on the remaining funds on a personal deposit account and from other sources can be enrolled to the bank account of type “N”.

Money from the current bank account of type “N” can be used to arrange payment aimed for the maintenance of the representative office in Ukraine, including salaries, office rent, purchase and maintenance of equipment and transport, current repairment of placements, and fulfillment of representative functions. Apart from that money can be used for insurance of property, transport vehicles of the representative office lives and health conditions of its staff, as well as the purchase of foreign currency for transfers to the legal entity’s account – non-resident, the interests of which are represented by the representative office at the territory of Ukraine. Transfers can be also made in case if the representative office terminates its activity in the territory of Ukraine.

Permanent representative offices also open current bank accounts of type “P” in national currency. Such accounts are used according to the rules, defined for current accounts of legal entities – non-residents, which means that they may be used for any operations. Money from the bank account of type “P” in national currency can be used by the representative office to purchase foreign currency at the interbank currency market of Ukraine and further transfers to the bank account of a legal entity – non-resident, the interests of which are represented by this representative office at the territory of Ukraine, for the amount of money, received at the territory of Ukraine from purchase and sale of products, works, and services, as well as the amount of money, foreseen for the salaries of employees-non-residents.

Foreign representative offices having bank accounts of type “N” and type “P” can also open bank accounts in foreign currency.

Tax exemption at the territory of Ukraine

Certificate on avoidance of double taxation for every full and partial year of activity is an important condition for the representative office operational activity. The certificate is provided to the main enterprise by the authorized bodies in the country of its registration. In case of necessity, this certificate may be apostilled, translated, and notarized.

Liquidation of the representative office

The activity of the representative office of the foreign entity of economic activity is terminated in case of:

• the foreign entity of economic activity, which has a representative office in Ukraine, terminates its activity
• if the agreement with a foreign country is terminated in case if the representative office is registered in accordance with such agreement and it is directly foreseen in the conditions of this agreement
• by the decision of the foreign entity of economic activity that opened the representative office
• in case of violation by the foreign entity of economic activity or by its representative office the legislation of Ukraine, including the Instruction
• In case if the representative office terminates its activity, the Ministry of Economic Development and Trade of Ukraine takes the decision to cancel the record in the Register of representative offices and withdraws the certificate, informing the representative entity about its decision in written form.

To be able to request the Ministry of Economic Development and Trade with the appeal to cancel the record in the Register of Representative Offices, the representative office should pass the tax inspection and receive a Confirmation Note from the authorized body of the State Customs Service of Ukraine on the absence of goods and transport vehicles in the regime of temporary import to the territory of Ukraine.

The tax inspection of the representative office is defined based on the decision, which should be legalized or apostilled, translated into Ukrainian, and notarized.

The power of attorney, which authorizes a particular person to terminate the representative office is an obligatory document for this process.

After receiving the Act on the results of the unscheduled inspection, it is important to create a final clearance list with the signatures of all tax departments. The next step is to receive a note about de-registration according to the form № 12-OPP.

The note 12-OPP is valid for two months since the day of its issue thus it is important, together with the launch of tax inspection, to launch inspections in the Pension Fund of Ukraine and in the Social Insurance Fund of Ukraine.

The decision on cancellation of record in the Register of a representative office is made by the Ministry of Economic Development and Trade of Ukraine thus the request on such cancellation should be submitted to the Ministry together with certificates from tax and customs services and the power attorney to the person, authorized to conduct such activity.

The next step is to send to the bodies of statistics the request to exclude the foreign representative office from the Unified State Register of Enterprises and Organizations of Ukraine. For this, following the Regulation “On the Unified State Register of Enterprises and Organizations of Ukraine”, approved by the Decision of the Cabinet of Ministers of Ukraine as of 22.01.1996 under № 118.  

The following documents should be submitted:

notification letter to the Ministry of Economic Development and Trade of Ukraine on the cancellation of the record in the Register of the representative offices, an informational note about deregistration in the tax bodies of the State Tax Service in Ukraine, completed inquiry to exclude the records from the Unique Register of Enterprises and Organizations of Ukraine.