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Yesterday the Ministry of Digital Transformation announced the procedure of electronic residence registration. Last week, the Verkhovna Rada of Ukraine registered a draft law On the Implementation of Public Electronic Services for Registration and Declaration of Residence. The Ministry of Digital Transformation declares that this project would abolish certificates of residence registration and simplify the residence registration procedure.

Summary of planned changes:

– The project introduces the concept of “residence declaration”. The declaration will be analogous to the already known registration.

– Registration of residence will result from the residence declaring.

– According to the draft Law, a person will be given the opportunity to declare (register) residence through an electronic portal. To do so, one will need to register on the state portal of electronic services and fill out an application through the personal account, attaching copies of identity documents, housing documents, and the real estate owner’s consent to register. The opportunity to declare (register) residence through centres of administrative state services (CNAP) also remains.

– To declare (register) a place of residence in the apartment / house that is not owned / co-owned by a person the consent of the homeowner is required! We emphasize that the residence declaration (registration) is impossible without the consent of the apartment / house owner. The novelty is that such consent of the homeowner can be provided by signing an electronic application.

– The list of documents to be submitted for registration has been extended. For example, foreigners and stateless persons, who have received a temporary or permanent residence permit, will have to submit a passport and a notarized translation of the passport pages containing their personal data, in addition to the permit.

– The administrative fee rates for registration and deregistration of residence are planned to be doubled, but if a person performs these two actions at once, only one of them will be charged.

– The certificates of residence registration will no longer be the result of the residence registration service. The result of the service will be the notification via phone or e-mail. A Certificate of Residence Registration (or, in a new way, an Extract from the Register of the Territorial Community) will be available only as a separate service. It will also be possible to obtain an Extract from the Register through the electronic portal.

– Some laws will be amended to abolish the submission of certificates of residence registration and to make certain state guarantees available irrespective of a person’s place of residence (e.g. an application for pension or social benefits can be submitted in any region regardless of the place of residence; medical care will also be provided regardless of the place of registration of the person).

– If the place of registration is changed electronically, the state authorities will pass information to the Ministry of Internal Affairs for deregistration and putting on military records.

All individual taxpayers should be registered with the supervisory authorities by including information about them in the State Register.

The State Register shall contain information on individuals who are:

– citizens of Ukraine;

– foreigners and stateless persons, who permanently reside in Ukraine;

– foreigners and stateless persons who do not have permanent residence in Ukraine, but under the legislation are obliged to pay taxes in Ukraine, or if they are founders of legal entities established in Ukraine.

So, in which cases is the tax ID required in Ukraine?

The tax ID is used in the case of:

– payments of income from which taxes are withheld under the legislation of Ukraine;

– conclusion of civil law agreements, the subject matter of which is a taxable object subject to taxes and duties;

– bank accounts opening;

– state registration of private entrepreneurs or issuance of special permits (licenses, patents, etc.) for certain types of economic activity in favor of such persons, as well as registration of independent professional activity;

– registration of property or rights to it and other assets of individuals that are subject to taxation;

– registration of vehicles that become the property of individuals;

– in other cases provided by law.

Therefore, in order to carry out all the above actions on the territory of Ukraine, it is necessary to register with the State Register of Individual Taxpayers and obtain the tax ID.

Procedure for obtaining the tax ID

Foreigners and stateless persons shall submit documents to the territorial bodies of the State Tax Service in the regions, cities of Kyiv and Sevastopol.

Foreigners and stateless persons who have a permanent residence permit or a temporary residence permit in Ukraine may register as taxpayers in the state tax inspections in regions, cities, districts in cities, Joint State Tax Inspectorates according to the place of residence in Ukraine, specified in the residence permit.

To obtain the tax ID, foreigners shall submit the following documents:

– registration card in the specified form;

– an identity document of a foreigner, duly translated into Ukrainian and certified by a notary and a copy of such translation;

– a copy of the mark, which certifies the border crossing;

– power of attorney, certified by a notary, a copy of it, and a copy of the passport of the representative (if the documents are submitted by the representative).

Please note, in order to submit documents and obtain the tax ID, foreigners must stay in Ukraine legally and within the permitted period of temporary stay in Ukraine (not exceeding 90 days within 180 days, unless otherwise specified by international agreements or provided by visa-free entry).

To obtain the tax ID, foreigners with a temporary or permanent residence permit in Ukraine shall submit the following documents:

– registration card in the specified form;

– a temporary or permanent residence permit in Ukraine and its copy;

– residence certificate and its copy;

– power of attorney, certified by a notary, a copy of it, and a copy of the passport of the representative (if the documents are submitted by the representative).

The term for issuing a document confirming the registration of a person as a taxpayer is 3 working days.

For the issuance of the tax ID, a person shall submit the same documents that were submitted to obtain the tax ID (except for the registration card).

There is no state fee for the issuance of such a document.

It is worth noting that the Parliament of Ukraine (Verkhovna Rada) has passed a law equating digital passports to paper ones. These changes apply only to the passport of a citizen of Ukraine and the passport of a citizen of Ukraine for travelling abroad. Electronic passports in the “Diia” application can now be provided on the territory of Ukraine for identification and confirmation of citizenship, except for crossing the state border, entering and leaving the temporarily occupied territory of Ukraine. Thus, citizens of Ukraine can provide electronic passports when submitting documents to obtain the tax ID.

The law enters into force on August 23, 2021.

The EXPATPRO team would like to advise you of the recent updates to the regulations on liability for traffic rules violations.

The Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine Concerning Strengthening of Liability for Certain Road Traffic Safety Offenses was adopted on February 16, 2021, and came into force on March 17, 2021. This law has amended the Code of Ukraine on Administrative Offenses, the Criminal Code of Ukraine, as well as the Laws of Ukraine On Road Traffic and On the National Police.

We invite you to pay attention to the peculiarities of the recent regulations.

The first point is that the legislator has strengthened the liability for drunk driving (being impaired by alcohol, drugs, or other substances or medicines to a level that critically reduces attention and speed of reaction of the driver) and eliminated all the flaws of law that allowed the offenders to exempt from legal liability. The penalty for drunk driving for the first time within one year shall now amount to UAH 17,000 fine with the deprivation of the right to drive a vehicle for 1 year; for the second time in the same year – UAH 34,000 fine with the deprivation of the right to drive vehicle for 3 years and possible paid withdrawal of the vehicle, or administrative arrest for 10 days with the deprivation of the right to drive vehicle for 3 years and possible paid withdrawal of the vehicle; for the third time in the same year – UAH 51,000 fine with the deprivation of the right to drive vehicle for 10 years and confiscation of the vehicle or administrative arrest for 15 days with the deprivation of the right to drive vehicle for 10 years and vehicle confiscation.

Previously, the fines for the said offenses were UAH 10,200, UAH 20,400, UAH 40,800, respectively. Moreover, the new penalties for drunk driving were introduced – paid withdrawal of the vehicle, confiscation of the vehicle, and administrative arrest. Unlike vehicle confiscation, the paid withdrawal provides that the vehicle is seized, sold at the auction, and money received from realization is returned to the vehicle’s owner.

Henceforward it becomes more difficult to avoid liability for the following reasons. The term of drunk driving case consideration at the court is now 1 year instead of 3 months period that easily allowed to avoid responsibility in the past because of intentional delay in court proceedings, overloaded courts, etc. Besides, according to the new regulations, legal proceedings cannot be closed and the offender cannot be released from administrative liability for insignificance or due to the transfer of materials to the labor collective or public organization for consideration. It is crucial to point out that in case of repeated violation the new penalty does not replace the previous one, they are added up. In such a case, the whole term of deprivation of the right to operate a vehicle may exceed the maximum allowable 10-years period.

If any person being drunk and driving a vehicle causes a road accident with victims, such a person will be criminally charged. Article 286-1 of the Criminal Code of Ukraine has been adopted in a new edition. Now it prescribes liability in the form of imprisonment for different terms, depending on the severity of the consequences caused by the road accident. The maximum term of imprisonment is 12 years with the deprivation of the right to operate a vehicle for up to 10 years. Such a penalty is provided for offenders who caused a road accident that resulted in the death of several people.

Furthermore, the commission of the abovementioned offenses precludes the perpetrator from the opportunity to be released from liability due to effective repentance, reconciliation of the perpetrator with the victim, transfer of a person on bail, change of circumstances. Release from serving a sentence on probation, replacement of the unserved part of the sentence with a milder one, and amnesty also do not apply to drunk drivers.

The reasoning behind these strict regulations is caused by the widespread occurrence of drunk driving cases, their recurrence, the exemption of drivers from legal liability, and the significant number of victims of such offenses. In 2020 alone, approximately 130,000 drunk drivers were apprehended. More than 9,000 drivers repeated the case of drunk driving and another 5,000 of such offenses were committed for a third time, despite the fact, that such offenders have paid fines and suffered other negative consequences of such violations. Moreover, there are numerous examples of road accidents with drunk drivers involved, with dozens of casualties, and some of the drivers managed to avoid liability for the deaths of innocent victims.

Other amendments concern penalties for speeding, seatbelts non-use, driving without a license or transferring a vehicle to a person who is not entitled to operate it, or driving after being deprived of the right to operate a vehicle.

The fines for exceeding the allowed speed limit: for up to 50 km/hour is UAH 340 instead of UAH 255, for over 50 km/hour – UAH 1700 instead of UAH 510. The penalty for non-use of seat belts amounts to UAH 510, which is 10 times more than before. The incorrect installation of state license plates and dirtiness of the plates are punished with UAH 850 fine.

Please note that while driving you should always have a valid driver’s license, vehicle registration document, and insurance policy. Otherwise, you will be forced to pay a fine of UAH 425, which remained unchanged. At the same time, the legislator has added the opportunity to use all those documents and show them at the demand of police officers in electronic form, for instance, by having the “Diia” application.

For driving without a right to operate a vehicle or transferring the vehicle to a person who has no such right there is a fine of UAH 3,400. When a person that has been deprived of the right to operate a vehicle (e.g. for drunk driving) was driving again,  a fine of UAH 20,400 has to be paid (previously – UAH 510), in the event of repeat offense – UAH 40,800.

The legislator has also strengthened the liability for leaving the scene of a road accident by introducing a fine of UAH 3,400, or deprivation of the right to operate a vehicle for up to 2 years, or administrative arrest for up to 15 days.

The fines for violations committed by pedestrians and cyclists were also increased, e.g. for crossing the road at the inappropriate place or against the red traffic light signal – UAH 255, for violation of traffic rules by pedestrians or cyclists, committed in a state of intoxication – UAH 680 (if repeated – UAH 850 or public service for 20-40 hours).

As to the amendments to the Law of Ukraine On Road Traffic, the rules regarding how to act when you are stopped by a police officer were introduced. In such a case the driver is obliged to stop the vehicle; keep hands in the view of a police officer and not leave the vehicle without permission; switch off the engine of the vehicle and remove the key from the ignition; submit the necessary documents for verification; put the hazard lights on; get out of the vehicle.

Finally, such a type of punishment as ‘penalty points’ has been eliminated. Previously, at the beginning of the year, every driver has been granted a certain number of points. For the specific violations of traffic rules, for example, those automatically fixed like exceeding speed limits, some of the points have been withdrawn. Once a driver had used up all the points, he/she could be forced to pay a real fine for his violations, or another type of punishment could be imposed on the driver.

It should be stressed, that foreigners and stateless persons bear the administrative and criminal responsibility for traffic rules violations in the same way as Ukrainian citizens do.

The EXPATPRO team is always ready to advise you on any issues on road safety and traffic rules.

An invitation from the host party is one of the documents submitted for the Ukrainian visa. Mostly, invitations are required for short-term visas, but in some cases an invitation is required for a long-term visa (for purposes such as assistance in the international technical project, work for the representative office/permanent establishment of a foreign company in Ukraine, religious or volunteer activities, etc.).

The invitation can be provided by a legal entity or an individual. It depends on the purpose of the visit.

An invitation from a legal entity must comply with the following requirements:

– be issued on the official letterhead;

 – contain the following information:

– registration number,

– date,

– number of the legal entity in the United State Register of Legal Entities, Private Entrepreneurs and Non-Governmental Organizations of Ukraine,

– surname, name, patronymic of the invited foreigner,

– information on the date and place of birth of the invited foreigner,

– information on the citizenship of the foreigner,

– passport details of the foreigner,

– place of residence abroad,

– purpose of the trip,

– period of the planned visit,

– number of planned entrances,

– place of residence in Ukraine,

– obligation of the legal entity to assume possible costs of the invited person’s stay and departure from Ukraine,

– signature and position of the signatory.

A copy of the extract from the United State Register of Legal Entities, Private Entrepreneurs and Non-Governmental Organizations of Ukraine providing the details about the legal entity shall be attached to the invitation. Moreover, other documents from the host party may additionally be required for certain visa types.

An invitation from an individual must comply with the following requirements:

– be notarized;

– be provided by a person who legally resides in Ukraine (it means that the invitation can be provided by a citizen of Ukraine or a foreigner, who has a temporary or permanent residence permit in Ukraine);

– contain the following information:

– date,

– surname, name, patronymic of the hosting individual,

– passport details and/or permanent/temporary residence permit (for foreigners and stateless persons) of the hosting individual,

– address of residence of the hosting individual in Ukraine,

– surname, name, patronymic of the invited person,

– information on date and place of birth,

– information on the citizenship of the invited person,

– passport details of the invited person,

– place of residence abroad,

– purpose of the trip,

– period of the planned visit,

– number of planned entrances,

– place of residence in Ukraine,

– obligation of the hosting party to assume possible costs of the invited person’s stay and departure from Ukraine,

– signature of the hosting individual.

Copies of the passport and/or permanent/temporary residence permit of the hosting individual should be attached to the invitation.

If you still have questions about applying for a Ukrainian visa, please contact: kz@expatpro.co

The ordinance of the Cabinet of Ministers of Ukraine On Establishing an Immigration Quota for the Year 2021 set a quota of 5706 permits for highly qualified professionals and workers, where 5110 belong to the IT sector.

The total number of immigration permits is allocated to the following Ukrainian regions and cities:

– Kyiv – 2611 permits;

– Kharkiv region – 1293 permits;

– Odesa region – 600 permits;

– Mykolaiv region – 1 permit;

– Lviv region – 600 permits;

– Dnipropetrovsk region – 600 permits;

– Volyn region – 1 permit.

According to the Order of the Ministry of Economic Affairs On Amendments to the List of Professions and Qualification Requirements for Specialists and Workers to be Obtained through Immigration in 2021, the list of professions in the field of IT has expanded, if compared to the previous year, and is as follows:

– Technical Manager, Technical Director – 500 applicants;

– Information Security Systems Manager, Quality Manager – 100 applicants;

– Software Engineers (Senior Software Engineer, Computer Systems Engineer, Software Engineer, Software Engineer (database), System Software Engineer, Applications Software Engineer, Design Engineer (electronics)) – 3013 applicants;

– Analysts (Computer Communications Analyst, Computer Systems Analyst, Operational and Application Software Analyst, Consolidated Data Analyst) – 208 applicants;

– Database Administrator – 6 applicants;

– Data Administrator – 2 applicants;

– Computer Database Analyst – 3 applicants;

– System Administrator – 12 applicants;

– Computer Software Engineer – 3 applicants;

– Information Technology Management Expert (in the field of blockchain, cryptocurrencies, virtual assets) – 50 applicants;

– Computer Application Engineer – 3 applicants;

– New Equipment and Technology Implementation Engineer – 3 applicants;

– Information Security Specialists (Professional in the organization of information protection with limited access, Information Security Professional, Specialist in the organization of information security with limited access, Information Security Specialist) – 301 applicants;

– Specialists in the field of computer technology (Information Technology Specialist, Software Development and Testing Specialist, Computer Programmer) – 803 applicants;

– Computer Graphics (Design) Specialist – 3 applicants;

– Information Processing and Software Operator – 100 applicants.

Technical Managers, Technical Directors shall have at least 3 years of confirmed work experience in the relevant position. Additional requirements: degree in the technical field of study, confirmed income in the preceding calendar year – not less than 24,000 US dollars, MIT certificate.

Information Security Systems Managers, Quality Managers shall have at least 3 years of work experience in the relevant field. Additional qualification requirements: degree in the appropriate field of study; income for a particular occupation in the preceding calendar year in the amount equivalent to 24,000 US dollars and above; valid certificate on information security (one of the following: CISSP, CISA, CISM, ITIL Master, CompTIA Security +).

The following mandatory requirement is set for all Software Engineers: confirmed work experience of at least 3 years. However, additional qualification requirements differ for each profession.

The following additional requirements are set for the Senior Software Engineers: technical degree; income of at least 24,000 US dollars in the preceding calendar year for a particular occupation; MIT certificate.

For Computer Systems Engineers and Design Engineers (electronics) – a degree in one of the following technical fields: Computer Engineering, Cybernetics, Mathematics, Applied Mathematics, Computer Science; income for a particular occupation in the preceding calendar year in the amount equivalent to 24,000 US dollars and above; MIT certificate in the relevant field.

Additional requirements for Software Engineers, Software Engineers (database), Applications Software Engineers, System Software Engineers are the following: degree in one of the technical fields – Cybernetics, Mathematics, Applied Mathematics, Computer Science or technical education in the field of automation and computer technology; income for a particular occupation in the preceding calendar year in the amount equivalent to 24,000 US dollars and above; MIT certificate in the relevant field.

Analysts shall have at least 3 years of confirmed work experience in the relevant profession. Additional qualification requirements include a degree in one of the following technical fields: Cybernetics, Mathematics, Applied Mathematics, Computer Science; income of at least 24,000 US dollars in the preceding calendar year for a particular occupation.

Database Administrators shall have at least 3 years of work experience in the respective profession, and as for additional qualification requirements – a degree in the relevant field, skills to ensure the performance of databases under the guidance of MySQL / PostgreSQL / MS SQL, support and development of existing database infrastructure, monitoring and performance and analysis of databases, creating SQL queries, working with operating systems Windows, Linux; experience in MySQL / PostgreSQL / MS SQL database administration.

A mandatory requirement for Data Administrators is 3 years of work experience. A degree in the field is an additional requirement.

Computer Database Analysts shall have at least 3 years of work experience in the relevant profession. Additional qualification requirements: degree in the field, skills in checking the details of invoices, audit of freight invoices, analysis of shipment data, checking the logic of calculation, communication with customers, optimization of business processes; knowledge of English at the Intermediate level (or higher); confident use of MS Excel.

System Administrators shall have at least 3 years of work experience in the relevant profession. Additional qualification requirements: degree in the technical field; skills in maintenance and repair of computer equipment and peripherals, installation of Windows, Microsoft Office and other applications, implementation of medical and accounting information systems, customer support, maintenance of computer network and server equipment; knowledge of electronics, computer technology, Windows operating systems, network technologies.

Computer Software Engineers and Computer Application Engineers shall have at least 3 years of work experience in the relevant profession. Additional requirements for both categories are degree, and additionally for Computer Software Engineers – knowledge of Macintosh.

Information Technology Management Experts (blockchain, cryptocurrencies, virtual assets) shall have 3 years of work experience in this field. Additional qualification requirements: degree, income for a particular occupation in the preceding calendar year in the amount equivalent to 24,000 US dollars or above.

A mandatory requirement for New Equipment and Technology Implementation Engineers is the confirmed work experience in this profession for at least 3 years. Additional qualification requirements: degree, skills in developing and designing technical tasks for the implementation of the latest information systems (creation of projects of computer classes, laboratories, video surveillance systems, control and management systems), implementation and improvement of the latest information technologies.

Information Security Specialists shall have 3 years of work experience in the relevant profession. Additional qualification requirements are as follows: degree in the appropriate field of study; income of at least 24,000 US dollars in the preceding calendar year for a particular occupation; valid certificate on information security (one of the following: CISSP, CISA, CISM, ITIL Master).

Specialists in the field of computer technology shall have at least 3 years of confirmed work experience in the occupation in the relevant field. Additional qualification requirements: degree in the technical field; income for a particular occupation in the preceding calendar year in the amount equivalent to 24,000 US dollars or above.

Computer Graphics (Design) Specialists shall have 2 years of work experience in the relevant occupation. Additional qualification requirements: degree; professional knowledge of WordPress web programs; knowledge of HTML, php, SEO, Link, Webmaster Tools; ability to analyze and create information content.

Information Processing and Software Operators shall have at least 3 years of confirmed work experience in the relevant field. Additional qualification requirements: degree in the technical field of study; income for a particular occupation in the preceding calendar year in the amount equivalent to 24,000 US dollars or above.

Work experience shall be confirmed by one or any set of documents, including in particular:

1) employment history record book or equivalent;

2) letters of reference confirming the provision of services in the relevant field;

3) agreements on the provision of services in the relevant field;

4) certificates of services rendered in the relevant field;

5) other documents confirming work experience issued in the applicant’s country of residence.

A stateless person is a person who is not considered as a citizen by any state under the operation of its law. A person may be born without citizenship or become stateless.

The main reason for statelessness is the loss of citizenship in one state and the inability to acquire citizenship in another. The same may occur if a person renounces citizenship voluntarily, as this does not automatically guarantee the acquisition of citizenship of another state.

In conformity with the provisions of the Law on citizenship of Ukraine, Ukrainian citizens are protected from such a situation, as renunciation from Ukrainian citizenship is allowed only if a person has acquired the citizenship of another state or has received a document issued by the authorized bodies of another state stating that the citizen of Ukraine will acquire its citizenship when renouncing Ukrainian citizenship.

Due to various reasons, a considerable number of people have never acquired citizenship of any state and have never received a passport.

According to rough UN estimates, currently there are around 35,000 stateless persons in Ukraine.

It brings up the question: Is there any option for such a category to reside legally on the territory of Ukraine and enjoy their rights?

In June 2020 the Verkhovna Rada adopted amendments to the Law of Ukraine On the Status of Foreigners and Stateless Persons, which regulated the status of stateless persons in Ukraine. The Law establishes a procedure for recognition as a ‘stateless person’, which will further allow such persons to be documented and legally stay on the territory of Ukraine, as well as to receive a residence permit and a stateless person certificate (stateless person identification document) to travel abroad. And, on condition of residing in the territory of Ukraine in this status for more than 2 years – to obtain an immigration permit and a residence permit.

On March 24th, 2021, the Cabinet of Ministers of Ukraine finally adopted a procedure for the implementation of the provisions of the Law. From now on, stateless persons may apply to a territorial body of the State Migration Service to be recognised as stateless. The application must be accompanied by all the documents confirming their identity. These may be passports (if any), travel documents, birth or marriage certificates, certificates on the absence of citizenship, documents on the study at an educational institution of Ukraine or another state, the passport of former USSR citizen as of 1974 sample, documents on the job, documents on receiving medical assistance in Ukraine, documents on the place of residence, etc. In order to confirm the identity, the information on three persons who can help to establish the applicant’s identity and sign the relevant papers shall also be provided.

In general, it should take up to 6 months to process the application. For particular reasons, the processing may be extended for up to a year. Once the procedure is complete, a decision on recognition or refusal of recognition as a stateless person is issued.

While the application is pending, the person receives a certificate confirming the application for recognition as a stateless person, and it serves as an identity verification document.

Upon receiving the decision on recognition as a stateless person, the person has the right to be granted a temporary residence permit in Ukraine.

Foreigners coming to Ukraine to start a business, or to get married or employed, or for any other reason, usually consider purchasing an apartment or a house in Ukraine.

In response to popular requests from our clients, the EXPATPRO team has prepared a brief guide on how a foreigner can buy an apartment in Ukraine, and which intricacies and pitfalls shall be considered, as the real estate market trends and legislation tend to be ever-changing.

A foreigner can choose to purchase an apartment in a new building or the secondary market. It depends on what you prefer. Anyway, all the papers and information have to be thoroughly and profoundly checked in both cases. However, there are some differences between these two options.

The essential point to keep in mind is that you can issue a power of attorney and your legal representative will do all the necessary actions to buy the apartment on your behalf.

We are ready to support you during the following stages of the apartment purchase, which have their own peculiarities depending on whether you purchase in the primary or secondary market:

1. Conducting due diligence.

2. Negotiations and a presale agreement.

3. The final apartment sale and purchase agreement. Payment. Registration of ownership.

Step 1: Conducting Due Diligence

If you find a property of your interest on the secondary market, don’t make a hasty decision to purchase it, as it should be well-checked, the same as the apartment in a new building.

Due diligence procedure comprises verification of the following papers and information:

1. a) legal status of the house where the apartment is located:

You should check the status of the building where the apartment is located. Is it an architectural monument or a cultural heritage object of Ukraine (it could be verified via the State Register of Ukrainian Immovable Monuments of state and local significance)?

If so, you face a complicated task on the check of the nuances (whether there is consent from the Ministry of Culture for the apartment alienation, if there is a valid protection contract, the act of technical condition of the monument that should be updated every 5 years, whether the term of one month expired, during which the State Department of Cultural Heritage Protection enjoys its right of privileged purchase, etc.)

1. b) title documentation to the property, such as an apartment sale and purchase contract or other document confirming the ownership of the seller (certificate of ownership, deed of gift, etc.), technical certificate (passport) for the apartment, a document confirming the registration of the ownership rights of the previous owners (shall be checked through the extract from the Register of Titles to Real Estate or the Certificate from the BTI (Bureau of Technical Inventory).

2. c) arrests, mortgages, other encumbrances on the property

It is necessary to check the information about the apartment in the public registers, e.g. whether the apartment has been mortgaged (checked with the Register of Titles to Real Estate) or is a subject of litigation (checked with the Unified State Register of Court Decisions, Registry of Enforcement Proceedings).

1. d) verification of the information about the seller (whether they are married (if so, notarized consent to sell the apartment from the spouse is required), whether they have minors, or disabled persons, or have unpaid debts (checked with the Unified Register of Debtors).

If it is a company, it has to be checked whether it is not bankrupt or engaged in any court proceedings.

If there are children who have the ownership rights to the apartment or rights to use it, there should be a consent of custody and guardianship agency on the alienation of the apartment. Otherwise, you run the risk of getting into a protracted legal battle and losing your apartment, if the deal contravenes or narrows the scope of existing property rights of the child, since in this case the deal could be declared invalid by the court.

1. e) documents of the owner(s) of the apartment (passport data, tax registry ID number, marriage/divorce certificates, birth certificate (if one of the owners is a minor), etc.).

2. f) checking whether debts on utility payments exist for the apartment.

3. g) revision of the persons registered in the apartment

If the seller does not provide information about the persons registered in the apartment, you need to request a notary to check the persons registered in the premises in order to find out the absence of the rights of minors and disabled persons to the apartment.

Step 2: Negotiations and a Presale Contract

Once the due diligence procedure is done, you can launch negotiations with the seller of the real estate and sign a Presale (deposit) contract.

According to the terms of the Presale contract, the parties agree on the terms of the main agreement: price, payment process, terms, liability for non-signing the main agreement.

To secure the rights of both parties under the Presale contract, the buyer usually pays a deposit that confirms his intention to buy the apartment and the seller undertakes not to sell the apartment to any other person. If the buyer evades the conclusion of the main contract within the stipulated terms, the sum of the deposit shall remain at the seller. And if the seller refuses to conclude the main contract, the buyer receives the doubled deposit back.

Step 3: The Final Apartment Sale and Purchase Agreement. Payment. Registration of Ownership

At this stage, the deal is being carried out and closed: the apartment sale and purchase agreement (hereinafter – “SPA”) shall be concluded, notarized and the ownership rights shall be registered by a notary within the Register of Titles to Real Estate.

Before signing and notarization of the SPA the parties must:

♦  evaluate the property since the price cannot be lower than the average market value of the apartment;

♦  pay a mandatory pension tax (fee) in the amount of 1% of the property value. This fee is usually born by the Buyer;

♦  pay a state fee of up to 1% of the property value to the notary certifying the apartment SPA.

The Buyer pays for the property before or after the signing of the SPA, however, becomes the owner of the realty upon signing the agreement, its notarization and registration within the Register of Titles to Real Estate.

In Ukraine, all payments over 50,000 UAH (approximately US $2,000) must be transferred through a bank. However, the majority of real estate deals between individuals are carried out through cash payments.

EXPATPRO has considerable experience in real estate support activities and advising both on the secondary and primary real estate market of Ukraine, as well as in the successful completion of the real estate deals.

You are welcome to read our next article on purchasing an apartment in a new building here.

According to the Tax Code of Ukraine, the Law of Ukraine “On Application of Cash Registers (Payment Transactions Recorders or PTR) in Trade, Catering and Services”, the PTRs shall not apply in the following cases:

1) Annual turnover is less than 1 000 000.00 UAH;

2) Settlement for goods/services is made through the bank;

3) Payment for goods/services is not made in cash at the place of delivery of goods/services.

To clear up the difference between non-cash and cash settlement: payments through Liqpay shall be deemed cash settlements, as well as payments through payment terminals. Where the payment is performed purely through a bank (settlement between current accounts) – the payment is considered non-cash, and there is no need to use a PTR. If bank cards are used for settlements, the PTR will be required.

The statutory wording of the Tax Code and the Law on PTRs appear to be contradictory, and, following the regulations for overcoming collisions of laws, one shall follow the special act provision (in this case, the Law on PTRs is predominant).

From today Dec 2^nd, 2020 the amendments to the laws were adopted, the deadlines for the mandatory application of cash registers were postponed (from Jan 01, 2022, and the limits were linked to the minimum wage rate).

The law also implied changes to the logic of determining limits for single tax payers groups (they are now also linked to the size of the minimum wage rate: for the third group the limit will be not fixed to 7 million UAH, but to the amount of 1167 minimum wages approved as of Jan 01^st (and it shall be valid from 2021, while the minimum wage rate for 2021 is expected to amount to 6000 UAH; the Budget has not yet been approved).

On October 9, 2020, the Cabinet of Ministers of Ukraine adopted Resolution No.933, which simplifies the procedure of issuing temporary residence permit (TRP) issuances for certain categories of foreigners.

Namely, foreign citizens now have the right to apply for temporary residence permits without leaving Ukraine due to the change of purpose of entry/stay.

Worth reminding that earlier, citizens of Georgia, Armenia, Azerbaijan, Uzbekistan, Belarus, and Moldova who arrived in Ukraine before getting a right to apply for a temporary residence permit, were compelled to leave Ukraine and to re-enter.

From now on the foreigners of the states mentioned above, who are staying temporarily on the territory of Ukraine, and who under the laws and international treaties of Ukraine are not required to obtain a long-term visa (D), have the right to apply for a TRP without leaving Ukraine, if they do have a ground for such application.

The amendments shall not apply to citizens of a country recognized by the Verkhovna Rada of Ukraine as an aggressor or an occupying state.

These amendments came into force on the 9th of October.

Since 2005 the visa-free regime has been in force between Ukraine and all EU countries. In virtue of the regime, the EU citizens (including British citizens) have the right to stay in Ukraine for 90/180 days without applying for a visa.

“Brexit” means that starting February 1, 2020, on the UK’s withdrawal from the Union, the non-visa effect should cease to be effective.

No worries here for British citizens though! (Still, British citizens don’t bother about it!)

Yesterday, January 29, the President of Ukraine Volodymyr Zelensky signed and announced Decree No. 28/2020, introducing a temporary visa-free regime for British citizens for 1 year (January 31, 2020, through January 30, 2021).

Ukraine intends to negotiate with the UK on further simplification of visa regulations, and even regular visa-free regime provision.

Currently, more cases are observed when one of the parents independently, without the knowledge or consent of the other, takes the child abroad, and thereby violates the custodial rights and affects the child’s access by another parent. Moreover, it is necessary to keep in mind that such an action is illegal.

According to international legislation, one of the parents has no right to make a personal decision without the consent of the other on changing the child’s permanent residence. The removal of a child is illegal if the child is taken abroad by one parent without prior consent, or is not returned from abroad within the period specified in the consent, consequently, the custodial rights are violated and it affects a child’s access by another parent. Children with dual citizenship (of both of the parents) and children who were born in so-called mixed families (one spouse is a citizen of Ukraine, the other is a national of a foreign country) are the most vulnerable to international child abduction in Ukraine.

The scenarios of international child abduction in Ukraine may vary, but the most common are the following:
● a father or a mother (a foreigner) crosses the border with the child, using the child’s passport as a national of a foreign country;
● a mother or a father (a citizen of Ukraine) crosses the border with the child, using the child’s passport as a citizen of Ukraine and the birth certificate, stating that the other parent is a foreigner (in this case, his or her consent for the child to travel abroad is not required);
● a mother or a father (a citizen of Ukraine) obtains a document confirming the joint residence of the child (in this case, one of the parents may solely decide, without the consent of the other parent, to travel abroad with the child for a period not exceeding 1 month per year) and crosses the border with the minor to never come back again.

Furthermore, a father or a mother (a citizen of Ukraine) living abroad may travel with the child to Ukraine, for example, to visit relatives and then stay without returning to the country of permanent residence.
To prevent the above-mentioned situations and to protect the rights of both parents and children, specific legal mechanisms were established. They ensure the return of children who have been illegally removed or retained in a foreign country.

Such mechanisms are provided for by the Hague Convention on the Civil Aspects of International Child Abduction, which entered into force for Ukraine on the 1st of September 2006, and are currently applied to relations with more than 80 Member Countries.

Under the Convention, the actions of a father or a mother under the following conditions shall be considered as an international abduction:

1) the child is under the age of 16;
2) the child was illegally removed or retained within the territory of a foreign country by one of the parents violating custodial rights and affecting the child’s access of another parent who exercised these rights;
3) the child had a permanent residence in a Member Country.

Each member country shall establish or designate an existing Central Authority to co-operate with the Central Authorities in another Member Country to ensure the return of the child(ren) and the fulfillment of other Convention’s functions.
The parent, whose child has been taken out of the country or retained abroad, violating his or her custodial rights, must apply for assistance in the return of the child to the Central Authority at the child’s permanent residence before removal. Such an application shall contain the most complete information about:
● the identity of the applicant;
● the identity of the child;
● the identity of the person suspected in the removal or the retention of a child;
●  approximate location of the suspected person and the child along with justification of the child’s return by the applicant.

Special attention shall be paid to the fact that the place of child’s residence is decisive in resolving disputes about international child abduction, and both child’s or parents’ nationalities are irrelevant.

However, there are situations when the return of the child may be difficult or even impossible. For example, if more than a year has passed since the removal, and the child has adjusted to a new society, or if the child objects to return, and has reached the age when his/her opinion must be taken into consideration.

The Ukrainian Parliament strengthened the regulation on cash and bank card payments in Ukraine in October 2019. However, due to unforeseen circumstances the decision to liberalize these processes was made.
On March 17, 2020, the Parliament passed the law on support of taxpayers for the period of implementation of measures aimed at preventing the emergence and spread of coronavirus disease (COVID-19). The law is aimed at protecting both small and large businesses from the negative effects of unused economic potential. One of the provisions of this law establishes the deferral of use of cash registers.

In case you deal with cash – you need to have the cash register Payment by card, through a terminal, which is equal to cash transactions. Starting from August 01 2020, the cash register becomes a part and parcel for all small and medium-sized enterprises who receive payments in cash or by means of bank cards.
Please note, payments by card, acquiring systems, tokens are deemed cash transactions.

The cash register is obligatory for all business entities who deal with cash and use simplified tax systems (groups 2, 3, and 4) starting from April 01, 2021.

The special transition period is provided by the new law for private entrepreneurs. For instance, until January 01, 2021, for the PEs, who enjoy the 2-4 simplified tax group tax regime and have the income not exceeding 1 mln. UAH within 1 calendar year, the use of cash register is not obligatory, except for the PEs of the following types of activity:

● sale of technically sophisticated household goods, subject to warranty repair;
● sale of pharmaceuticals, medical products, and provision of chargeable healthcare services.

For the period from January 01, 2020, through April 01, 2021 cash registry is not mandatory for use in Ukraine by PEs who use simplified tax regime (of the 2-4 groups) except for those, who:

● provide services (sell goods) through the Internet;
● sell technically sophisticated household goods, subject to warranty repair;
● sell pharmaceuticals, medical products and provide chargeable healthcare services;
● sell jewelry and household items made of precious metals, precious stones, organogenic stones, and semiprecious stones;
● resell the used and secondhand goods in stores (KVED code of activity 47.79);
● are engaged in restaurant, café, fast food activities (if such an activity is other than specified in par.11 Art.9 of the Law on Cash Registers);
● provide travel services;
● are engaged in the activity of hotels and similar accommodation for temporary stay (KVED code of activity 55.10);
● sell textiles (except for market sales for cash), parts and equipment for vehicles (following the list approved by the act of the Cabinet of Ministers of Ukraine).

Under all circumstances, the use of a cash register is not mandatory for:
● group 1 single tax PEs;
● business entities, which use the non-cash form of funds transfer from the payer’s account to the recipient’s account, without the use of electronic payment means, payment receipts, tokens, etc.;
● business entities, whose activities do not fall under the SFS Classifier (mainly manufacturers);
● business entities, whose activities fall within the exceptions provided by Article 9 of the Law.

Cash-register machine intended to be used in business activity has to be registered with the Tax Service of Ukraine and this procedure shall take some time (at least 5 business days). The type of the cash-register machine must be included in the list of accredited types of cash registration machines for use in Ukraine, approved by the Ukrainian authorities. In case you receive payments only through bank (bank-to-bank transactions), a cash register is not required.

Ukraine has tightened security preventing the spread of coronavirus COVID-19 across Ukraine.
Ukrainian Prime Minister Oleksiy Honcharuk has announced that starting from 24.02.2019 temperature screening measures will be taken by the force of the State Border Guard Service, the Ministry of Health of Ukraine and other state organs at all border crossing checkpoints.
The State Border Guard Service informs on its official website about constant temperature monitoring of every person coming to Ukraine from all over the world.

The legal basis for the safety measures taken against coronavirus in Ukraine are the Ministry of Health of Ukraine Orders No. 518 dated 24.02.2020 “On Approval of Recommendations on the Actions of Pharmaceutical Workers in the Conditions of Prevention and Dissemination in the Territory of Ukraine of Diseases Caused by the Covid-19 Coronavirus” and No. 552 dated 25.02.2020 “On Approval and Implementation of Standards of Medical Care for Coronavirus 2019 (СOVID-19)”.

What will happen if fever is observed at the border crossing checkpoint? Any person with fever and other early signs of the coronavirus will be sent to the hospital for further examinations and contamination confirmation / rebuttal.
According to the current data, there have been no confirmed cases of coronavirus in Ukraine.

Long before the end of 2019, the EXPATPRO team started making projections for 2020. We constantly follow the political situation and economic environment within our country while working with both foreign and Ukrainian investors. In fact, it is our company’s progress that best displays the country’s investment climate. At the moment, the state of affairs demonstrates business environment recovery able to attract an ever-increasing number of large-scale and effective investments.

Nowadays our clients are constantly seeking projects that interest them. Agricultural sphere, high technology, and alternative energy are of the highest interest. The government anticipates $50 billion of investment inflow over the next 5 years. It is absolutely possible given the establishment of favorable business conditions. As soon as Ukrainian businessmen realize it is comfortable and safe to start their own long-term vision business, it won’t take long for foreign businessmen to join. This will happen when Ukrainians begin sharing the system workflow with their foreign colleagues. Hence, it is our priority for the immediate future to gain primarily local entrepreneurs’ trust.

According to the annual survey results of the European Business Association, Ukrainian businessmen have high expectations for the year 2020. To be exact, 77% of interviewees expect favorable business dynamics growth, exceeding by 3% the preceding year’s rate. Back then, the pessimistic sentiment was due to the presidential election. Nevertheless, the positive dynamics return is a good sign that implies rapid situation stabilization.

However, it is worth noting that such optimism derives rather from hopes and expectations than from the previously met businesses’ needs and requirements. Thus, it is the government’s priority today to put in great effort to meet those hopes. Besides, it should be kept in mind that a single person is unable to change the situation without team support and integrated solutions aimed at numerous governance areas. And, business representatives, for their part, should continue to reveal and communicate the message regarding their requests, preferences, and vision of change. The government and authorities, for their part, are expected to take action towards protecting property rights and creditors, anti-corruption efforts, as well as land market establishment.

The first step towards progress in the protection of property rights and creditors was the enacted law “On amendments to some legislative acts of Ukraine on promoting investment activity in Ukraine.” It does have the potential to enhance Ukrainian business and investment climate since the chosen ways of improvement were the result of the integrated assessment insuring that the Ukrainian legislation is in conformity with the practice, described by the World Bank Group in Doing Business rating methodology. This law is aimed at the elimination of some legal gaps as well as the incorporation of innovative legal instruments into the Ukrainian legal system. For instance, it is expected that the adoption of the law will result in the reduced violation of the minority shareholders’ rights, lowered credit resources prices, reduced costs for the construction of residential and non-residential facilities, increased quality of justice in terms of business affairs, and shortened processing period of economic disputes. Furthermore, there is a plan to increase the number of Limited Liability Companies operating under the LLC model articles.

One of the Ukrainian business environment constants is the investors’ expectation of anti-corruption initiatives. Due to the existence of the corruption factor in the country, investors are obviously afraid to lose their funds, and the law will not be on their side in that case. The understanding that local players still happen to have more power, and their own levers of influence, restrains the investment inflow into Ukraine. Therefore, we expect the efforts against corruption to be continued and the authorities’ decisions to be accurate and effective. Moreover, it would be highly appreciated if the process of the economy “coming out of the shadows” is prompt. It often happens that the real business-processes and cash flow are not declared, or stored in cash. This leads to a delay in market development.

Another expected event is the creation of the land market, which caused numerous discussions. This initiative has been one of the new government’s key promises, and the relevant law was already adopted in its first reading. Upon the appropriate legislative framework, the new path for the inflow of Ukrainian and foreign investments will be created. It is likely the sovereign and private funds will become the new key land buyers and, thus, the projects are expected to be large-scale.

Overall, the investment climate will continue enhancing if appropriate policy decisions are made and Ukraine’s actual economic development is in line with the government’s projections and targets. In particular, it means the reduction in the discount rate from 16.5% to 8% and the control of inflation at 5%. Today, the capital is still too expensive for investors, and the business environment remains unstable. Still, there are solid grounds to expect positive change and qualitative progress.

Hence, the EXPATPRO team will continue advising investors to believe in Ukrainian business and to develop it in 2020. We are sure that the government is on the right track, and consequently, the Ukrainian market will increase its investment attractiveness throughout the year. At ours end, we shall keep the interests of Ukrainian and foreign businesses safe, as well as contribute to the recovery of the business climate.

The National Security and Defense Council of Ukraine “On urgent national security measures in the context of an outbreak of acute respiratory disease COVID-19 caused by the coronavirus SARS-CoV-2” by the decision of March 13, 2020, (link) resolved:

• To close the borders of Ukraine for regular passengers (including flights, bus and rail connections) starting from 0 h 0 min on March 17, 2020, for the next two weeks.
The border crossing for Ukrainian citizens is possible only by private transport (cars).

• To suspend entry to the territory of Ukraine of foreigners and stateless persons from 0 h 0 min on March 16, 2020, for the next two weeks, except:
– foreign citizens who hold a permanent or temporary residence permit in the territory of Ukraine;
– by individual decisions of the Ministry of Foreign Affairs of Ukraine for the accredited employees of diplomatic missions, consular posts, representations of international organizations, etc.

According to the resolution of the Cabinet of Ministers of Ukraine “On Prevention of COVID-19 Coronavirus Distribution on the Territory of Ukraine” as of March 11, 2020, a quarantine has been enforced starting from March 12 through April 3, 2020, in Ukraine.
Prohibiting the following:
– to attend educational institutions by its applicants;
– to hold all mass and public events involving more than 200 people (theaters, concerts, conferences, and other events) except for the measures necessary to ensure the work of state and local self-government bodies. Sporting events are allowed without the participation of spectators (fans).

On March 17, the Kyiv city administration decided to tighten measures and restrict:
– the people’s travel between the city of Kyiv and other populated areas of Ukraine;
– holding cultural, sports, social, religious and other events with mass participation of the citizens;
– operation of catering establishments: fast food establishments, restaurants, cafes, bars will suspend work, except for online food delivery orders;
– shopping malls will suspend work, except for grocery and hardware stores, household stores and pharmacies. Gas stations, banks, and ATMs will continue to operate.

The work is temporarily suspended for:
– Sports complexes and halls;
– Public service establishments;
– SPA salons, beauty salons, saunas, beauty parlors, massage parlors, hairdressers, tattoo parlors and others;
– Entertainment establishments – discos, night clubs, computer clubs.

Please note that Embassies suspended temporarily the issue of visas, as starting from 14 March 2020 Directorate General for Consular Service of the Ministry of Foreign Affairs of Ukraine is closed to applicants, due to comprehensive quarantine measures introduced by the Government of Ukraine. No walk-in applications will be received up to further notice.

Globalization is a powerful trend that has involved almost all countries worldwide. Ukraine makes necessary changes, implements new instruments, procedures for evolving and fitting its legislation with the modern requirements for the economic development process to benefit of the globalized world as much as possible. Some of the trends in the policy of the Ukrainian government are creating better opportunities for investors, easing the procedures for the legalization of foreigners in Ukraine.

On the 23rd of May 2017, the Parliament of Ukraine adopted the Law of Ukraine No. 2058-VIII On Amendments to Some Legislative Acts of Ukraine on Removing Barriers to Attracting Foreign Investments. This Law significantly changed the procedure of issuing and prolonging permits for the employment of foreigners in Ukraine. Thus, the Law of Ukraine No. 5067-VI On Employment of Population (hereinafter – the “Law”) was amended a lot.

The new procedure of issuing work permits came into force on the 27th of September 2017 and is actively used by the Employment centers issuing the work permits. The first experience of applying for work permits as per the changed procedure (and issues related thereto), make it possible to analyze whether changes to the legislation were appropriate and effective.

The aforesaid amendments to the Ukrainian legislation remarkably decrease the bureaucratic burden on employers. The procedure of filing documents was significantly simplified. Now there is no need to provide the criminal records clearance papers and medical documents of the employee to the employment center. The procedure of applications for foreigners’ work permits review was also liberalized: the suspension in the process of issuing work permits (as a procedural instrument) was added. Now employer, after suspending the review of the application, can correct errors and inaccuracies in the documents. For example, previously, even clerical error was touted as false information and it was the reason for a set of documents review rejection

The fact that now there is no need to confirm the qualification of the employee and the absence of qualified employees in the labor market of Ukraine simplifies the procedure of obtaining the work permits for foreign employers. For example, the requirement of a candidate’s education documents provision was canceled.

These changes are logical: previously the Ukrainian government limited the employers` freedom to choose the employee by obliging a foreigner to have a university diploma of the same specialization as his intended work in Ukraine and proving that no Ukrainian can perform such a work, etc. Moreover, the changes also have reduced the time losses, as no apostille for education documents is required, and the 3 weeks long procedure of opening and closing the vacancy is no longer mandatory.

Naturally, there is also the other side of such “liberalization”. The level of foreigner’s salary should be at least 10 times more than minimal salary set by the legislation of Ukraine (except certain categories of employees, such as business founders, foreign IT professionals, employees of creative professions, graduates of universities that are among the world top 100 ratings).
Separately, the state clearly has taken a step towards investors. For the first time, the validity of work permits for foreigners can be up to 3 years for shareholders and beneficiary owners who work in the business. Moreover, the employer has the right to determine the exact term of such employment at its discretion. The increase of the work permits’ validity term should affect the investment attractiveness of Ukraine positively.

At the same time now, the legislation also gives the right to the investors (shareholders and beneficiary owners) to get Ukrainian residency permits for 2 years while being not employed by their companies. The only requirement is that the amount of investment should be not less than 100 000 Euro. Globally, such an amendment gives an opportunity for foreign investors to be members of the company’s supervisory board without holding a managing position. Thus, there will be no conflict of interest between the two statuses. Now foreigners have more options for the legalization of their stay in Ukraine.

A noteworthy fact is that the procedure of granting permits for the foreigners’ employment is completely regulated by the norms of the legislative act. The act’s text was supplemented by the adoption of the Law of Ukraine On Amending Some Legislative Acts of Ukraine on Removing Barriers to Attracting Foreign Investments. Earlier the procedure of issuing, prolongation and cancelation of employment permits for foreigners and stateless persons was regulated at the level of the by-law normative legal act, approved by the Resolution of the Cabinet of Ministers of Ukraine as of 27 May 2013 (hereinafter – the Procedure).

Nevertheless, the law does not adjust the procedure of issuing work permits for foreigners in Ukraine in full. Some legal relations regulated by the Procedure remain vague in the Law and, obviously, need additional, specified regulation. At the same time, the norms of the Procedure don’t correspond and even contradict the Law, thus it must be amended (the Procedure is not currently applied, however, it is still in effect). For example, there is still no approved form of applications for the issuing, prolongation and exchange of work permits for foreigners (at the moment, preliminary forms are published on the websites of employment centers).

It stands to mention that the text of the Law does not provide for transitional provisions at all. Thus, the issues of the Law use to previously issued work permits remain unregulated. For example, previously the minimum salary for foreigners was the same as for citizens of Ukraine. Now there is a gradation (as already mentioned above). There are no issues with obtaining new work permits for foreigners (the corresponding salary level is specified in the employment contract). But in the case of prolongation, the level of the salary is not verified in practice. The list of documents that are submitted for the foreigners’ employment permits prolongation doesn’t contain any confirming salary level.
Another issue is that according to the current requirements of the Law when the company submits for the work permit for the shareholder (ultimate beneficiary owner) of the company, the authorized capital of the company must be already completed. According to p.2.5, part 2, article 42-2 of the Law, this fact should be established by the territorial employment agency itself.

The implementation of this rule of the law seems quite problematic for several reasons. First, it is necessary to establish in what form the authorized capital is formed (monetary, property, property rights, etc.). Second, it is not clear who and in what form can and should be requested for such confirmation. Moreover, due to the clearly defined short period of the work permit application review (7 working days), the implementation of such a provision, in general, seems almost impossible. The timing of sending of the relevant requests, the preparation of the answer, its sending and receiving may take long. In practice with the application employers should submit certificates, guarantee letters that confirm compliance with the requirements of the law.

There is one more reason: the requirement of the authorized capital formation in full is quite difficult to implement in companies with numerous founders. After all, formally, not making a one-hundredth share of the authorized capital results in a refusal to issue the work permits for all shareholders of the company.
Also, we would like to point out another category of specialists that has specific rules for the work permits issuing. This includes representatives of creative professions whose work duties are related to the objects of copyright and/or related rights according to clauses 8-4, part 1, article 1 of the Law. They include photographers, writers, journalists, art specialists, artists, performers, scientists, and many others. It is a rather rare basis in practice for issuing permits for the employment of foreigners. But if the employer needs to engage such a foreign employee he will need to file a notarized copy of the document that identifies such an object of copyright and/or related rights and confirm authorship. Although the text of the Law clearly determines that the main work duty of this group of foreign employees is creating objects of copyright and/or related rights. Obviously, this requirement is unjustified as such because objects will be created in the future and for this, the work permit is obtained. Moreover, according to the current legislation of Ukraine in the intellectual property area (Article 11 Law of Ukraine No. 3792-XII On Copyright and Related Rights), there is no need to register copyright or an object of copyright, and if there is no other evidence the author is the person designated as the author of the work. Besides, not all objects of copyright can be notarized in a fixed form allowed in Ukraine (for example, video materials, etc.).

Summing the results of the first “new way” experience, we would like to note that the current procedure does involve a relatively simplified process for work permits, brings it into line with modern requirements for administrative procedures such as clear and short terms of applications review, the possibility of suspension, correction of minor errors, the possibility of selecting the necessary time for issuing a permit, etc. At the same time, the issues of “transitional” provisions, the adoption of a by-law normative legal act that will fill the gaps left by the Law, as well as the presence of the above inaccuracies of the Law remain. This allows us to conclude that we should expect amendments and changes in legislation in the sphere of the employment of foreigners in Ukraine.

Visa regime for citizens of the migration risk countries

Ukrainian visa policy contains a term, known as the “migration risk country”, which means that such nationals shall apply for the Ukrainian visa only in the Ukrainian consulates in the country of their citizenship, or in the country of temporary or permanent residence (such citizens have to be the holders of temporary/permanent residence permits issued in that countries).

The list of migration risk countries is established by Ukrainian law and includes mostly people from Africa, Asia, and the Middle East. The citizens of the abovementioned countries are granted a visa to Ukraine only after a special approval from the Security Service of Ukraine and following an interview with the competent authorities.

The citizens of the migration risk countries are more likely to encounter the visa denial. In general, expats from the migration risk countries come across significant difficulties regarding visa issues or face the extremely long terms in getting a visa to Ukraine.
Such difficulties hinder the attraction of potential investors to Ukraine and the development of foreign business in Ukraine and, as a result, reduce the migration attractiveness of Ukraine for foreigners.

Whatever the case, EXPATPRO has extensive experience in visa issues and has successfully helped many potential investors and other foreigners to obtain visas to Ukraine.

Currently, 70 following countries are included to the list of the migration risk countries:

Afghanistan
Algeria
Angola
Bangladesh
Benin
Botswana
Burkina Faso
Burundi
Cameroon
Cape Verde
Central African Republic
Chad
Congo (The Democratic Republic)
Congo (The People`s Republic)
Côte d’Ivoire
Djibouti
Egypt
Equatorial Guinea
Eritrea
Ethiopia
Federal Republic of Somalia
Gabon
Gambia
Ghana
Guinea
Guinea-Bissau
Guyana
Iran
Iraq
Jordan
Kenya
Kingdom of Lesotho
Kingdom of Tonga
Kingdom of Swaziland
Kyrgyzstan
Lebanese Republic
Liberia
Libya
Madagascar
Malawi
Mali
Mauritania
Morocco
Mozambik
Namibia
Niger
Nigeria
Pakistan
Palestine
Papua New Guinea
Republic of Korea
Republic of South Sudan
Ruanda
Russian Federation
San Tome and Principi
Senegal
Sierra Leone
Sri Lanka
Sudan
Syria
Tajikistan
Tanzania
The Union of the Comoros
Togolese Republic
Tunisia
Uganda
Vietnam
Yemen
Zambia
Zimbabwe.

According to Ukrainian legislation, it has been forbidden to sell and purchase the agricultural land since 2001. Moratorium on the sale of land existed for 19 years and meant that land plots could not be sold, gifted or by any other means alienated, except for inheritance and exchange.

What lands were under the moratorium?

It applied to agricultural lands, namely arable lands, perennial plantings, and hayfields.

What will the new land reform bring?

The parliament has approved the law that lifts the moratorium on the sale of agricultural lands.
The land market in Ukraine shall be opened since July 1, 2021 (in the previous version of the law the starting date has been scheduled for October 1, 2020).

The main provisions of the Draft Law No. 2178-10 “On Amendments to Certain Legislative Acts of Ukraine Regarding the Agricultural Land Turnover” adopted on 31.03.2020 were the following:

• Until January 1, 2024, only the individuals, who are the citizens of Ukraine, shall have the right to acquire agricultural land;
• Admission of foreigners to the purchase of agricultural land in Ukraine will be possible only after the adoption of an appropriate decision to be taken following the national referendum;
• Agricultural lands of state and communal ownership will not be sold;
• The concentration of land in one hand in the first two years after the launch of land reform is limited to an area of 100 hectares;
• Starting from January 1, 2024, Ukrainian legal entities will be allowed to buy up to 10 thousand hectares of agricultural land;
• Payment for the purchase of land plots will be made only in non-cash form;
• Banks may become the owners of the land as part of the collateral collection. Such land plots shall be alienated through the auction within 2 years;
• Legal entities whose shareholders are citizens of the aggressor state, individuals who have been sanctioned, are prohibited to buy land, even if a referendum is held;
• Foreign citizens are prohibited to buy land in the 50-km zone from the state border of Ukraine (excluding maritime boundaries), regardless of the referendum decision;
• The sale price of agricultural plots cannot be lower than their normative monetary value. This norm of law will be valid until January 1, 2030.

More transparency, but new issues for expats. What has changed in the work permit and residency permit in Ukraine?

On May 23, 2017, the Ukrainian Parliament voted for the Law of Ukraine “On Amendments to Some Legislative Acts of Ukraine on Eliminating Barriers to Attracting Foreign Investments”. The law came into effect on September 27, 2017. Due to the provisions of that legal act, the whole procedure of foreigners’ legalization will be considerably changed. To protect the interests of investors the new rules make the whole procedure of acquiring legal status for foreigners in Ukraine easier, transparent and less bureaucratic. At the same time, more strict limitations will be introduced.

NEW RULES FOR THE EMPLOYMENT OF FOREIGNERS

The first big change is that from the end of September 2017 any Ukrainian employer can hire a foreigner without any explanation of the inability to engage Ukrainians for the same position. At the same time, foreign employees get a salary 10 times higher than Ukrainians.
It is worth noting that the list of documents required for a work permit will be reduced. It will consist of general documents such as translation of passport and photos. The new document to be submitted for a Work Permit will be the employment contract draft. Criminal records check, university degrees and medical documents will no longer be necessary.

The new validity terms of work permits will be as follows: as per law, the work permit could be issued for the term of the employment contract but not more than 3 years (for IT employees, the owners of the business, creative sphere employees and highly paid foreign professionals) and up to one year for other foreigners. The work permit may be prolonged an unlimited number of times.

These changes are positive and will ensure the interests of both employers and employees. It guarantees a more stable position that will reduce the number of employer’s communication and burdensome procedures with state authorities. Changes of documents review term will be strictly limited to 7 business days for the issue of a work permit and 3 business days to review the prolongation of a work permit validity term.
The new mechanism of the work permit issue is one of the most positive changes. If the authorized body finds mistakes in submitted documents, the issuing (or prolongation) of the work permit won’t be immediately refused but ‘on hold’ and the employer will be given 7 business days to correct the mistake or discrepancy.

“BENEFITS” AND “POSITIVES” OF THE NEW REGULATIONS.

The new law determines the minimum amount for foreign employees’ salaries equal to 10 minimum salaries in Ukraine (2020 = 47 230 UAH). This requirement is not used for special categories of employees, such as founders and/or shareholders of Ukrainian legal entity, graduates from universities that are among the world top 100 universities in the world rankings, foreign employees of artistic professions and IT-professionals whose salary may be established at any level but not less than minimal salary (4723 UAH).
One of the changes is that the payment for the issue of a work permit will be increased.

To get a 3- year permit, the employer shall pay 6X amount of subsistence minimum for abled persons (2020 = 12 612 UAH) as the state fee.
The same payments will be required for the prolongation of a work permit.

CHANGES IN THE SPHERE OF RESIDENCE.

The new ground for obtaining a temporary residence permit will be added to the list. The investors to the Ukrainian economy making an input to the authorized capital of a Ukrainian legal entity will have the right to obtain temporary residence permit with no need to be employed in a company. The only restriction is the amount of investment in the company that shall be not less than 100 000 EUR. Commonly, the temporary residence permit shall be issued within 10 calendar days (nowadays the term is 15 calendar days) and the administrative fee will be increased – up to the amount of 20 tax-exempt minimum incomes (the cost of both issuing and prolongation is 340 UAH).

There is one more added substantial requirement for an employed foreigner. It will be required to prove that your employer has also 3 Ukrainian employees (who started to work at the company not later than 6 months before prolongation of foreigner’s temporary residence permit). Or the foreigner needs to prove that he has paid taxes for the amount not less than 50 minimum salaries within the last full financial year (2020 = 236 150 UAH) to extend the residency permit of the foreign employee.
To sum up, the legislation changes in the area of foreigners’ employment and residency in Ukraine bring up a more clear, transparent and less bureaucratic procedure but with a substantially more expensive price tag. It is important to note that during the transition period while the law is not implemented, it must be clarified in terms of specifics for documents obtained by foreigners prior to the date and effect of the new law.

Requirements for an E-Visa to Ukraine

The legislation provides the possibility for citizens of some countries (please see the list below) to apply for a visa online. The Electronic Visa (hereinafter – e-Visa) is issued for a term up to 30 days and is intended for single or double entry only, depending on the visa type.

The application for an e-Visa to Ukraine is made through an online application system. The visa is issued without any visits to the consulate and shall simply be printed out.

The Purpose of Visit

An e-Visa may be issued for:

– business;

– private travel;

– tourism;

– medical treatment;

– cultural, scientific, educational or sport activities;

– foreign mass media staff service.

The application for an e-Visa to Ukraine has to be submitted not earlier than 3 months in advance and not later than 1 working day before the intended visit to Ukraine. The applicant shall attach scanned copies of the following documents:

1. The first page of the passport (or another page of the passport containing the personal data of the holder);
2. Documents confirming the purpose of the entry (e.g. tourist voucher, hotel and flight booking / invitation letter from a private person or a legal entity, investment documents / medical documents, etc.);
3. Health insurance policy (with 30,000 EUR coverage);
4. Sufficient funds confirmation (approximately 1,600 USD per 30 days).

Visa Fee

The visa fee for a single-entry e-Visa amounts to 20 USD, 30 USD – for a double-entry e-Visa. In the event of an urgent procedure, the fee shall be double.

Visa fee is compulsory for all categories of foreigners including children under the age of 6, diplomats, representatives of international organizations, and members of the official delegations of highest-level leaders.

The e-Visa applications are processed within 1 working day in case of an urgent procedure, and up to 3 working days in the usual procedures.

Please see below the list of countries the nationals of which require an e-Visa:

Commonwealth of The Bahamas

Barbados

Belize

Kingdom of Bhutan

Plurinational State of Bolivia

Kingdom of Cambodia

People’s Republic of China

Republic of Costa Rica

Dominican Republic

Republic of Fiji

Grenada

Republic of Guatemala

Republic of Haiti

Republic of Honduras

Republic of India

Republic of Indonesia

Jamaica

Republic of Kiribati

Lao People’s Democratic Republic

Malaysia

Republic of Maldives

Republic of Mauritius

Mexican United States

Federated States of Micronesia

Republic of the Union of Myanmar

Republic of Nauru

Federal Democratic Republic of Nepal

Republic of Nicaragua

Republic of Palau

Republic of Peru

Republic of the Philippines

Saint Lucia

Saint Vincent and the Grenadines

Republic of El Salvador

Independent State of Samoa

Republic of Seychelles

Republic of Singapore

Solomon Islands

Republic of South Africa

Republic of Suriname

Kingdom of Thailand

Democratic Republic of East Timor (Timor-Leste)

Republic of Trinidad and Tobago

Tuvalu

Republic of Vanuatu

Usually, all goods brought in across Ukraine’s customs border are subject to VAT (20%) and customs duty depending on the goods type.

It is possible to bring in across Ukraine’s customs border the following goods without written declaration and customs duties but only once per one day:
1) Goods (except for ethyl alcohol and other alcohol distillates, alcoholic drinks, beer, tobacco products, tobacco and industrial tobacco substitutes, fuel) of total value less than 1 000 euros carried through the air-to-air access points.
2) Goods of a total value not exceeding the equivalent of 500 euros and the total weight not exceeding 50 kg carried through other than air-to-air access points.

How to bring in alcoholic drinks and tobacco products?

The importation of alcoholic drinks and tobacco products across Ukraine’s customs border by citizens under 18 is forbidden.
Citizens over 18 may carry the following amount of alcoholic drinks and tobacco products per person in hand luggage or accompanied luggage across Ukraine’s customs border without written declaration and paying customs duties :
1) 200 cigarettes or 50 cigars, or 250 g of tobacco, or aforesaid products in sets of a total weight not exceeding 250 g;
2) 5 liters of beer, 2 liters of wine, 1 liter of alcoholic drinks containing more than 22% alcohol.
If the person importing alcoholic drinks and tobacco products across Ukraine’s customs border, irrespective of their number, was out of Ukraine for less than 24 hours, the custom tax shall be put on. 

WHAT PERSONAL BELONGINGS CAN YOU BRING IN AND OUT?

As per Ukrainian laws, verbally declared personal belongings can be freely carried in and out across Ukraine’s customs border and are not subject to taxation. 

Refer to the full list below:

1) personal hygiene products and individual cosmetics person needs for the period of travel;
2) personal clothes, underwear, shoes showing signs of wear and intended for own use only;
3) personal jewelry, including metals and stones showing signs of wear;
4) stationery;
5) one camera, one video camera, a camcorder with a reasonable number of photos, videos, films, and accessories;
6) one portable projector with accessories, with a reasonable number of slides and/or films;
7) binoculars;
8) no more than 2 portable musical instruments;
9) one portable audio device (including tape recorder, voice recorder, CD player, etc.) with a reasonable number of films, disks, etc.;
10) one portable radio;
11) no more than 2 mobile phones and pagers;
12) one portable TV;
13) no more than 2 portable personal computers and peripheral equipment and accessories; no more than 3 flashcards;
14) one portable typewriter;
15) no more than 2 calculators, electronic books;
16) medications for personal use;
17) ordinary and/or walking baby stroller one for each child crossing the border with one person, and only one if no child travels;
18) one wheelchair for every person with disabilities crossing the customs border of Ukraine, and only one if no disabled person travels;
19) medications transported (forwarded) across Ukraine’s customs border as per the order and in the amount determined by the Cabinet of Ministers of Ukraine;
20) no more than 2 watches;
21) 0.5 liters of Eau de Toilette and/or 100 ml of perfume;
22) sports equipment — bicycle, fishing rod, set of climbing equipment, set of snorkeling equipment, set of skis, set of tennis racquets, surfboard, windsurf, set of golf equipment, and other similar equipment intended for use by one person;
23) special baby food for children suffering from phenylketonuria or other illness requiring special nutrition that is not produced (not sold) in Ukraine, that is carried (forwarded) across Ukraine’s customs border as per the order and in quantity determined by the Cabinet of Ministers of Ukraine;
24) the list and the maximum number of other goods of a person’s everyday needs are determined by the laws of Ukraine.

If you bring in or out the currency equal to or more than the equivalent of 10,000 EUR at Ukraine’s National Bank official exchange rate on the day of crossing Ukraine’s customs border, the currency shall be declared in writing.
Therefore, it’s convenient to carry the currency of 9,999 EUR.

How to bring in pets?

Pets carried by the citizens across Ukraine’s customs border shall be declared in writing and subject to veterinary checks (veterinary certificates and other documents) pursuant to the law.

GOODS THAT YOU CAN BRING OUT FROM UKRAINE

Ukrainians and foreign nationals may export across Ukraine’s customs border goods of total value less than 10 000 EUR without written declaration and paying taxes. If you plan to bring out goods specified by Ukrainian laws (i.e. cattle, oilseed crops) or goods subject to the customs control of total value less than 10 000 EUR, they should be declared in writing, and taxes paid. If you bring out across Ukraine’s customs border goods of total value more than 10 000 EUR, they should be declared, and taxes under the law must be paid, except for the goods listed below. Some of the goods carried by citizens out Ukraine’s customs border of total value exceeding the equivalent of 10 000 EUR, shall be declared in writing without paying taxes:
• goods, taken out due to the departure from Ukraine as of a permanent place of residence;
• goods, as a part of the inheritance issued in Ukraine in favor of a non-resident citizen subject to the confirmation of the estate assets by the notaries;
• goods, temporarily carried by resident citizens out Ukraine’s customs border under a written commitment for their reverse importation.

Ukraine keeps developing and amending its legal system to make our country more attractive not only for large businesses but for the small also. For example, the most common form of running a business in Ukraine is private entrepreneurship, being now the most popular form of small business, IT business and services. According to the statistics more than 1 763 000 private entrepreneurs (individual entrepreneurs) are registered in Ukraine.

Becoming a private entrepreneur (individual entrepreneur) in Ukraine is a relatively simple issue.

Generally, the procedure consists of the following stages:

1) getting Ukrainian tax ID number;
2) registration as PE at the center for administrative services (or before the notary);
3) opening the bank account.

As per the law of Ukraine “On state registration of legal entities, private entrepreneurs and public formations” the following documents will be necessary for a private entrepreneur who is a foreign citizen:
1. passport (with the proper translation into Ukrainian);
2. tax ID;
3. application form;
4. confirmation of the address where the private entrepreneur is registered as the business entity at his/her residence.

The law establishes that the address of residence is the address where the person resides permanently or temporarily.

All the people who legally stay within the territory of Ukraine have to register their residential address. The stamp with the address of residence is imprinted in the Ukrainian documents such as internal Ukrainian passport, temporary/permanent residence permit, refugee’s certificate, references of the person who applied for the protection in Ukraine. Therefore, if you don’t have one of the above mentioned documents you don’t have to register your place of residence in Ukraine. In case you want to become a private entrepreneur – the lease or purchase agreement will be enough.

The private (individual) entrepreneurs are eligible to choose a simplified taxation system and pay a 5% Single tax of the gross income (UAH 5 million max.) from their business activity. Also, the monthly social fee of UAH 1039,06 has to be paid.

Foreign citizens must obtain the work permit to work officially in Ukraine. The company-employer (or the private entrepreneur) files the application form to the local employment center to get for the potential employee the work permit in Ukraine.
Work permit in Ukraine does not give the right to the foreign citizen to choose the place of work and position at his/her discretion. One work permit is for one position, and the employer keeps this document.

Ukrainian legislation stipulates several categories for foreign employees. Each category has the list of documents required for the work permit application. To apply for the work permit, the employer needs to define his/her potential employee group.

There are the following categories:
1) regular foreign employees;
2) special categories of foreign employees:
– foreigners-founders of enterprises;
– IT professionals;
– foreign high-paid professionals;
– graduates of the TOP-100 universities in a world ranking;
– seconded foreign employees;
– foreigners submitting documents for recognition as refugees or as people who need additional protection.

Special categories of foreign employees in Ukraine have some privileges considering salary rate and work permit validity term.

It is also worth noting some requirements to the salary rate for foreign employees. The minimum salary rate of a regular employee is 10 minimum wages specified by the law of Ukraine. If the employer is a public association, charity, or educational institution, the minimum salary rate shall be 5 minimum wages. As for 2020, these are the sums of 50 000 UAH and 25 000 UAH respectively.

Special categories of foreign employees are paid the same way as locals, which means, the salary shall not be less than 1 minimum wage (in 2019 it is 4173 UAH). The minimum salary rate of foreign high-paid professionals shall be at least 50 minimum wages (i.e. in 2020 = 250 000 UAH). Seconded foreign employees don’t receive a salary in Ukraine as it is paid by their employer abroad.

The validity term of the work permit varies within the category. The validity term of the work permit for the general category is from one month to one year. Work permit for special categories can be issued for up to three years. Employers have the right to extend the duration of the work permit an unlimited number of times.

The common list of documents required for the work permit application includes the following:
– a certified translation of a foreigner’s passport into the Ukrainian language;
– foreigner’s photo (size 3.5*4.5 cm);
– a draft of a future employment contract.

The list of specific documents is as follows:
– a certified translation of the relevant diploma (for a graduate from one of the TOP-100 universities in a world ranking);
– a copy of the secondment agreement between Ukrainian and foreign economic entities (for seconded foreign employees).

The law also specifies a list of foreigners who don’t require a work permit for employment in Ukraine:
– foreigners with a permanent residence permit;
– employees of representative offices of foreign companies in Ukraine;
– employees of foreign accredited media;
– participants of international technical assistance projects;
– teachers and scientists invited for work by higher education institutions;
– representatives of foreign naval (river) fleets and airlines serving such companies in Ukraine;
– foreigners who have refugee status or are recognized as people who need additional protection or granted temporary protection in Ukraine;
– professional athletes;
– artists and art workers;
– clerics invited by religious organizations to carry out canonical activities.
It takes 7 business days for granting the work permit and 3 business days for extension of the work permit validity term in Ukraine.

The amount of the state fee for work permit depends on validity term, and in 2020 it amounts to the following sums:
1) for permits valid from one to three years – 12 612 UAH;
2) for permits valid from six months to one year – 8 408 UAH;
3) for permits valid up to six months – 4 204 UAH.

The employer has 10 business days to pay state fees and 90 calendar days to sign the employment contract after a work permit obtained. A copy of the contract must be provided to the local employment center. Failure to submit a copy of the contract is the ground for work permit cancellation.

A work permit does not give the right to stay in Ukraine, but it can be used as the ground for the following immigration to Ukraine. Using a work permit, the foreign citizen can apply for the temporary residence permit of the same validity term as the work permit.

On April 28, 2020, the new law ‘On Prevention and Counteraction of Legalization (Laundering) of Proceeds of Crime, Financing of Terrorism and Financing of Distribution of Weapons of Mass Destruction’ comes into effect and changes life for business entities in Ukraine.

Starting from April 28, 2020, there will be a harsher oversight regarding the efficiency of the structure of business entities in Ukraine.

Ukrainian companies will have to annually update the information about the ownership structure. The form of the document is yet to be approved. As of the moment it is announced, all legal entities in Ukraine, registered before this law came into effect will have 3 months to submit the first report on the beneficiary structure.

It will turn out the more difficult task for those legal entities, which have non-residents in their structure – now it will be required to provide an up-to-date extract from the business registry and copies of passports of the beneficiaries, certified by a notary (with the required apostille, where applicable, and translation into Ukrainian as well).

The next obligation imposed over the legal entities is to annually update information on the beneficiaries in the State Registry. To comply with this requirement, the Ukrainian company will have to submit the application, ownership structure and documents of the owners to the State Registrar (up-to-date extract from the business registry and copies of passports of the beneficiaries, verified by a notary). These documents have to be submitted within 14 calendar days as of the date of the legal entity’s registration.
In case of changes in the structure/information of the ownership, the Ukrainian legal entity will have 30 business days to submit the report to the respective State Registrar and amend the information.

The procedure of the state registration of new legal entities will be amended as well. Confirmation of the ownership structure and the copies of passports of the beneficiaries, certified by a notary are added to the list of the documents that must be submitted to complete the state registration of legal entity.

In case the company fails to comply with the requirements of the new law (failure to submit the report or fit the terms established by the law) a fine will be imposed on the Director or another responsible authority (17 000 – 51 000 UAH).

Our corporate law and business administration team will be glad to help you and your business to comply with the new requirements.

As of March 23, 2020, a fresh negative PCR test is required for entering Ukraine.

On March 22, the Cabinet of Ministers of Ukraine has adopted a Resolution №230, which stipulated, that to cross the border foreigners and stateless persons must have a negative PCR test, made no later than 72 hours before crossing the border.

Foreigners are also required to have a medical insurance policy, which covers the costs of observation and treatment COVID-19, and is valid for the entire period of stay in Ukraine. The policy must be issued by an insurance company registered in Ukraine or a foreign insurance company which has a representative office in Ukraine or a contractual relationship with a partner insurance company in Ukraine (under the contract of an assistance).

In case of absence of an insurance policy and / or negative PCR test, the State Border Guard Service will not allow a foreigner/stateless person to cross the state border.

A similar rule has been introduced for citizens of Ukraine: they need a negative PCR test, made no later than 48 hours before crossing the border, otherwise they will have to spend 14 days in a self-isolation.

Mentioned rules do not apply to:

1) foreigners and stateless persons, who are under the age of 12;

2) foreigners and stateless persons permanently residing in Ukraine,

3) persons recognized as refugees,

4) persons in need of additional protection,

5) employees of foreign diplomatic missions and consular institutions, missions of official international missions, organizations accredited in Ukraine, and members of their families,

6) drivers and crew members of freight vehicles, buses engaged in regular, irregular and pendulum transportation, members of air and sea crews, river vessels, members of train and locomotive crews,

7) servicemen (units) of the armed forces of NATO member states and participants in the NATO “Partnership for Peace” program, who take part in training events for units of the Armed Forces.

Also, from the May 2, 2021 it is prohibited to cross the Ukrainian state border for foreigners and stateless persons, who arrived from the Republic of India or stayed on its territory for at least 7 days during last 14 days (except foreigners and stateless persons who permanently or temporarily reside in Ukraine, foreigners and stateless persons who are spouses or children of Ukrainian citizens, employees of foreign diplomatic missions and consular institutions, missions of international organizations accredited in Ukraine, and members of their families, as well as other categories of foreigners and stateless persons in agreement with the Ministry of Foreign Affairs). Therefore, self-isolation and observation are compulsory for the citizens of Ukraine, foreigners and stateless persons permanently residing in Ukraine, foreigners and stateless persons who are spouses or children of Ukrainian citizens, who cross the Ukrainian state border and arrived from the Republic of India or were on its territory for at least 7 days during last 14 days.

If you are a resident of Ukraine and you have passive income from foreign companies, check whether the new tax regulations apply to you.

The draft law on amendments to the Tax Code of Ukraine under No. 1210 was adopted by the Parliament/Verkhovna Rada of Ukraine and passed in January, and was finally signed by the President on May 21st, 2020. Among other changes to the Ukrainian legislation, the rules of controlled foreign companies (CFC) were introduced.

CFC Rules is the instrument for the tax authorities to prevent aggressive tax planning and tax base shifting. It prescribes that if a resident of some jurisdiction has significant control over a business entity that is structured in the jurisdiction with an extremely low profit tax rate, the income of such business entity shall be declared and taxed in the jurisdiction of the person with significant control.
The taxpayer of the CFC income is the person that holds such control.

The company is deemed as the CFC controlled by a private person – resident of Ukraine when:
1) a private person-resident of Ukraine owns a share in a Company which is more than 50%;
2) a private person-resident of Ukraine owns a share in a Company which is more than 10%, provided that several individuals-residents jointly hold more than 50% of shares in such Company;
3) a private person-resident of Ukraine performs effective control over the foreign business entity (CFC) independently or jointly with the other individuals-residents.

Please note, the CFC income is exempt from taxation if:
– there is a valid double taxation treaty and/or an agreement on tax information exchange between Ukraine and the country where the CFC is located
AND
– either CFC pays income taxes (and the rate is at least 13%)
OR
– the part of the passive income of the CFC is no more than 50%. At the same time, such passive income may be more, provided that such a company has sufficient resources to perform its business activity (staff, equity, etc.) and employs capital in business activities, which results in active income.

Besides, the CFC income is not taxable under any of the following conditions:
– the total income of all the CFCs of one controlling person (from all the sources) does not exceed € 2 million by the end of the reporting period;
– a CFC is a public company, the shares of which are traded on a recognized stock exchange;
– a CFC is an organization that, under the legislation of the relevant foreign jurisdiction, performs charity work and does not distribute income in favor of its founders (participants).

Controlling persons are obliged to submit a report on Controlled Foreign Companies to the Tax Office, simultaneously with the annual declaration on property and income, or corporate income tax return for the relevant calendar year, in e-form bearing an e-signature, in compliance with the law on electronic document management. The report form is to be provided by the Ministry of Finance. No such report form exists yet.

Please consider, that even if the CFC income is exempt from taxation, the controlling person shall submit a report to the tax authorities anyway. The controlling person has to indicate in the tax report the reasons for the tax exemption. In this case, the controlling person is released from the obligation to calculate the profit of the Controlled Foreign Company. At the same time, all other parts of the tax report have to be complete.

The new law provides liability for such violations:
– failure of the controlling person to report on the CFCs;
– late submission of the report;
– failure of the controlling person to disclose some information in the CFCs report.

No penalties and fines during the determination and calculation of CFC income for 2021-2022. Later on, the law imposes a fine in different amounts depending on the violation type: from 50 to 1000 amounts of subsistence level (the current subsistence level = 2197 UAH).

The CFC rules come into force on January 1st, 2021, so all the shareholders still have time to check whether such rules apply to them and get prepared to comply with all the formalities.

A private entrepreneur (PE) in Ukraine is a business entity that is entitled to perform work or provide services as an independent contractor.

When registering as a Private Entrepreneur, one should select the types of activities and the applicable tax system.

Registration Procedure

Any legally capable individual, regardless of citizenship, may register as a PE in Ukraine. The place of residence of the individual within Ukraine does not affect the location of registration as a PE. Therefore, one may register with any registrar in Ukraine (either at a notary’s office or the administrative services centers). Registration takes up to 24 hours after submission of the documents.

Moreover, one may register as a PE online: the applicant shall have the electronic digital signature in this case.

Taxes for PE

PE runs the business under the selected taxation system: general or simplified.

The general taxation system provides for the payment of 18% net income tax. Besides, the PE has to pay 1.5% of the military tax and 22% of the single social contribution to the Pension Fund from net income. Registration as a VAT payer is mandatory if annual turnover reaches 1 000 000 UAH (in Ukraine, VAT is 20%).

The simplified taxation system provides for the payment of a single tax depending on the selected single tax group and is applied with restrictions on activities (the latter means that some activity types are prohibited for taxation under the simplified system). Consequently, a PE can choose one of the four groups of the single taxation system:

1) PE of the first group pays a fixed tax (210 UAH per month in 2020), provides only retail sales of goods or household services to the population, has an annual income of up to 1 000 000 UAH and no employees;

2) PE of the second group pays a fixed tax (944 UAH per month in 2020), sells, produces goods, provides services (performs work) exclusively to the population and / or payers of the single tax, has an annual income of up to 5 000 000 UAH, and no more than 10 employees. Such PEs can work for / provide services to business entities who use the simplified tax regime or only to individuals;

3) PE of the third group has annual income up to 7 000 000 UAH, no restrictions on the number of employees, and pays a single tax of 3% of income (for VAT payer) or 5% of income (for non-VAT payer).

4) PE of the fourth group – farm owners whose tax rates depend on the type of land.

PEs usually tend to choose the third group of single tax, which allows them to conveniently keep records, perform work and provide services to any legal entity or PE and export services (goods, works).

Please take into consideration that restrictions exist in the form of payment for single tax payers: it can be made exclusively in cash (cash and / or bank transaction).

Additionally, the single social contribution to the Pension Fund at the rate of 22% of the minimum wage (that is 1039,06 UAH in 2020) shall be paid monthly.

Worth noting, if a PE receives payments in cash (POS-terminals are also considered as cash transaction) and the amount of income is over 1 000 000 UAH, a special cash-register machine shall be installed.

The major fact against doing business as a PE is that PE is liable with all his property.

PE vs Employeе

A significant number of companies, especially IT companies, in order to optimize the tax burden, often use a scheme, according to which a certain specialist is engaged to work as a PE instead of being hired as an employee. At the same time, the employer significantly reduces the tax burden and avoids certain obligations imposed over him by labor law (vacation, decree, guarantees of dismissal, etc.).
There is a risk that the relationship between the person and the company will be recognized as a de facto employment relationship. And, consequently, result in fines for the ‘employer’.

It should be noted that the legislation on the activities of PE is changing. The procedure for registration and the taxation system for PE are permanently simplified and improved. Frequent changes occur in taxation, the use of special cash registers implemented.

Various initiatives lessen the impact of the PE on reducing budget revenues, for example, several of the recently announced:

●  to approve the criteria that would establish the actual employment relationship between the PE and the company;
●  on the introduction of the fifth group of the simplified tax system for IT professionals (that provides a slight increase to 5% tax rate for PEs in IT, 1,5% military fee, and a higher social tax rate (22% of the two minimum salaries, in 2020 the amount equals to 2078.12 UAH) and special contribution to the development fund, increasing from 1% in 2020 to 5% in 2024 annually);
●  to prohibit PEs from providing any services (in this case, the schemes of avoiding employment relationships will cease to exist).