On 3 September 2023, Ukraine enacted a new Law regulating the activities of representative offices and branches of foreign companies, which significantly simplifies the procedures for the establishment, registration and liquidation of representative offices and branches of foreign companies.
Most of the Law’s provisions will become effective on 3 September 2024. The key changes introduced by the Law include the following:
State registration:
- the registration, introducing changes and liquidation of representative offices and branches of foreign companies (e.g. companies, financial institutions, non-governmental organisations, etc.) will be transferred from the Ministry of Economy of Ukraine to state registrars;
- the payment for registration of a representative office or a branch of a foreign company will be reduced to one cost of living (currently, UAH 2,589 or EUR 65);
- information on beneficial owners and ownership structure of the parent company of a representative office or a branch should be disclosed at the time of the state registration;
- the registration of representative offices and branches will now take up to five business days from the date of submission of all necessary documents;
- information on representative offices and branches will be publicly available in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organisations;
- Russian legal entities will not be permitted to establish a representative office or branch in Ukraine.
Liquidation:
- the liquidation procedure for representative offices and branches of foreign companies will be similar to that of the limited liability companies;
- if the value of assets allocated to a representative office or a branch is not sufficient to satisfy creditor claims during the liquidation, creditors will be entitled to satisfy their claims at the expense of the parent company of such representative office or a branch.
These new rules will simplify the process of setting up and terminating a business presence for foreign companies that prefer to manage operations without establishing a standalone business entity in Ukraine. The clarity that the new Law brings will also improve the confidence of foreign businesses operating in Ukraine.
Legislation: The Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine Regarding the Regulation of Activities of Separate Subdivisions of a Legal Entity Formed in Accordance with the Law of a Foreign State" No. 3257-IX dated July 14, 2023.
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