A foreigner (non-resident) as a director

When registering a legal entity on the territory of Ukraine, a foreign investor would like to seetheir compatriot as a director. This decision is understandable, as the owner of the business always prefers to deal with someone who he knows, whom he trusts and with the help of whom he will be able to monitor current business activities of the enterprise. Let us consider some nuances of employment of foreign citizens and the procedure of appointing a non-resident as a director in accordance with current legislation in more detail.

What does the Law on employment of foreigners state?

1.      Both foreigners and citizens of Ukraine have the same rights and obligations concerning labour relations, unless otherwise is provided for by laws of Ukraine or other international legal acts.

2.    Foreigners have the right to be employed only if the employer has a permit to employ foreigners and/or stateless persons. The exception are persons permanently residing in Ukraine, as evidenced by their residence permit. This permit is issued by the State Employment Service of Ukraine.

3.      The obligatory documents necessary for registration of legal entities in Ukraine, including ones with non-resident founders, include a Registration Card, where information about the director shall be entered. In our case it is information on a foreign citizen, who will hold the post of the director.

Taking into consideration all of the above said, we can state with confidence that it is possible to have legal employment relationships with foreign nationals in Ukraine only if the employer gets a permit for employment of foreigners.

However, a reasonable question arises: how can a foreign business owner comply with the law and follow the procedure if at the time of registration of the legal entity they simply lack the necessary documents to obtain a permit for employment of foreigners?

Thus, we come to the conclusion that at the time of registration of a newly created legal entity, only a citizen of Ukraine or a person holding a residence permit can be appointed a director. Otherwise, the State Employment Service will apply penalties to the employer twenty-fold of the minimum wage.

 

How to solve the problem?

As an option, one may hirea nominal director for six months and avoid the problem of obtaining a permit for employment of foreigners during this time.

However, hiring a nominal director is not the only way to resolve the issue.

Contact our attorney company, and we will find a way to address this issue in a way, which wouldfit your case exactly.


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Checking your counteragent (business partner, company). Business in Ukraine.