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Legal advice for concluding contracts in IT sphere

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We are often approached by foreign Clients working in the IT sphere and willing to provide their services in Ukraine. They are mainly interested not only in the process of obtaining a work permit in Ukraine, but also in how to correctly conclude specific agreements and contracts for various projects in Ukraine.


Today we are going to talk about the types of IT contracts most often encountered in Ukraine. We will also discuss the issues that will be of interest to entrepreneurs in the IT sphere who want to open their own IT business in Ukraine.

What will You face when creating IT business in Ukraine?

To begin with, let us briefly outline the situation if you want to open your own firm in Ukraine, which will provide IT services here or abroad.


The first thing you will need to do is to register an appropriate IT firm in Ukraine. You can read more about the registration process of the firm in Ukraine on the page of our services or in the materials of our lawyers on the site.


We can provide both creation of the company from scratch, and registration of you as the employee of this company, obtaining work permits in Ukraine, etc.


A frequent question that arises in the process of IT companies creation is the rental of space for work. Unfortunately, some tenants in the real estate market are not quite reliable. Lease agreements may have various "pitfalls", which need to be noticed and corrected in time.


The next issue to consider at the very beginning of IT business starting is tax planning. It includes the choice of that system of taxation of IT business in Ukraine, which will directly correspond to the volume and nature of work and services that you are going to sell.


Separately, we will consider such an important point as the formalization of labor relations in the IT field, as it concerns both employers and employees in this area.


Our company can help you at any stage of your business functioning - both during its creation and during its existence.


Related article:
How to start Your business in Ukraine?

What business contracts can employees and employers in the IT field enter into?

Time and Material

This contract is most often concluded in a situation where it is difficult to clearly indicate in advance the duration of the work and its scope.


Usually, when such a contract is concluded, the work is divided into stages and specific payment periods are set, for example, once a quarter. This is an advantage for large projects, which can be paid for in instalments.


Advantages:
the flexibility of the contract - its conditions can be changed during the work, you can start work even when there are no technical specifications for the entire project.


Disadvantages:
strong involvement of the customer in the project, requires constant participation of the project manager. If project management is not strong enough - additional costs or failure of deadlines can occur.

Fixed price

This type of contract is convenient in cases where there is a small project with clear deadlines and an already indicated budget.

The main condition of the contract is the price to be agreed before the start of work. Most often, the risks for violation of terms under this contract lie on the contractor. This can lead to a situation where the contractor sacrifices quality for a quicker completion of the project.

In Fixed price contract it will be impossible to make changes in the process of execution. 

Waterfall

This type of contract is used when the contractor needs to deliver a clear statement of work, which should be ready before the start of work. Moreover, the work must be structured into clear steps, but without being divided into parts.

In other words, it will be possible to proceed to the next stage only after the previous one has been completed.

Agile

One of the most flexible contract types on the list. Unlike the previous ones, it is adapted to constant changes. The contract sets out the main motives, concept and ideas for development. 


The parties to the contract are partners rather than the Contractor and the Client. It is important, however, to describe the contractual relationship in full and to stipulate the essential conditions that exist in any normal contract for project execution.


Of course, this is not a complete list of contracts that are concluded in the field, because there are dozens of modifications and dozens of subtypes of these or other contracts, which we have not mentioned today.


But if there is a question on which is the best way to organize your business activity in Ukraine in IT field - we can help you.


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