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Liquidation of branch office of foreign company in Ukraine

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At a certain point in its development a business may no longer require to maintain its branch in Ukraine. In this situation a foreign parent company faces a number of issues related to proper liquidation of its rep.office in Ukraine. Winding up office of company from foreign jurisdiction in our country requires a great deal of efforts. It may take many months and requires constant control of qualified lawyers that will represent such company. This is why the procedures should be entrusted with professionals. Officials of the parent corporation will need some basic knowledge too.

Representative office dissolution process consists of the following stages: making of decision to terminate activities of foreign office by the parent corporation, initiation of audits of controlling authorities, receiving of certificates, deregistration by the Ministry of Economic Development and statistics authorities. Successful completion of each stage requires experience of involved specialists. More details on all the abovementioned stages are available below.

Liquidation procedure begins when competent body of parent company makes decision in this regard. The decision has to be formalized in accordance with regulatory requirements of the state of parent company’s location, translated into Ukrainian as well as legalized/certified by means of apostille. The legalization rule does not apply to states that entered into certain international agreements with Ukraine.

Text of the official decision along with other documents has to be filed with the controlling agencies in accordance with Ukrainian legislation in order for them to be able to conduct final audit of activities of branch office. In practice, only three years preceding the audit are subject to review by representatives of the governmental agencies.

Audits that are conducted by the controlling authorities are characterized by the fact that majority of governmental bodies exceed the term of audit conduction provided by the laws of Ukraine explaining such delays by lack of employees and time.

Simultaneous submission of documents to all the controlling authorities which conduct audits is impossible since some agencies have right to accept documents only upon receiving certificate that proves absence of debts and was previously issued by a different body. For example, Ministry of Economic Development and Trade of Ukraine among other things requires provision of certificate from customs authorities as well as form 12-OPP from tax bodies.

Also, it should be noted that almost all certificates have limited validity term. For example, certificate on absence of tax debt (form 12-OPP) that is issued by the tax authorities is valid only for 2 month upon its issuance. As was mentioned above, the Ministry of Economic Development of Ukraine cannot accept documents without such certificate. The Ministry, on the other hand, has one calendar month to conduct audit and issue certificate (notification) about striking off the register of rep. offices. In case if validity term of any required document expires, it will be necessary to apply for the same authority to issue the document one more time.

Thus, in order to ensure quick completion of all audits, it is important to know their order and documents that are required for initiation. However it is not subject of this article.

The final stage of representative office winding up is striking off the official state register of legal entities and sole traders. By this time such office has to receive all the certificates about deregistration and each one of them has to be valid.

Also, there are some differences between procedure of liquidation of representative offices that perform exclusively marketing and representative functions and those involved in commercial activities.

Our law firm has significant experience of work with foreign clients in regard to closing of rep. office of foreign corporation in Kiev and can provide all the necessary legal advices or the actual services related to the matter.

Views: 5629