MainPublicationsRepresentative experienceDo representative offices in Ukraine have any tax benefits in comparison with the registration of an LLC?

Do representative offices in Ukraine have any tax benefits in comparison with the registration of an LLC?

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In 2020 we were approached by a foreign entrepreneur who was planning to carry out his activities in Ukraine from now on. The line of work of his company required certain permits, including a construction license. 

In this regard, a number of questions arose:

  • Can a representative office in Ukraine obtain the required licenses?

  • Do representative offices have any tax advantages as compared with Ukrainian companies?

  • What will be more profitable: opening a representative office or a subsidiary in Ukraine?

We provided the Client with complete information regarding his situation and helped to find the optimal solution for his problem. Using his example, we will tell you about the situations in which it is worth planning to register a representative office.

Related article: To withdraw money from a Ukrainian company abroad: tips from a lawyer

In what situations is it better to choose the registration of representation in Ukraine?

Let us name at once several obvious advantages of registering a business specifically through a representative office:

  • Complete controllability of the parent company. 

  • More simplified scheme of employment of your foreign workers. 

Note: transfer of top-management or necessary specialists to Ukraine will be carried out by issuing special cards for the employees of the representative office. 

  • Low cost of registration. Today the state fee for registration of a representative office in Ukraine is about 100 USD.

  • It is possible to provide services or sell goods under the brand of the company without entering into license agreements.

In our Client's situation, opening a representative office was the best option. But as a solution for other entrepreneurs, it can also have disadvantages. For example, our Client needed a construction license, which we helped him obtain. But in most cases, getting a license to operate a representative office is impossible. 

If you are planning, for example, to open a casino in Ukraine, sell alcohol or tobacco or engage in other licensed activities - the best solution would be to register a company with 100% foreign parent company.

Related article: How much does it cost to open a branch in Ukraine?

What to choose?

The choice between representation and registration of a subsidiary in Ukraine depends on your goals and the nature of your business. The representative office is chosen for more control over the actions of the head, while agreeing to put up with some restrictions in the conduct of business activities.

Our team focuses primarily on the goals and needs of our Clients, which helps to determine the optimal work scheme for entering the Ukrainian market and convenient business conduct.

Important! Our services do not end after registration of representation. If there are any changes in the laws of Ukraine, directly affecting your activity - you will know about it. We are also ready to help with our legal qualification in solving any issues that arise before your business in Ukraine.

You can find out the cost of registering a representative office here or from our specialists.

Want to start a business in Ukraine without unnecessary loss of time and money? Please contact us! We will find the best solution for you and help you bring it to life.


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