How to keep personnel records and hire employees in Ukraine? Instruction for foreign investor
Today in Ukraine a large number of companies with foreign investors are being opened. Most often these are companies registered in Ukraine in which the participants are either foreign founders or their foreign companies.
Ukraine is rich not only in resources and favorable geographical location for trade, but also in highly qualified personnel. That is why the most frequent choice for investment in Ukraine are IT, outstaffing, agrarian sector and medicine. Nowadays business in the sphere of electric power trade is also added to this list.
Of course when starting a business in Ukraine any entrepreneur will have a lot of questions - starting with the profitability of the financial model itself, and finishing with the technical nuances - taxes, hiring employees, accounting, working with Ukrainian banks, etc.
Today we will talk about such a part of a company's functioning in Ukraine as work with personnel. How to hire personnel in Ukraine? What to do if you want to bring a specialist from your country? Is it necessary to conclude an employment contract with a staff member or is it possible to work on other terms, for example with an IT specialist?
Read about all this in our article. If you want answers to questions about your specific business, please contact our experts for a personal consultation.
If you plan to relocate foreign employees to Ukraine
In Ukraine there are organizational-legal forms that can somewhat facilitate the relocation of foreign employees - for example, a representative office of a foreign company. But nowadays this form is already outdated, and the registration of LLC is becoming much more profitable.
In this case, for the employment of a foreign employee in a Ukrainian company will need a Permit to Work. We obtain it for all employees, whom our clients plan to bring to Ukraine.
Average time for obtaining Work Permit is about a week. It is possible to submit packages for several employees at once. For example, we had a case of simultaneous work permits for more than 30 employees in Ukraine.
Once you have received the Permit, you can hire the employee. The procedure will be identical to the procedure of hiring a Ukrainian worker, which we will tell you about later. The only difference is that after you sign the employment contract you will need to send a copy of it to the Employment Center within 10 days.
Note: A work permit does not mean that the worker can stay in Ukraine all the time. If you need him in the country more than the visa allows, you need to issue a residence permit. This is also handled by our company.
Related article: Order a legal business plan for activities in Ukraine: what will it give, and what will go into the plan?
If you plan to hire employees in Ukraine
When hiring a Ukrainian citizen to a Ukrainian company you do not need any additional permits. It is necessary that the employee must be over 18 years old, and you need to comply with the requirements established for certain professions - most often these are particularly dangerous jobs. You also set your own requirements for the level of education, experience, etc.
The very registration for work in a Ukrainian company consists of three parts:
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Drawing up an employment order;
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Registration of the employment contract with the employee (in two copies for each party);
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Notification of the State Federal Service for Financial Markets on the hiring of the employee.
Hiring employees, and more importantly, keeping personnel records, is the job of the HR department. You can hire separate staff for this purpose, or you can turn to specialists on outsourcing. Registering a business in Ukraine for our clients, we always offer them additional services, which will include and personnel accounting and bookkeeping, and work with bank accounts of the enterprise.
This helps from the very beginning of doing business in Ukraine not to worry about possible problems with the tax authorities or the State Labour Inspectorate, as well as access to legal advice if necessary.
Related article: How to open a foreign medical center in Ukraine?
What does personnel accounting in a Ukrainian company consist of?
The main tasks of personnel accounting:
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Preparing and submitting reports on personnel to the state authorities of Ukraine.
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Keeping records of hiring and dismissal of employees.
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Maintaining payments to employees - not only salaries, but also other entitlements.
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Maintaining processes of business trips, control over other staff payments and their documentation.
The standard "set" of payroll taxes in Ukraine consists of:
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PERSONAL INCOME TAX - 18%;
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military fee - 1.5%.
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ERU - 22% of the minimum wage.
Violations in the process of human resources and accounting threaten sanctions from both the tax and the State Revenue Service.
How to hire staff on special terms? Director or IT specialists
We were approached by our clients, investors from Liva, who were planning to open a division of their IT company in Ukraine. They instructed us to choose the best form for business registration, develop a financial model of the company, taking into account its activities, as well as hire a foreign director in the company and develop a model of cooperation with IT specialists from Ukraine.
Regarding the director - in Ukraine there is a rule that does not allow registering a company in Ukraine with a foreign director at the head. You can register a company only with a Ukrainian director, but after that there is no problem to replace such a director with a foreigner, provided that he received a work permit in Ukraine.
We have a universal solution - we offer the services of a proven Ukrainian specialist for the position of director, who, after obtaining the work permit for a foreigner, responsibly transfers all the powers to him.
As for the employment of IT specialists, we had the task of administering the system of hiring Ukrainian specialists. There are no problems with this today. The only thing worth knowing is that due to preferences in the taxation system of IT activities in Ukraine, the optimal form of work with IT workers is a contract between a company and a specialist - sole proprietorship.
But in 2022 there is a new opportunity - the project Dia City has been launched in Ukraine, which is open to all Ukrainian IT companies. It gives an opportunity to work with IT specialists via hyg contracts.
Our company develops the process for IT companies to obtain residency in the Diya City program and advises on further work with IT specialists through hyg contracts.
