Rules for registering a representative office in Ukraine in 2022 and the formation of accounting records

Preparations for the registration of a representative office begin with the formation of a set of documents. This package includes:

• Application for registration;

• Document on the registration of the parent company;

• Reference from the bank where the account of the foreign company is opened, account numbers;

• A power of attorney for the head of the representative office, duly certified;

• Permission of the central bank of the respective country for opening of an account with the right to conduct business activities of the representative office of a foreign company in Ukraine (in some cases);

• Protocol on establishment of representative office and appointment of its manager;

• Office lease agreement (required for information).

Some of the documents that are in the original language, such as permission from your bank or incorporation documents, will need to be translated into Ukrainian and legalised in Ukraine, depending on mutual document legalisation rules between our countries.

One of the relatively new rules for establishing a representative office in Ukraine is the need to register for tax purposes not for the representative office itself, but for the parent company. It is the parent company that becomes the taxpayer in Ukraine.

In any case, the representative office shall have its own address (office), an organized accounting system, and an account in a Ukrainian bank. Further details of all these nuances are given below.

Related article: Will it be possible to relocate my employees to Ukraine?

Procedure for opening an account in a Ukrainian bank for a foreign representative office

It is obligatory to open an account for a foreign representative office in Ukraine. It does not matter whether it is a commercial or non-commercial representative office. 

Important! The head of the representative office must be personally present at account opening in the bank, and have a power of attorney from the representative office. The process of account opening itself only takes an hour or two, but it is worth it to control this process and make sure that the documents issued to you as a result are correct.

Opening an account with a Ukrainian bank is much easier than with most banks in Europe, but you should still be careful when choosing a bank. Such a bank should have a wide network of branches, have experience of working with foreign clients, and have a system suitable for you.

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

What reports should a foreign representative office in Ukraine submit?

Representative offices of foreign companies in Ukraine must file reports with

• tax authorities;

• statistical authorities.

If the representative office has employed staff, it is obliged to submit reports on income tax withheld and contributions to state social insurance funds. Moreover, if your staff include foreign employees who are employed through the issuance of a representation card, you need to take personal income tax into account when calculating their wages and paying taxes on it, and calculate everything so that you are not subject to double taxation.

Tax rates for commercial representative office:

• VAT 20% on revenues in excess of 1 million a year;

• Taxes on employees' wages.

Financial statements are filed with the tax authorities with the same frequency as the corporate income tax return, as it is an integral part of the return. Therefore, if a non-resident is a quarterly payer of profit tax, then the financial statements shall be submitted to the authorities on a quarterly basis. If, however, the non-resident is an annual payer of profit tax, only the annual financial statements shall be submitted to the tax authorities.

If you are planning to register a representative office in Ukraine, or to start your activity in any other way - contact us. We will help not only with registration itself, but also with financial planning of your activities in Ukraine.

The cost of registering a representative office here.