|
|
|
UKRAINE: EUROPEAN EMERGING TIGERDOING BUSINESS IN UKRAINE
Edition 1 WHY UKRAINEBACKGROUNDINTRODUCTIONGOVERNMENT STRUCTUREMACROECONOMIC SITUATIONFINANCIAL AND BANKING SYSTEMCURRENCY OPERATIONS AND CURRENCY CONTROLINVESTMENT CLIMATETAX SYSTEMPOSESSION OF LAND IN UKRAINEBUSINESS CLIMATE |
Business climate
Visa control
Obtaining a work permit Under Ukrainian law, all foreign citizens should obtain work permits if they intend to work in Ukraine with the exemptions to foreign employees of representative offices of foreign entities in Ukraine (implied that such employees are properly registered with the Ministry of Economy and European Integration). Work permits are issued by the State Employment Centre under Ministry of Labor. Work permits are normally issued for a period of one year. The term of the work permit may subsequently be extended. It should be noted that severe measures are envisaged for those who work without proper permits. A foreign citizen employed without a proper work permit can be immediately deported at the cost of his or her employer. Registration of foreign citizens All foreign citizens who enter Ukraine are registered at the moment they cross Ukrainian border by the officers of the State Committee of Frontier Service of Ukraine. The registration is valid for six months. In order to extend this registration, a foreign citizen should apply for extension to a local OVIR not later than three days before the initial registration will expire. Applicant's passport must be registered in case of visa extension or renewal. Foreign citizens temporarily staying in Ukraine should obtain medical insurance provided by a Ukrainian medical insurance company. Resume on Work permits: · Ukrainian employers must obtain work permits for foreign citizens, who are either employed directly or recruited in Ukraine by foreign companies. · The personnel of representative offices of foreign companies in Ukraine who are employed abroad as well as foreign citizens registered as private entrepreneurs under Ukrainian legislation are not required to obtain work permits for their work in Ukraine. · A work permit may be issued for up to one year with subsequent renewal. The overall time of employment in Ukraine is not limited. · The labor authorities must consider an application for a work permit within 30 days after submission. The foreign citizen is not allowed to start working in Ukraine until the work permit is issued. · Incompliance with the work permit requirements is a subject to penalties, as well as potential deportation of the foreign citizen from Ukraine at the cost of the employer. Payments and cash The Hryvna (international abbreviation for Hryvna - UAH) is the official currency of Ukraine. All shops and establishments accept cash payments in Hryvna. Many stores now accept internationally recognized credit cards. A large number of currency exchange offices are evenly located along the streets. Cash in US Dollars can be withdrawn in several Ukrainian banks which accept Visa and MasterCard. Hryvnas may be withdrawn from ATMs which are placed both in shops and streets. Hotels
Employment issues Conditions of employment in Ukraine are governed by the Labor Code. The main requirements under Ukraine's employment legislation are as follows: - Ukrainian labor legislation requires employers to follow statutory requirements concerning working time, overtime and time-off from work. In Ukraine, working time is limited to 40 hours per week; - The amount of monthly wage shall meet the minimum threshold established by the acting legislation. Wages and all other payments due to employees shall be made in UAH only; - Employees may terminate at any time the employment relationship within the notice period of at least two weeks. The statutory termination notice is two months. - Average retirement age is 55 years for women and 60 years for men. All enterprises must ensure employment of handicapped persons according to quotas specified in the law. The quota for enterprise employing 8 or more individuals equals to 4% of the total number of employees but no less than 1 working place. Refusal to employ handicapped workers within the quota can cause a fine amounting to the enterprise's annual average salary per each working place destined for handicapped worker and not occupied by him/her. Mobile operators There are 4 main mobile operators in the Ukrainian market. The most large-scaled of them are UMC and Kievstar.
Real estate In 2006 prices on real estate in Kiev have increased dramatically. At the same time prices have been raising steady for quite a long period of time. This process has been observed almost in all sectors of the market, for all types of residential premises, in all living areas of Kiev. Average rental prices for business offices in Kiev (USD per sq.m. a month):
Prices for housing real estate in different parts of Kiev (USD per sq.m.):
Prices for accommodations in Kiev (USD per day):
Price on housing real estate in Harkov and Odesa (USD per sq.m.)
Prices for warehouses in Kiev (USD per sq.m.):
The main tendencies of commercial real estate market: · The majority of professional business centers are fully occupied; · The requirements of potential leasers are difficult to fulfill because of lack of free premises; · The growth of rental rate. This information can change due to growing dynamics of price increase for sale and rent. If you are interested in current situation we recommend enquiring separate updated overview report of real estate situation and tendencies. Bank account opening Domestic and foreign currency account restrictions Resident / non-resident status. To acquire Ukrainian residential status, a company must be incorporated in Ukraine. Residents may hold foreign currency accounts on the territory of Ukraine. Residents are not permitted to hold bank accounts in national currency (UAH) abroad, but they may open a foreign currency accounts abroad if they obtain a permit from the National Bank of Ukraine. Non-residents are allowed to have bank accounts which can be denominated in the local currency (UAH) and several foreign currencies. Foreign currency accounts require central bank's approval. Non-residents can open two types of accounts: · 'P' accounts - for domestic business purposes. · 'N' accounts - for cross-border business purposes. Interest-bearing current accounts and term deposits are available. Currency accounts availability
In order to open a bank account client must submit the following documents:
Cross-border payments Urgent payments There is currently no dedicated mechanism (such as TARGET) for effecting urgent cross-border payments. Non-urgent cross-border payments All banks will have their own means of making cross-border payments. There are three different structures, which often work in concert, depending on each bank's international coverage: · Own network. Many of the larger international banks have branches in more than one country. Where possible, a bank will effect a cross-border payment via an internal book transfer. · Alliances with other banks. Some banks do not have enough sufficiently wide international branches network thus they form banking alliances which offer similar payments services to the larger international banks. · Traditional correspondent banking network. Banks continue to rely on their traditional correspondent banking networks to effect cross-border payments on behalf of their clients. With the following countries Ukraine has signed and ratified agreement on avoidance of double-taxation: Austria, Azerbaijan Algeria, Armenia, Belgium, Byelorussia, Bulgaria, Croatia, The Czech Republic, Canada, China, Denmark, Egypt, Estonia, Finland, France, FRG (Germany), Great Britain, Greece, Georgia, Hungary, India, Indonesia, Iran, Italy, Kazakhstan, Kyrgyzstan, Latvia, Lebanon, Lithuanian, Macedonia, Moldova, The Netherlands, Norway, Poland, Portugal, Republic of Korea, Russian Federation, Romania, Serbia and Montenegro, Syria, Slovakia, Tajikistan, Thailand, Turkey, Turkmenistan, Switzerland, Sweden, Vietnam, UAE, USA, Uzbekistan Furthermore according to article 7 of the Law of Ukraine "On the succession of a state of Ukraine", Ukraine implements agreements of USSR regarding avoidance of double-taxation that remain in force until new laws are passed. Agreements of USSR are valid against such countries as Spain, Cyprus, Malaysia, Mongolia and Japan. Norms of deduction of income tax according to agreements on avoidance of double-taxation:
Ukraine has also ratified agreements on avoidance of double-taxation with Brazil, Mongolia, Algeria, Kuwait, UAE, South Africa, Luxemburg and Cuba. Agreements with Slovenia and Syria have been signed |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 |
|
Econimic Development © 2006 |
Who we are ¦ Ukraine ¦ Investment policy ¦ Portfolio companies ¦ Press ¦ Contact us |
 |