After the Revolution of Dignity in 2014 Ukraine has been continuously taking measures to attract more foreign investments into the country. Among other, those measures include improvement of legal framework to attract skilled and educated foreigners to work in Ukraine. Just recently, the new piece of legislation – the Law of Ukraine “On Making Amendments to Certain Laws of Ukraine on Elimination of Barriers to Attraction of Foreign Investments” (the “Law”) – has been passed by the Parliament to enhance attractiveness for expats to work in Ukraine. The overview of the key improvements is below.
The key conceptual change is that now a Ukrainian employer does not have to prove to the authorities that there is no suitable Ukrainian candidate for employment. This reduces the risk of possible work permit rejections.
On the upside, expats will need to collect less documents for their Ukrainian employer to apply for a work permit for them. The following documents have been struck out of the list: (i) a certificate about absence of criminal record, (ii) a medical certificate, and (iii) a diploma of a potential expat employee (still may need to be provided in some cases).
Special rules will apply to certain categories of foreign employees such as: (i) so-called “highly paid” professionals with a salary not less than fifty statutory minimum wages (approximately EUR 5,000), (ii) founders/shareholders/beneficial owners of legal entities incorporated in Ukraine, (iii) graduates of the top 100 universities (per the list approved by the government), (iv) professionals in the art industry, and (v) IT professionals (the “Favoured Employees”). Proof documents will have to be provided to qualify for such status. For example, professionals in the art industry will need to provide notarized copies of documents confirming their IP rights to artistic work; graduates of the top universities will have to provide the copies of their diplomas. The most important new rule is that while a general term of a work permit is one year, the work permit term for the Favoured Employees is three years. A temporary residence permit – a document allowing an expat to freely stay and enter and exit Ukraine without the need to comply with 90/180-day limitation under the visa-free regime – can now be granted to Favoured Employees for three years too.
The Law expressly provides that a Ukrainian individual, who is registered as a private entrepreneur, may employ expats under the same conditions as companies. In addition, as a part of the work permit application package, the Law re-instates the requirement for an employer to submit a copy of a draft employment agreement to be entered into with a foreign employee. This requirement applies to both legal entities and individual entrepreneurs. Apparently, this could be viewed as an additional safeguard for expat employees because non-compliance of the employment agreement with Ukrainian law (employee-friendly) can lead to rejection of a work permit.
On the downside, the Law increases minimum remuneration requirement for foreign employees. The minimum salary must be not less than ten statutory minimum wages (around EUR 1,000 at the current exchange rate). In contrast, under the old laws, a salary for a foreign employee should not have been less than one minimum wage (UAH 3,200, being around EUR 110).
Notably, this rule does not apply to (i) Favoured Employees (except for highly paid professionals, whose salary cannot be less than fifty statutory minimum wages (approximately EUR 5,000)), and (ii) social and charity organizations and educational institutions where a salary cannot be less than five minimum wages (approximately EUR 500).