{"id":167,"date":"2017-02-07T14:13:08","date_gmt":"2017-02-07T14:13:08","guid":{"rendered":"https:\/\/baron.yakimaxim.site\/agency-relations-in-ukraine\/"},"modified":"2024-08-22T09:09:28","modified_gmt":"2024-08-22T09:09:28","slug":"agency-relations-in-ukraine","status":"publish","type":"post","link":"https:\/\/frishberg.com\/uk\/agency-relations-in-ukraine\/","title":{"rendered":"Agency Relations in Ukraine"},"content":{"rendered":"
Many foreign companies prefer to hire Ukrainian agents instead of registering a representative office or a limited liability company.\u00a0 In fact, the least expensive way to enter the Ukrainian market is by retaining a reliable local agent: no need for company registrations, directors or accountants, and no local taxation. \u00a0Simple, right?\u00a0 Like everything else in Ukraine, however, this seemingly easy task is highly regulated and requires attention in order to avoid problems.\u00a0 Below we summarize the key issues in finding a reliable local agent.<\/p>\n

I.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Definition of an agent<\/p>\n

The Commercial Code of Ukraine (the \u201cCommercial Code\u201d) introduced a new type of intermediary services \u2013 commercial intermediation or agency relations, whereby any foreign or local business entity may retain the services of a commercial agent who provides intermediary services to business entities and individuals by acting on behalf of the party (the \u201cprincipal\u201d) requesting such services from the agent.\u00a0 On the basis of an agency agreement, the principal can retain constant control of all actions performed in its interest by an agent.<\/p>\n

A commercial agent must be a duly registered natural person or legal entity which, pursuant to its authority based on an agency agreement, serves as an intermediary between a principal and a third party (customer, end user, etc.).\u00a0 In other words, an agent may not have a personal interest in the ultimate agreement reached between its principal and the third party other than those interests reflected in the agency agreement (commission, agency fee or remuneration, etc.).<\/p>\n

II.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Possible services that an agent can perform in Ukraine<\/p>\n

Since an agent provides its services on behalf of the principal, an agent can perform all types of services that are not subject to licensing or other specific conditions established by Ukrainian laws.\u00a0 Thus, you should verify whether Ukrainian law prohibits commercial intermediation or whether a license is required to undertake the specific activity before concluding an agency agreement.<\/p>\n

Generally, licenses are non-transferable in Ukraine and, therefore, a license holder may not hire an agent to undertake its licensed activity on its behalf.\u00a0 Some licensed activities include banking activity, securities trading, financial services, production and trade of tobacco products and alcoholic beverages, telecommunications, construction, etc.\u00a0 Overall, there are just over 30 types of activities subject to licensing in Ukraine.\u00a0 In addition, in some cases Ukrainian laws provide that a principal should meet certain conditions in order to be active in a particular sphere, such as having a registered presence in Ukraine, having a certain minimum authorized capital, employing qualified personnel, etc.<\/p>\n

III.\u00a0\u00a0\u00a0\u00a0\u00a0 Practical steps in finding an agent<\/p>\n

An agent in Ukraine may be found by:<\/p>\n