MORE TRANSPARENCY, BUT CHANGES IN THE OBTAINING PROCEDURE.
On May 23, 2017, the Ukrainian Parliament voted for the Law of Ukraine “On making changes to some legal acts regarding removing barriers for foreign investments”. According to the provisions of that legal act, the whole procedure on the legalization of foreigners will be considerably changed. Currently this act is awaiting the President’s signature. The new rules are aimed at making the whole procedure of acquiring legal status for foreigners in Ukraine easier and transparent for the purpose of protecting the interests of investors and making it less bureaucratic and at the same time more strict limitations will be introduced.
NEW RULES FOR THE EMPLOYMENT OF FOREIGNERS
The first significant change in the sphere of labor regulation for foreigners will be for private entrepreneurs (so called “FOP”, “SPD”) to be included in the list of employers. This mean, that only legal entities will have the right to employ a foreign citizen. It is worth noting that the list of documents required for a work permit will be reduced and will consist of general documents such as translation of passport and photos. The requirements of new documents to submit for a Work Permit will consist of the employment contract dra . Criminal records, university degree and medical documents will no longer be needed. The new validity terms of work permits will be established as such: a dra of the law says, the work permit could be issued for the term of the employment contract but not more than for 3 years (for IT sector employees, the owners of the business, creative sphere employees and highly paid foreign professionals) and up to one year for other foreigners. The work permit may be prolonged with an unlimited number of times. These changes are positive and will secure interests from both employers and employees and will guarantee a more stable position that will reduce the number of employer`s communication and burdensome procedures with state authorities. Changes to the term for consideration of documents will be strictly limited to 7 business days – for the issue of a work permit and 3 business days for considering the extension of a work permit validity term. One of the most positive changes will be the new mechanism that will be implemented in the sphere of work permit issue – if the authorized body finds mistakes within the documents submitted, the issuing (or prolongation) of work permit will not be refused but will be ‘frozen’ from consideration and the employer will be given 7 business days to correct the mistake or discrepancy.
“BENEFITS” AND “POSITIVES” OF THE NEW REGULATIONS.
The new law establishes the minimum amount for a foreign employees’ salaries equating to 10X the amount of the minimum salary in Ukraine (2017 = 32000 UAH ). This requirement is not used for special categories of employees, such as founders
and/or shareholders of Ukrainian legal entity, graduates from universities that are among world top 100 universities in the world rankings, foreign employees of artistic professions and It-professionals whose salary may be established at any level but now less than minimal salary (3200 UAH). One of the amendments of the payment for the issue of a work permit will be increased. In the case of issuing a 3 year permit, 6X the amount of subsistence minimum for abled persons (2017 = 9600 UAH). The same payments will be required for the prolongation of a work permit which is also not a positive change (according to the acting procedure, the extension of a term validity for a work permit is free of charge).
CHANGES IN THE SPHERE OF RESIDENCE.
The new ground for obtaining temporary residence permit will be added to the list – the investors to the Ukrainian economy in the form of making a contribution to the authorized capital of a Ukrainian legal entity will be able to enjoy the right to obtain temporary
residence permit with no need to be employed in a company. The only restriction is the amount of the investment in the company – not less than 100 000 EUR. Generally, the temporary residence permit shall be issued within 10 calendar days (now the term is 15 calendar days) and the administrative fee will be increased – up to the amount of 20X non-taxed citizens` income minimum (both for issue and prolongation, in 2017 the amount = 340 UAH). There is one more added substantial requirement for an employed foreigner: it will be required to prove that your employer has also 3 Ukrainian employees (who started to work at the company not later than in 6 months before prolongation of temporary residence permit) OR that he has paid taxes for the amount not less than 50X the minimum salaries within the last full financial year (2017 = 160 000 UAH) in order to extend the residency permit of the foreign employee. To sum up, the changes in legislation in the sphere of employment and residency of foreigners in Ukraine provide a more clear, transparent and less bureaucratic procedure but with a substantially more expensive price tag. The law will come into effect within 3 months time from the moment of it's signing by the President and official promulgation. It is important to note that during the transition period while the law is not implemented, that it must be clarified in terms of specifics for documents obtained by foreigners prior to the date and effect of the new law.
Tetiana Yashchenko Lawyer at EXPATPRO Law Firm, PHD student at Kyiv Taras Shevchenko National University
Vasyl Cherednichenko Partner at EXPATPRO Law Firm