How a Foreign Organization Can Establish a Legal Presence in Ukraine for Implementing a Technical Assistance Project

A foreign organization implementing an international technical assistance (ITA) project in Ukraine may operate in various legal forms. The choice depends on the project’s implementation model, donor requirements, funding structure, and the extent of interaction with Ukrainian contractors, subcontractors, and personnel.

The legal presence of an ITA project (or the organization implementing it) in Ukraine may be formalized as one of the following:

• A registered ITA project (without setting up a permanent establishment or branch)
• A representative office of a foreign organization/company
• A branch of a foreign non-governmental organization (NGO)

Implementation without Establishing a Representative Office or Branch

Foreign organizations may carry out an ITA project in Ukraine without establishing up any legal entity or structure. The main requirement is the state registration of the ITA project with the Secretariat of the Cabinet of Ministers of Ukraine under Resolution No. 153. Once registered, the organization is authorized to enter into agreements, finance project-related expenses, and access the tax and customs benefits available to ITA projects.

In this case, the organization is not considered a Ukrainian tax resident, is not subject to registration with the tax authorities, and does not establish a legal entity or branch. All project operations are carried out through contracts with recipients, contractors, or subgrantees. This model is often used for short-term or advisory projects.

Representative Office of a Foreign Organization

If the project involves a long-term presence in Ukraine, hiring local staff, renting office space, making procurements, or regular interaction with Ukrainian authorities, the foreign organization may establish a representative office. While a representative office is not a separate legal entity, it must be registered with the Ministry of Justice of Ukraine. It can open bank accounts, enter into contracts, make payments, and act as a tax agent.

Upon registration, the organization is also recorded with the tax authorities as a non-resident conducting activities in Ukraine. This may raise issues regarding permanent establishment for corporate income tax purposes – making it necessary to assess the tax implications based on the project’s structure.

Branch of a Foreign NGO

If the foreign organization is an NGO or charity, it may register a branch or separate subdivision in Ukraine. A branch operates under internal regulations approved by the parent organization and is entered into the official register as part of the foreign legal entity.

A branch may carry out economic activities in Ukraine, have its own seal, bank accounts, and staff, and is required to submit tax and statistical reports. This form is less commonly used by international NGOs implementing complex long-term technical assistance programs, though it may be appropriate in specific cases.

What to Consider When Choosing a Legal Presence

Each form entails different implications for:

• Tax registration and reporting obligations
• Ability to directly employ staff
• Bank account setup
• Legal status in dealings with government bodies

Donor requirements, funding mechanisms, project duration, and scale should also be considered.

It is important to note that if a representative office or branch is established, the ITA project must still undergo separate registration.

How We Assist

We advise foreign organizations on the appropriate legal framework for establishing their presence in Ukraine for ITA project implementation. We help determine the most suitable model – registered project, representative office, or branch – and provide full support with registration, tax compliance, bank account setup, contract execution, employment matters, and other legal aspects of launching and running the project.

If you plan to implement a technical assistance project in Ukraine, contact us – we will help you establish a transparent, lawful, and effective presence.