Do foreign investors need a work permit to do business in Ukraine?

Foreign investors seeking to do business in Ukraine play an essential role in developing the economy, contributing to job creation, modernizing production, and attracting foreign capital. However, foreigners who wish to invest and manage a business must be aware of the legal requirements, including those related to employment. Do foreign investors in Ukraine need an employment permit? Let's take a closer look at this question.

Who is considered a foreign investor?
A foreign investor is an individual or legal entity with citizenship or originating from another country that invests its funds in the Ukrainian economy. Such investments can be made by establishing new businesses, acquiring assets, or buying stakes in Ukrainian companies. It is essential to understand that investing as a financial activity is not equated with employment. However, if an investor plans to work in a company they have established, they must obtain a work permit.

Do foreign investors need a work permit?

Ukrainian legislation regulates the employment of foreigners, including investors. Under the Law of Ukraine ‘On Employment of the Population,’ foreigners wishing to work in Ukraine, regardless of whether they are founders or managers of a company, are required to obtain a work permit. The law provides no unique benefits or exemptions for investors, even if they hold senior positions.
Therefore, investors must obtain a work permit to manage a company as its director or executive officer. This applies to any labor functions that may be performed in the company.

How long is the permit valid?

Work permits for foreign investors and other foreign employees are issued for up to two years. After this period, the employer may apply for an extension of the permit. This option allows foreigners to work in Ukraine for a long time if their activities comply with the law's requirements.

How do foreign investors obtain a work permit?

Obtaining a work permit is a standard procedure that requires applying to the State Employment Service of Ukraine. The primary responsibility for submitting the documents lies with the employer, i.e., the company where the foreigner will work. If the foreigner is the company's founder, his company must apply for the permit.
To submit the documents, the employer must collect a package of necessary materials, which include:

1. An application from the employer. The document must contain information about the company, the position for which the foreigner is hired, and other terms of employment.
2. A copy of the foreign employee's passport. The foreigner's passport must be translated into Ukrainian and notarized.
3. A photograph of the foreigner. Usually, one color photo of 3.5x4.5 cm in size is submitted.
4. Draft employment contract. A document concluded between the employer and the foreigner after obtaining the permit.

What are the risks of not having a work permit?

Working without a proper work permit is considered a violation of Ukrainian law. If a foreigner, even the company owner, works without a work permit, the company may be fined, and the foreign employee may be deported.
In addition, the absence of a work permit deprives a foreigner of social guarantees and a legal basis for work, which may complicate the company's operations.

Real-life examples

Example 1: A foreign investor founded an information technology company in Ukraine and decided to take the position of CEO. To perform his duties, he is required to obtain a work permit, even though he is the company's founder. The company submits an application to the State Employment Service and obtains a two-year work permit.
Example 2: A foreign citizen establishes a construction company and becomes an operational director. Since this activity requires performing labor functions, the investor must also obtain a work permit.

Interesting facts about the employment of foreigners in Ukraine

1. Validity of the permit. The standard term of a work permit for foreign nationals, including investors, is up to two years. This period may be extended if necessary.
2. Investor as owner and employee. A foreign investor may own a company without performing any labor functions, in which case they do not need a work permit. However, if the investor performs any duties in the company, they need to legalize their work.
3. The role of a temporary residence permit. Foreign investors wishing to stay in Ukraine for an extended period must obtain a temporary residence permit, which is issued based on a work permit. 

Conclusion.

Foreign investors wishing to finance a business and perform managerial or other labor functions must obtain a work permit in Ukraine. This applies even to company founders or owners. The procedure for obtaining a work permit is standard and requires submission of the necessary documents to the State Employment Service.
Compliance with these requirements ensures the legality of foreigners' work and prevents possible legal problems. Foreign investors should be aware of these requirements to develop their business successfully in Ukraine.