Changes in work permit procedure
More transparency, but new issues for expats. What has changed in the work permit and residency permit in Ukraine?
On May 23, 2017, the Ukrainian Parliament voted for the Law of Ukraine “On Amendments to Some Legislative Acts of Ukraine on Eliminating Barriers to Attracting Foreign Investments”. The law came into effect on September 27, 2017. Due to the provisions of that legal act, the whole procedure of foreigners’ legalization will be considerably changed. To protect the interests of investors the new rules make the whole procedure of acquiring legal status for foreigners in Ukraine easier, transparent and less bureaucratic. At the same time, more strict limitations will be introduced.
NEW RULES FOR THE EMPLOYMENT OF FOREIGNERS
The first big change is that from the end of September 2017 any Ukrainian employer can hire a foreigner without any explanation of the inability to engage Ukrainians for the same position. At the same time, foreign employees get a salary 10 times higher than Ukrainians.
It is worth noting that the list of documents required for a work permit will be reduced. It will consist of general documents such as translation of passport and photos. The new document to be submitted for a Work Permit will be the employment contract draft. Criminal records check, university degrees and medical documents will no longer be necessary.
The new validity terms of work permits will be as follows: as per law, the work permit could be issued for the term of the employment contract but not more than 3 years (for IT 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 an unlimited number of times.
These changes are positive and will ensure the interests of both employers and employees. It guarantees a more stable position that will reduce the number of employer’s communication and burdensome procedures with state authorities. Changes of documents review term will be strictly limited to 7 business days for the issue of a work permit and 3 business days to review the prolongation of a work permit validity term.
The new mechanism of the work permit issue is one of the most positive changes. If the authorized body finds mistakes in submitted documents, the issuing (or prolongation) of the work permit won’t be immediately refused but ‘on hold’ 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 determines the minimum amount for foreign employees’ salaries equal to 10 minimum salaries in Ukraine (2020 = 47 230 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 the 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 not less than minimal salary (4723 UAH).
One of the changes is that the payment for the issue of a work permit will be increased.
To get a 3- year permit, the employer shall pay 6X amount of subsistence minimum for abled persons (2020 = 12 612 UAH) as the state fee.
The same payments will be required for the prolongation of a work permit.
CHANGES IN THE SPHERE OF RESIDENCE.
The new ground for obtaining a temporary residence permit will be added to the list. The investors to the Ukrainian economy making an input to the authorized capital of a Ukrainian legal entity will have the right to obtain temporary residence permit with no need to be employed in a company. The only restriction is the amount of investment in the company that shall be not less than 100 000 EUR. Commonly, the temporary residence permit shall be issued within 10 calendar days (nowadays the term is 15 calendar days) and the administrative fee will be increased – up to the amount of 20 tax-exempt minimum incomes (the cost of both issuing and prolongation is 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 6 months before prolongation of foreigner’s temporary residence permit). Or the foreigner needs to prove that he has paid taxes for the amount not less than 50 minimum salaries within the last full financial year (2020 = 236 150 UAH) to extend the residency permit of the foreign employee.
To sum up, the legislation changes in the area of foreigners’ employment and residency in Ukraine bring up a more clear, transparent and less bureaucratic procedure but with a substantially more expensive price tag. It is important to note that during the transition period while the law is not implemented, it must be clarified in terms of specifics for documents obtained by foreigners prior to the date and effect of the new law.