Unlike LLC, JSC is entitled to issue shares, which are subject to registration with the National Securities and Exchange Commission. Keeping this in mind, the registration of JSC is more time-consuming process and usually takes up to 2-4 months. In the majority of cases, foreign investors prefer to set up a company in form of LLC, rather than JSC. Similarly to JSC, liability of LLC’s shareholders (participants) is limited to their investment in the share capital. In addition, requirements to the incorporation and operation of LLC are more straightforward than those of a JSC.
If at a later stage, LLC intends to raise capital through IPO, or the number of its participants exceeds 100, its reorganization into a public JSC will be required.
The minimum share capital of JSC is set at 1,250 minimum monthly salaries as set by the state.
Shareholders of JSC shall pay their shares in full before the state registration.
• general meeting of shareholders (“GMS”);
• executive body (either board of directors or a sole director); and
• audit commission as a controlling body.
JSC may decide to establish an audit committee or appoint an internal auditor within its corporate structure. Under recent legislative amendments, a supervisory board may establish an audit committee as its internal commission. LLC should also have an audit committee; however, no sanctions are prescribed for LLC for non-compliance with this requirement.
A public JSC should arrange for an annual external audit of its financial statements and ﬁle the audited financial reports with the National Securities and Exchange Commission. Any JSC can be required to arrange for an external audit upon request of the shareholder(s) holding at least 10% of its shares.
Though an external audit is generally not mandatory for LLC, LLC’s shareholders have the right to request performing of the audit of the company by an external audit firm.
In addition, the Law of Ukraine “On Joint Stock Companies” contains a series of generally recognized legal instruments to protect rights of minority shareholders, namely:
In certain instances (e.g., when a company is abusing its monopoly position), the Antimonopoly Committee of Ukraine may require the company to proceed with the split-up procedure.
As a result of reorganization, all rights and liabilities of a company are transferred to its successors. Reorganization requires a number of stages to be followed, e.g., a tax audit to be conducted by the tax authorities, a written notification forwarded to creditors, and repayment of obligations prematurely, clearance with the antimonopoly authorities (in certain cases), etc.
Foreigners who wish to stay in Ukraine for more than 90 days within a 180-day period need toobtain a long-term visa.
Those foreigners who intend to work in Ukraine (either in a Ukrainian company or in a RO of aforeign company) are required to apply for a long-term visa. This type of visa provides formal grounds for obtaining a temporary residence permit in Ukraine, i.e. a document that allows entering and staying in Ukraine without any restrictions during the period of the permit validity (usually 1 year).
Foreign individuals who do not need a visa to enter Ukraine (i.e. who originate from visa exempt countries) or those who enter Ukraine on a short-term visa may stay in the country during up to 90 calendar days (in the aggregate) within a 180-day period starting from the day of the first entry into Ukraine. Otherwise, they should register with the local immigration authorities.
A temporary residence permit is obtained on the basis of the permit to use labor of foreign citizens (a work permit) issued to the employer by the State Employment Centre (or its local divisions). Foreign employees may then be registered at the place of temporary residence in Ukraine and obtain the residence permit valid for the period of permit (usually 1 year).
Currently, citizens of the following states are not required to obtain any visa to enter the territory of Ukraine: member states of the European Union, the USA, Switzerland, Norway, Canada, Japan, Israel, Turkey, Panama, Serbia, San-Marino, etc.
Employment of foreign nationals in Ukraine is generally subject to the Ukrainian labor and immigration laws, unless otherwise provided in the effective international treaties to which Ukraine is a party.
Employees are entitled to an annual leave of at least 24 calendar days (unless a longer term is established by the law).
Women are entitled to paid maternity leave for 70 calendar days prior to and 56 (sometimes 70) calendar days after childbirth. A woman is also entitled to unpaid leave until the child reaches the age of three (in rare cases up to the age of six) with the payment of financial aid as provided by the law for this period. The Ukrainian labor legislation also provides for different employee guarantees, such as:
Salaries should be paid at least twice a month. The gap between installments should not exceed 16 days, and the salary must be paid within 7 calendar days after the end of the period to which it is attributable.
The most common legal grounds for unilateral dismissal of employees are as follows:
The highest penalties (30 minimal salaries for every case of violation) are prescribed for a permit of an employee to work without the formalized employment agreement.
As per the general rule, an employee is not responsible for financial losses of the company and can be ordered to compensate only direct damages incurred to company in the amount not exceeding the average monthly salary of this employee. However, in accordance with the recent changes to the Labor Code, management of the company can be liable for financial performance of the company.
Investment proposal (concept of investment project) is submitted to Lviv Investment Office by Lviv City Council division, legal entity or individual.
Concept includes: project proposal, forecasted volume and type of investment, planed investment in the development of infrastructure, number of new jobs created, data on market analysis, economical efficiency and feasibility, terms of implementation, data on land plot or municipal property (if available).
Lviv Investment Office forms investment object and submits for Lviv City Council approval.
Department of Economic Development together with contractors or potential investors prepares and approves feasibility study, which includes organizational, marketing, production, implementation and financial plans, risk analysis, economic and social forecast, forecast for revenues of budget and state target funds.
Lviv Investment Office or potential investor prepares and submits for Lviv City Council approval an investment project, which includes investment proposal, land documentation (if needed), feasibility study, specifications for utilities connection (if needed), other data depending on project type.
Investment Commission, which consists of City Council deputies and officials, approves date of tender announcement, terms and conditions and tender documentation.
Lviv Investment Office publishes the announcement of investment tender, which includes name and location of investment object, data on investment object, date and time of investment tender, volume of participation fee, requirements to tender participants, volume of works to be financed by the investor, terms and conditions of investment agreement.
Potential investor has 30 days after the announcement to submit a proposal.
Proposal should include application for tender participation, information about participant, payment order for payment of registration fee, financial reports, data on experience and financial and organizational capabilities, investment proposal.
Proposals are disclosed and evaluated by Investment Commission.
Investment Commission approves investment tender winner.
Investment agreement is concluded between the winner of the investment tender and the authorized executive body of the City Council.
Investment agreement is approved by City Council Executive Committee.
City Council decree on approval of land plot allocation documents
Land sale / lease based on best price offer
Agreement approved by City Council