How to employ a foreigner in Ukraine in 2020

Employment of foreign nationals in Ukraine is not an easy or quick process. However, if you decide to hire a foreign citizen, no one will forbid you to do so. Read this article to find out how to hire such an employee.

When hiring foreign nationals, employers need to be guided by the Law on Employment. It provides for two options: with or without a work permit.

Who can be hired without obtaining a permit?

Article 42(6) of the Law on Employment provides a list of persons who do not need to obtain a work permit:

• foreigners who have a residence permit;
• refugees;
• foreigners granted temporary protection in Ukraine, and others.

Such citizens are subject to the same rules and procedures for hiring as Ukrainian citizens.

In order to employ other foreign nationals, the employer must first obtain a work permit and only then employ such a person.

Who has to obtain a work permit?

If you decide to hire a foreign national, you (the employer) will have to obtain a work permit from the Employment Center.

The form of ownership of the company does not matter; both legal entities and individual entrepreneurs can be hired.

When applying for a work permit for a foreign citizen, you specify a specific position. That is, if you have a foreigner who will combine two positions, then you will need to submit two applications and specify the name of the position in each of them. If a foreigner will work in the same position in two different companies, then each of the employers will have to obtain a work permit for the foreigner indicating a specific position.

If a foreigner will combine several positions in your company and at the same time receive a salary of at least 50 minimum wages, then you can obtain only one work permit.

Depending on the position you are applying for, the procedure for obtaining a permit may differ.

Are there any salary requirements?

If you decide to hire a foreigner, you should be aware that you can obtain a work permit only if you pay the foreigner a salary of at least 10 minimum wages (at least UAH 50,000 in 2020).

However, if you hire foreigners who do not need to obtain a work permit, they are not subject to the minimum wage requirement. Such citizens are subject to the same labor guarantees as Ukrainian citizens.

Foreign nationals may work part-time and, accordingly, receive a salary in proportion to the time worked.

How to get a work permit for a foreigner?

To obtain a permit, you need to submit a package of documents to the Employment Center:

• approved draft of the employment agreement (contract);
• an application for a permit;
• a copy of the foreigner's passport and a notarized translation into Ukrainian;
• color photo of the foreigner 3.5 * 4.5 cm.

A work permit is issued for the duration of the contract, but not more than 1 year (in some cases up to 3 years). You can extend the permit an unlimited number of times in the future.

After submitting the documents, the Employment Center reviews the application within 7 days and, if everything is in order, sends a decision and details for the permit fee.

After receiving a letter from the Employment Center, you need to pay within 10 business days from the date of receipt of the decision.

The cost of a work permit depends on the period for which it is issued:

• from 1 year to 3 years - 6 subsistence minimums for able-bodied persons (hereinafter referred to as the "SMP");
• from 6 months to 1 year - 4 PMPOs;
• up to 6 months - 2 PMPOs.

The amount of the minimum wage is set by law as of January 1 of the calendar year. In 2020, the amount of the minimum wage is UAH 2102.

If the employer fails to pay within 10 days for obtaining or extending the permit, the decision of the Employment Center is canceled.

If you have decided that obtaining a permit is a long and pointless process, and it is easier to hire a foreigner and be done with it, we hasten to disappoint you. The penalty for hiring a foreigner without a permit is 20 minimum wages (in 2020, UAH 100,000).

What to do next after obtaining a work permit for a foreigner?

After you have obtained a work permit, you have 90 calendar days to conclude a contract. After the contract is signed, you need to submit a certified copy (with the company's seal and the signature of the manager) to the Employment Center within 10 calendar days.

Don't forget to notify the tax authorities of the employment of a foreigner. To do this, you need to submit a notification on the employment of an employee (the procedure is the same as for hiring a Ukrainian citizen). The notification is submitted after the hiring order is issued, but before the employee starts work.

If a foreigner does not have an employment record book, you need to get one within 5 days.

How can a foreigner get a registration number?

Foreign nationals working in Ukraine need to obtain a taxpayer registration card. To do this, you need to submit a package of documents to the territorial tax authorities:

• an account card in the form of 1-DR;
• passport;
• a notarized translation of the passport into Ukrainian;
• a copy of the translation.

After submitting the documents, the tax office will issue a taxpayer card with a registration number within three days.

In what currency should I pay a salary to a foreigner?

Regardless of which country an employee is a citizen of, he or she can only receive a salary in hryvnia. Foreign employees do not have any privileges.

But you can link salaries to the exchange rate, but pay them only in hryvnia.

What taxes are imposed on the salary of a foreign employee?

The salary of a foreign employee is subject to the standard personal income tax rate of 18% and the military contribution rate of 1.5%. In the 1-DF report, such income is shown with the sign "101".

However, it is prohibited to apply the tax social benefit to the salaries of foreign employees.

As for the unified social contribution, there are no exceptions here either, we apply 22% to the accrual base and do not forget about the minimum and maximum accrual base for the unified social contribution. In Appendix 4, the amounts of salary and unified social contribution are reflected in the same way as for other employees. But do not forget to indicate in column 6 that this employee is a foreigner.