On 8 April 2009 by Directive No. 322 the Ukrainian Cabinet of Ministers adopted a new procedure concerning the granting, extension and withdrawal of a work permit for foreign nationals (hereinafter referred to as "Directive No. 322"). It entered into force on 14 May 2009 and involves a number of changes. The present Directive No. 2028 of 1 November 1999 became void on the same day.

Directive No. 322 modifies the procedure concerning the issuance of work permits to foreign nationals and is aimed at protecting the Ukrainian labour market against foreign workers during an economic crisis. It further takes into account obligations assumed by the Ukraine with its accession to the World Trade Organisation.

Who is concerned by the New Rules?

The new issuing procedure relates, inter alia, to those foreign nationals who are sent to Ukraine by their foreign employers on the basis of external trade contracts with Ukrainian entrepreneurs for the execution of works or the rendering of services for a limited period of time.

Furthermore, the persons covered by the purview of Directive No. 322 also include so-called "intra-corporate transferees" and persons rendering the services without a so-called commercial presence in Ukraine (cf. in this respect Supplement to the Protocol concerning the Accession of Ukraine to the World Trade Organisation of 5 February 2008).

Intra-corporate transferees are persons who are in the employment of a legal entity established on the territory of a WTO-member state and are sent to the commercial presence (subsidiary, branch) of this legal entity in Ukraine on the basis of a secondment agreement. The intra-corporate transferees include executives, managers and specialists.

Modifications regarding the Documents to be Submitted

Compared with the former procedure further documents have to be submitted when applying for a work permit, i.e. primarily:

  1. Certificate of the Ukrainian Employment Centre that the contributions to the unemployment insurance are properly paid for all employees;
  2. Certificate of the appropriate authority of the native country to the effect that the foreign national neither serves a sentence nor that any investigation is pending against him, or certificate of the Ministry of the Interior of Ukraine concerning prior convictions of a foreign national who – at the date of the application – is already staying in Ukraine or in case of the extension of the work permit.

Furthermore, for foreign nationals who are sent to Ukraine by their foreign employers on the basis of external trade contracts with Ukrainian companies for the performance of work or the rendering of services for a limited period of time a copy of the relevant external trade contract, for intra-corporate transferees the resolution of the foreign employer concerning the secondment of the foreign national in Ukraine and a copy of the secondment contract of the foreign national with his foreign employer is demanded; for persons who are rendering services without a commercial presence in the Ukraine, in addition, a copy of the contract concerning the direct rendering of services in Ukraine is required.

It has to be noted that for the application of a work permit for the categories of employees mentioned above – compared with other foreign employees – neither the filing of a draft employment contract nor the specification of reasons of the expediency of their employment will be required.

Please note that all documents issued abroad must be duly legalised or apostilized and then translated into Ukrainian.

Modifications regarding the Term of the Work Permit and the Fees

As in the past, the work permit will be granted for a period of up to one year and may be extended; for intra-corporate transferees as well as persons who are rendering services without commercial presence in Ukraine the work permit will be granted for a maximum period of three years and may then be extended by another two years. In the issuing procedure applicable hitherto it was stipulated that work permits have to be issued for these employee categories for the entire duration of employment in Ukraine. However, this provision was never put into practice, and work permits, as a rule, were granted only for one year and extended after expiry.

It has to be pointed out that the determination of the duration for which the work permit is granted is in the discretion of the Ukrainian Employment Centre.

The handling fee has been increased significantly and now amounts for each foreign national four statutory minimum salaries. Thus, the handling fee will amount to UAH 2,520.– (approx. EUR 252.–) as of today.

New Reasons for Denial

Also with regard to the reasons for denial Directive No. 322 incurs changes. It has to be pointed out, in particular, that the granting (extension) of a work permit may be denied, inter alia, if – as a consequence of changes on the national or local labour market – the necessity of the employment of foreign labour is no longer given. With that the Ukrainian Employment Centre, in practice, is provided with a large scope of discretion. It is uncertain how this reason for denial will be applied to intra-corporate transferees and persons who are rendering services without commercial presence in Ukraine, since the necessity of their employment must not be reasoned.

Increase of Penalty

Furthermore, it has to be noted that through the changes of the Employment Law the penalty payable by the employer for the employment of a foreign national without valid work permit has been increased with effect as of 13 January 2009. The penalty now amounts to 20 statutory minimum salaries (at present UAH 12,600, i.e. approx. EUR 1,260.–) for each foreign national employed without work permit.

Result: Directive No. 322 increases, in part, the requirements concerning the granting of a work permit, since – compared with the previous directive – further documents have to be submitted (cf. above). However, it also involves positive changes. Thus, the expediency of the employment of some employee categories must no longer be reasoned.

Finally, it has to be pointed out that it is not yet clear how the new rules, above all, with regard to intra-corporate transferees will be applied in the practice.

Reference: Please note that due to the changes of the Law "concerning the Legal Status of Foreign Nationals and Stateless Persons" biometrical data will have to be given for the granting of visa as of 10 January 2010. We will keep you informed about the questions arising in connection with the entry to and the stay of foreign nationals in Ukraine.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.