| |
LAWS AFFECTING FORREIGNERS
|
| |
|
|
|
|
|
|
| |
LAWS AFFECTING FOREIGNERS
|
|
| |
|
|
|
|
|
|
| |
Overview.
It is advisable for any foreigner coming Overview. It is always advisable
for any foreigner coming to a new country to familiarize himself with
the laws of a particular country. In most countries this is easy to
do as most book stores carry books in several languages concerning
the various laws and how they apply to foreigners. Also the laws are
relatively stable and do not change radically from week to week as
they do in Ukraine. In this section of "Ukraine-Today" we will attempt
to give you a very general picture of laws that may affect you. We
strongly urge you to consult with your own attorney concerning any
of these and other laws that you may be concerned about. Since laws
in Ukraine are often contradictory and since the various branches
of government often issue laws, decrees, opinions, clarifications,
etc that may, in effect, work in total oposition with existing laws,
you may find that this will cause you to get 4 different opinions
even when consulting only 3 lawyers. Sometimes a good litigation attorney
may not be so knowledgeable about all the possible laws and how to
utilize them. Finding good legal advice in Ukraine is not only a necessity
but can also be considered an "art". |
|
Some
Unusual Laws.
Equipment purchases Unlike in the USA
or other Western countries, Ukraine does not permit the purchase of
computers, copiers, cars, office furniture, and the like from gross
corporate income. It permits such purchases only from "after tax"
income. In effect, equipment needed for the running of your business
is not considered an expense. This grossly limits capital investment
in Ukraine and has a detrimental effect on corporate growth.
Repatriation of Investments
or profits. The process of repatriation of investments or profits
is long, tedious and frustrating. The number of permits and approvals
required is truly staggering. Not only do you have to get approval
from your bank, the tax authorities, the National Bank, but now also
the SBU (Ukrainian Security Services - the present day KBG). If you
do finally obtain such approvals, these have to be renewed every three
months. |
|
| |
|
| |
|
| |
|
|
|
|
|
|
| |
Payments
for Overseas Goods or Services. Unlike in the West where you
simply go to the bank, transfer your funds or open a Letter of Credit,
in Ukraine you have to go through a long and tedious process in order
to order anything from abroad. Most Western companies don't even want
to deal with Ukrainian business people because of this long process.
What Western business person you know wants to wait 3 months for your
company to obtain all the necessary permits to purchase their goods.
Companies that work with Western companies on a regular basis know
all the ins and outs of such procedures, but companies that are just
starting out must go through a long period of training and consultations
before they can accomplish the same tasks
Personal Income.
Perhaps you know that if you are living or working in Ukraine for
a period longer than 182 days, you are automatically subject to Ukrainian
income taxation rules. But did you know that at that point, all you
income, wherever it may be in the world is also subject to such Ukrainian
income taxes? . |
|
Exporting
Personal Funds. The amount you may take out of Ukraine as an
individual has now been raised to $6000.00 however only $1000 of this
can be taken out without a document from your bank indicating how
you came into posession of the funds. Thus the remaining $5000.00
can only be taken out with proper documentation. If you came into
Ukraine with $7,000.00 and have a custom declaration to prove it,
you may take out $8,000.00 without any additional documents or $13,000.00
if you have appropriate documents showing where these funds came from.
Driving. You may drive
temporarily with a US driver's license that has been officially translated
and the translation notarized, but after a certain period (this is
normally 30 days but has changed several times) you will be required
to obtain a Ukrainian or Ukrainian Endorsed International Driver's
License. |
|
| |
|
|
|
|
| |
Currency Transgressions
6. "The On 11-5-99
a new revision of the Presidential Decree "About the Application
of Penalties for the Transgressions involving Currency" went into
effect and which has some unpleasant results for business persons.
1) Art. 1 penalties for the transgressions involving currencies
is applicable not only to the corporations involved, but also to
their permanent representatives through whom there is activity in
Ukraine. 2) The extent of the penalties concerning the established
levels of remaining currencies will now be calculated on the basis
of the number of days that such excess remains. 3) New financial
sanctions are also added, however in accordance with the Tax Laws
concerning the Tax Authority, penalties can only be assessed in
accordance with Para. 7, Art 11 of this Law and other laws of Ukraine.
Therefore if the Tax Authority prepares to assess penalties against
a corporate entity that are foreseen by this Decree, then courts
may reverse this action and may find the action void.
Foreign Technical Assistance
5. In June 1999 a Presidential Decree went
into effect called "About International Technical Assistance" dated
1 Jan 99, which regulates (on the basis of existing laws and international
trade agreements). This regulates relationships that come into effect
as a result of investments and their utilization from International
technical assistance. International Technical Assistance (ITA or
MTD in Ukrainian) - are resources which, in accordance with international
treaties, are provided by donors on a free-of-charge basis to Ukraine
for the purpose of realizing programs such as Projects of International
Technical Assistance for the Introduction of Reforms and Programs
for Social-Economic development of Ukraine. Such Assistance can
be provided in the form of: - funds listed in the programs of ITA-MTD
- intellectual property rights, including: patents, copyrights,
commercial samples, know-how, etc - financial resources in the form
of foreing and domestic currencies. - Other resources that are not
expressly forbidden by Ukrainian law. Such ITA-MTD rights can be
given in the form of: - transfer of ownership or ownership rights.
- Consultation with the assistance of experts even from otheer countries.
- Financing of expenses for education and special qualification
programs. - Exchanging of specialists - Grants. In accordance with
this decree, the normal customs duties on such items as - sale of
goods on the territory of Ukraine of products under this program
such as goods, raw materials, and equipment, which are done under
the auspices of the ITA-MTD agreements. - Import of any goods and
services unther the ITA-MTD agreements are waived.
|
|
Land
Ownership. 1. In Ukraine, as in most other countries there
exists the right to private ownership of land. However, in Ukraine
citizens of other countries or persons without citizenships, cannot
obtain rights to land ownership. (Item 3 Page 11 of the "Law Concerning
Ownership" dated 1992) Transfers to foreigners of land in Ukraine
for the purpose of private ownership on the basis of a material exchange
of goods, services, funds, etc, (in other words, transfer to a foreigner,
whether it be a physical entity or a corporation, of the same rights
that they would enjoy in their own countries) would be a breach of
the internal laws of Ukraine. Foreigners should have the right to
private ownership of land in any country where such rights are given
to local citizens. This concerns not only this right but also all
rights, which are provided for in this, or any other country.
Unpaid Utility Bills 2.
Not long a go a new law went into effect called "The Law about Obligations
of subject corporate entities that fail to promptly pay for utilized
"communal expenses" and maintenance fees of surrounding properties",
dated 20-05-99. This law foresees that subject corporate entities
that utilize commercial properties, of which they are the rightful
owners, or which they rent on the basis of a lease agreement, must
pay a penalty of 1% daily or 100% maximum of any unpaid obligations.
Additional Customs Duties
3. Effective from 1 July to 31 December 1999 corporations involved
in international trade, for customs declarations on imported goods
that are brought onto the territory of Ukraine, are required to pay
yet another customs duty: 2% of the customs value of the goods. Cabinet
of ministers decree of 19-05-00.
New "Classifictor" 4.
In effect is a government "Classificator -DK 018 -98) "Ukrainian Classification
of products involved in International Trade" This document is intended
for the purpose of regulating cusoms and non-customs tariffs involved
in International trade, also it is used for statistical purposes,
and finally for the purpose of assessing duties. |
|
|
