Expand your organization into Ukraine - without an entity
The Eastern European country of Ukraine has been through a difficult through decades, navigating the collapse of the Soviet Union and several subsequent recessions. However, the country’s economy has sprung back and has recently been on a sharp upward trend, with heavy industries such as mining and steel production leading the way. The country is now full of opportunities for the right ventures, and many foreign organizations are looking to grow their interests in the country.
If your organization is contemplating an expansion into Ukraine, it is important to understand you may encounter delays. The country has a unique set of business and employment regulations, its own language, and distinct administrative procedures.
At Horizons, we help businesses from all industries to expand abroad, including into Ukraine. Our professional employer organization (PEO), employer of record, and payroll services can provide your organization with everything you need to kickstart your Ukrainian expansion in a matter of days, not months, even if you don’t have an established entity in the country.
As the only global PEO with an in-house recruitment team, we can also take care of the sourcing, hiring, and onboarding of your Ukrainian workforce, along with any ongoing HR and compliance admin. Our bespoke services can save you thousands in expansion costs and provide you with a faster route into Ukraine.
How our Ukraine PEO simplifies your expansion
Horizons enables your business to expand its operations into Ukraine, without needing to set up a legal subsidiary.
Hiring in Ukraine: Employment law overview
📝 Employment contracts in Ukraine
It is not strictly a legal requirement, but we always recommend that you provide your employees in Ukraine with a formal contract of employment, with all necessary details of the employment agreement such as wage/salary, maternity leave allowance, sick leave, expected working hours, and so on. It should also be written in Ukrainian and use the Ukrainian hryvnia currency.
⏰ Working hours in Ukraine
A normal working week in Ukraine is 40 hours, and eight hours per day. Any hours worked beyond this should be compensated at 200% of normal pay, and workers should not work more than two hours of overtime per day, or 120 hours per year.
📅 Public holidays in Ukraine
New Year’s Day
Orthodox Christmas Day
Orthodox New Year
Ukrainian Unity Day
International Women’s Day
International Women’s Day observed
Daylight Saving Time starts
Orthodox Easter Day
Orthodox Easter Day holiday
Victory Day / Memorial Day
Victory Day / Memorial Day observed
Orthodox Pentecost holiday
28 Jun-29 Jun
Baptism of Kyivan Rus
Daylight Saving Time ends
Cultural Workers and Folk Artists Day
Dignity and Freedom Day
St. Nicholas Day
Catholic Christmas Day
🏖 Vacation leave in Ukraine
Workers in Ukraine are legally entitled to a minimum of 24 days of paid leave per year. This allowance is increased by three days for some employees, such as those over the age of 55 or disabled workers. Additionally, all workers can take up to seven days of leave for special circumstances such as a death in the family.
😷 Sick leave in Ukraine
Employees in Ukraine are legally entitled to take sick leave from work with compensation depending on length of service. Workers with under five years of service receive 60% of pay, then 80% for between five and eight years of service, and 100% for more than eight years of service.
👶 Parental leave in Ukraine
Women can take 70 days of paid maternity leave before giving birth. They are then generally entitled to another 56 days of leave after giving birth, and additional leave at a reduced rate of pay for the first three years of the child’s life. Fathers are not legally entitled to any paternity leave, but some employers may choose to offer it.
💰 Terminations and severance in Ukraine
Employers in Ukraine can terminate employees in certain circumstances, such as by mutual agreement, but terminations can be very difficult if there is no ‘proper cause’. In these situations, we strongly advise enlisting the help of a legal professional to simplify the process and potentially avoid large payouts.
Usually, employees are given severance payments equivalent to one month of salary or more.
🏦 Taxation in Ukraine
Employers are legally required to contribute 34.7% of salaries as a Unified Social Tax, which covers various social programs.
Income tax in Ukraine is set at 18%.
The corporate tax rate in Ukraine is 18%.
🏥 Health coverage in Ukraine
There is public healthcare in Ukraine, but the standards can be low relative to more developed countries. For this reason, many employers choose to offer private health insurance to their employees.
💳 Ukraine compensations & benefits
Compensation laws in Ukraine
As of September 2020, the minimum wage in Ukraine is 5,000 UAH per month.
Benefit management in Ukraine
Managing your benefits packages as an employer in Ukraine may include setting up things like private health insurance, supplementary parental leave payments, a company car, and so on.
Setting up and running a benefits system for your Ukrainian employees can be difficult as a foreign company, and you will need to be familiar with the country’s procedures and relevant regulations. The process can take a long time to establish, so we advise getting professional advice if you are unsure.
Horizons can simplify your Ukraine benefits management, with our Ukraine experts setting up and managing everything for you and helping you focus on a successful expansion operation.