“Legal Consulting Center» Law Firm has a significant experience of cooperation with non-resident companies and their representative offices in Ukraine. In this article, on the example of the well-known POLSKIE GÓRNICTWO NAFTOWE I GAZOWNICTWO S.A. (hereinafter – PGNіG) company, we want to reveal the peculiarities of legal support of non-resident representative offices in Ukraine.
In particular, our business relationship with PGNiG and its representative office in Ukraine began in 2006, when a non-resident representative office was formally registered with the relevant tax inspectorate. It should be noted that this representative office did not carry out independent economic activities in Ukraine, but performed purely representative functions. In particular, the representative office dealt with the supervision of the execution of contracts for the supply of natural gas to the Republic of Poland, issues of expanding business cooperation between PGNiG and NAFTOGAZ UKRAINE NAK, as well as representing PGNiG interests in a joint-stock company jointly established with Ukrainian partners in Ukraine with the goal of developing one of the gas fields in the Kharkiv region.
However, the lack of such a representation of a non-resident in the exercise of direct economic activity in Ukraine did not lead to the absence of tasks in our company regarding the legal support of such representation.
So, why is the legal representative of non-resident representation in Ukraine needed and what issues can be included in the scope of the duties of an external legal adviser?
Firstly, the circle of our duties was to provide legal assistance in matters of employment of non-residents, especially non-resident individuals (including citizens of the Republic of Poland).
Secondly, the issues of legal support of the current functioning of the office of such a representative office (conclusion of an agreement on the lease of premises, contracts for the sale of vehicles, etc.).
Thirdly, the provision of advice related to taxation, in particular, features of tax accounting in the office (including the budget for the maintenance of the office), taxation of wages of employees, maintenance in relations with regulatory authorities and the like.
Fourth, advising the client on the peculiarities of the Ukrainian legislation in the field of natural gas extraction and supply, including export, and, accordingly, the analysis of possible options for expanding cooperation in the field of extraction and export of natural gas from Ukraine.
Fifthly, legal support in issues of corporate law (preparation and submission of proposals to corporate documents: minutes of the general meeting of the company, the Statute, Regulations on the Supervisory Board, the Audit Committee, etc., representing interests at the general meeting, providing advice on current economic activity, settlements, etc.).
And in the end, after many years of work in Ukraine, our Polish partners, in connection with the termination of the contract for the supply of natural gas to the Republic of Poland, decided to close their representative office.
Our company carried out all the necessary procedures related to the liquidation of the PGNiG representative office in Ukraine, in particular, drafted the necessary decisions of the non-resident parent company, reported to the regulatory authorities on the implementation of the liquidation procedure, provided legal assistance in passing inspections in the supervisory authorities during deregistration, accomplished the procedure for dismissing employees of the representative office, sold the property of the representative office on a competitive basis, provided for settlements with personnel, creditors and returned the balance to the parent company, closed bank accounts, prepared liquidation balance and fully completed the procedure for the liquidation of the representative office of non-residents in Ukraine.
So, after 11 years of relationship, our history of cooperation with PGNiG in Ukraine has finished.
Artur Nonko, Ph.D., Managing Partner of “Legal Consulting Center» Law Firm