Getting a Permit for Permanent Residence in Ukraine by a Foreigner Based on Investment

According to the laws of Ukraine a permit for permanent residence (permanent residence) in Ukraine is issued to foreigners only based on an immigration permit. The Law of Ukraine “On Immigration” contains an exhaustive list of grounds that are entitled to ask for such permission, with most of them relating to relationships with citizens of Ukraine or the issue of territorial origin. Another reason to get an immigration permit concerns scientists and artists of the world level. Thus, the most plausible reason of getting an immigration permit is making investments to the Ukraine economy by a foreigner, that is a convertible currency in the amount not less than one hundred (100) thousand USD registered in the proper order. In this article, we will consider not only investment but also the ways to use it.

Foreign investments is efficient through the creation of a foreign company or own participation in the authorized capital of already established Ukrainian enterprises and an investment must meet the following mandatory criteria:
- introducing of foreign convertible currency (currency of first group of the Classifier of the National Bank of Ukraine, including the USD, Euro, Swiss franc, pound sterling, Australian, Canadian, Hong Kong, Singapore Dollar, Korean Won, Chinese Yuan, Danish, Norwegian, Czech crown, zloty, yen, precious metals);
- to be equivalent to the amount of not less than one hundred thousand dollars;
- to be registered in accordance with law (now the procedure is simplified, it requires only special certificate of a bank about crediting an account);
- to be an investment to Ukraine’s economy, that is to be used for the purpose of economic activity for profit or achieving other social effect;
- the funds must have a legal origin.

Because of the paragraph 4 (about indicia it is necessary to create a foreign company in Ukraine, because property purchasing has no indicia of investment, because it is a priori considered that a foreigner directly buy a house for residential purposes and not for investment. Therefore, most foreigners who wish to immigrate to Ukraine are often wrong thinking that the acquisition of housing in Ukraine provides the right to obtain an immigration permit. The best option for making foreign investment is the creation of a foreign company in Ukraine of any specialization or area of work introducing a sum of 100 thousand USD in foreign currency to an account of established company as a contribution to the share capital of that company from a personal account of foreigner.

After introducing that amount to the account of a company, a foreigner can choose several ways to use it:
1. to make a purchase of one or more items of immovable property (both residential and commercial) which they can rent out or live in it (but a person should arrange the transfer of apartments “for himself” in rent out to avoid further questions from the fiscal services ). This path is also interesting because it helps protect money from devaluation, because currency transferred in Ukraine should be sold for Ukrainian hryvnia and operational real estate purchase will not let hryvnia to devalue. A foreigner should understand that the purchaser of such real estate is his company, not personally him, but some legislative rules eventually allow to re-register property as their own, that will be considered below.
2. to select one of the promising sectors of the economy (eg IT sector) or a business that most foreigners like (trade, services, etc.) and developing a business that use the investment for himself.
3. to purchase any commodity in Ukraine and sell the product abroad, and so on.

As to the paragraph 1, the most interesting, in our opinion, is investing in housing under construction, and not to a finished property. Thus, recently, purchase of house under construction is 25-30% cheaper than already finished house. The period of commissioning of such housing is about 9-12 months, thus an economic profitability of such investments is high. However, a foreigner should consult about such purchases with lawyers, because buying housing under construction requires more careful study of documents and builder permits.

It should be noted that the procedure for obtaining a permanent residence permit may take up to one year (although, usually, our company receives documents for our clients during 3-4 months), in most cases, it is appropriate for a foreigner to get a temporary residence permit, firstly, to be able to stay in Ukraine legally. In this case, the aforementioned company, founded by a foreigner, through which he can get a work permit and, consequently, a temporary residence permit, can be used.

Also, a foreigner, especially the one who buys a real estate as an investment, eventually is able to eliminate his own Ukrainian company and transfer an assets of a company and property on his name. This procedure should not start before obtaining a permanent residence, in other words, all procedures related to immigration, for obvious reasons. An elimination of a company is usually about 3-4 months. There are certain aspects regarding the taxation of companies during their liquidation, norms on asset stripping, therefore, it is reasonable to involve professional Ukrainian lawyers for such a procedure.

We hope that this article will help foreigners in decision-making on immigration to Ukraine. Clearly, this article cannot disclose the entire content and specificity of Immigration to Ukraine for the foreigners based on investments; therefore, we are ready to provide legal assistance to all interested parties.

Author: Kydalov Igor

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