Reform objective
To eliminate barriers to the employment of foreign specialists in Ukraine, reduce time and money costs.
Mechanism
Simplified obtaining a residence permit, registration of single taxpayers without a residence permit for foreigners.
Instruments
Law of Ukraine “On Electronic Communications”, Resolution of the Cabinet of Ministers #933, Decree of the President of Ukraine #420/2020 “On Some Measures to Attract Entrepreneurs, Highly Qualified Specialists Who Are Citizens of the Republic of Belarus”.
Proposals
The Ukrainian IT industry is extremely interested in foreign IT specialists. The form of cooperation with private entrepreneurs is the main model of activities within the sector. In 2020, the Government approved immigration quotas, under which highly-skilled specialists may apply for a permanent residence permit. However, it is difficult to use the quota mechanism in practice, as foreigners did not have the opportunity to be a single taxpayer operating as a private entrepreneur when applying for immigration documents. The immigration procedure is a lengthy process: applications for an immigration permit are considered within a year, and then obtaining a relevant certificate takes up to 15 working days.
From now on, foreign IT specialists who decide to immigrate to Ukraine under quotas will be able to legally work as private entrepreneurs and belong to the single taxpayers of group III while waiting for an immigration permit and a permanent residence card.
The solution to the over-regulated employment procedure for foreigners in Ukraine described in the adopted documents is proposed in the following analytical document — a Green Paper of the IT&Telecom sector “Software Development Market Regulation” published in October 2017.
Why is this essential for Ukraine?
The opportunity for foreigners to work in the IT industry as private entrepreneurs under the simplified taxation system is a competitive advantage of Ukraine. Until 2020, the only opportunity for foreigners to work in IT in Ukraine was to be employed legally. To do this, employers had to obtain a permit for the employment of foreigners and stateless persons, and foreign specialists had to obtain a temporary residence permit. And only then a foreign specialist could register as a private entrepreneur under the simplified taxation system while still being registered as a salaried employee.
Since 2020, the immigration mechanism has become available. It allows IT specialists to work as private entrepreneurs without additional restrictions. Additionally, since October 2020, an “extra departure” from Ukraine has been no longer required for foreigners to obtain a temporary residence permit in Ukraine.