In the context of globalization and the development of innovative technologies, business is seeking to simplify and optimize work and related processes. More and more companies are delegating part of their functions to other companies that are competent in a particular industry, and the usual regulated labor relations are undergoing significant changes. Thus, businesses are tending to concentrate on their own profile activities, and increasing their time, labor and financial resources by outsourcing non-core areas of their operations.
Why do some Ukrainian companies employ foreign elements in their corporate structures? In order to answer this question, it has to be emphasized that this is done mainly to meet export requirements and promote their goods and products in new markets. But use of foreign jurisdictions also helps to hide the ultimate beneficiary of the company, thus, concealing the real owner. In addition, a foreign element in the structure of a group of companies is often used for reinvestment, as well as to increase the investment attractiveness of a business group to a foreign investor.
Ukraine has joined the unified international tax rules (BEPS Action Plan), committing itself to implementing the minimum standard (4 p. out of 15). Given that the country is joining the BEPS plan, including signing on to, within its implementation of the MLI agreement, the work of the system of automatic exchange of tax information, soon the need for an offshore element will simply disappear: taxes will have to be paid, concealing the beneficiary and real incomes will be meaningless and impossible.
All the same, having an international corporate structure is a well-tried, optimal, universal and profitable tool for protecting a business from third parties. The best example is neighboring Poland, which is attractive country for involving as a foreign element due to its open beneficiaries, rich financial resources and favorable investment conditions. Thus, Poland has become the most successful beneficiary of EU funding in 2014-2020, having received over EUR 111 billion in investments in innovation, job creation, scientific research, agriculture, green energy, and so on.
Thus, Poland can be a good alternative to an offshore jurisdiction. Businesses, primarily exporters, having registered a company in Poland, receive:
– the opportunity to be closer to their customers;
– the opportunity to diversify the risks that exist in Ukraine, namely, foreign exchange, inflation and a number of other risks;
– the access to cheap leasing programs, the financial resources of Poland and the EU – the refinancing rate of the National Bank of Poland is 1.5%;
– the opportunity to have a transparent foreign company in the corporate structure of the business for asset protection in Ukraine;
– and the ability to significantly reduce the cost of maintaining and administering a foreign company.
Similar trends and business needs in corporate structuring led to the initiative of the Association of Ukrainian Business in Poland to create the “Ukrainian Business Hub” Business Center in Warsaw, which was implemented by the EUCON Legal Group. Under this project, various companies in one large building provide a wide range of outsourcing services in various fields. The clients of the center for business services are Polish companies, the final beneficiaries of which are Ukrainian residents.
The business hub mechanism provides clients with the opportunity to obtain all of the services they require in one place. Clients receive a legal address and can register their company at this address. In addition, the EUCON Legal Group, which provides legal services within the UBH, has more than 10 years of experience in the Polish market. The company’s specialists provide a full range of legal services, particularly, legal assistance in the corporate restructuring of a business. In addition, the EUCON Legal Group provides accounting services and tax advisers.
The company has also successfully implemented the idea of introducing electronic services: first of all, a personal client office is created for clients, where all documents generated by the client and company are stored – both parties have permanent access to this office, and there is also a separate module which gives access to certain accounting documentation, so the client can independently issue invoices in the program.
Some offices are rented by companies that provide recruitment and logistics services, as well as services in customs brokerage and brokering the rent and purchase of real estate, helping to quickly pick up qualified staff tailored to the needs and peculiarities of the business, optimizing the business’s workflow, resolving issues related to the presentation of goods vehicles for commercial use to the authority overseeing income and goods deliveries, as well as other customs issues, and picking in the shortest possible time convenient premises.
There is also a co-working space to make the business process convenient and efficient. When arriving in Warsaw, business owners and their employees can use fully equipped workplaces, with internet access, meeting rooms and a small conference room, as well as a social office area at their disposal.
The IX International Forum “Polish Business Day in Ukraine” will take place in Kyiv on Nov. 15. Since 2014, the forum has usually been held twice a year – in Kyiv and Warsaw – bringing together large business players, young entrepreneurs, government and community leaders, and those who have desire to develop business not only in Ukraine but also in Europe. More detailed information on the event can be found at www.euconlaw.com.
Source: KyivPost