Foreign individuals and legal entities can be the founders of charitable foundations in Ukraine, although in this case the incorporation will have a number of peculiarities.
In addition, some procedures have changed due to martial law in Ukraine – we will also talk about this further on.
What kind of documents should be prepared for the registration of CF by foreign CSOs
Important! Remember that documents issued in accordance with the legislation of a foreign state must be legalized (consular legalization or affixing an apostille) in accordance with the procedure established by law, unless otherwise stipulated in international treaties. While documents issued in a foreign language must be translated with a certificate of the Ukrainian translation correctness or with the translator’s signature in accordance with the procedure established by the legislation!
In addition, it is necessary to comply with other requirements for the preparation of documents established by Article 15 of the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and Public Organizations”.
- Articles of association of a charitable foundation
A charitable foundation’s founding document is the articles of association approved by the founders or their authorized representatives.
Articles of association of a charitable foundation must contain:
- Name of the charitable foundation
- Goals and areas of charitable activity;
- Information about the management bodies of the charitable foundation, their composition, competence, procedure of activity and decision-making;
- The procedure for appointing, electing or approving members of the charitable foundation’s management bodies, except for the highest management body of the charitable foundation, their replacement, suspension and termination of their powers (revocation);
- The procedure for amending the constituent documents of the charitable foundation;
- Sources of assets (income), control and reporting procedure of the charitable foundation;
- Grounds and procedure for terminating the charitable foundation, in particular, the procedure for distributing assets;
- Terms and procedure of admission of members to the charitable foundation, the rights and obligations of participants, as well as the terms and procedure of their removal from the charitable foundation.
The charitable foundation’s articles of association may determine specifics of activity and termination of such an organization, which should not contradict the Ukrainian laws.
Moreover, since a charitable foundation should be entered into the Register of Non-Profit Organizations and Institutions, the articles of association should contain provisions prohibiting the distribution of income (profits) or part thereof among the founders, members of such organization, employees (except for expenses stipulated by the Ukrainian labor legislation), members of management bodies and other persons related to them. As well as provisions that in the event of termination of a legal entity (as a result of its liquidation, merger, spin-off, acquisition or transformation) assets will be transferred to one or more non-profit organizations of the relevant type, i.e. another charitable organization – or credited to the income of the state budget.
Also remember that charitable foundations have their own, defined by the Law of Ukraine “On Charitable Activities and Charitable Organizations”, management specifics. These rules are set out in Section IV of the above-mentioned law and they need to be taken into account when drafting articles of association.
Important! As early as at the stage of drafting a charitable foundation’s articles of association, the founder needs to think over who will be its head: a citizen of Ukraine or a foreigner. Since in most cases a foreigner needs a permit for employment in Ukraine, the best option is to provide for the position of manager in the articles of association of your foundation.in accordance with the profession classifier. For example, Director of the Foundation. We will talk about this in more detail below.
A copy of the articles of association to be submitted for registration must be bound, numbered and signed by the founders (participants) or their authorized persons.
Important! The articles of association of the charitable foundation must be drawn up in the Ukrainian language and additionally, if desired, in other languages. For registration, it is mandatory to submit the articles of association in Ukrainian, and its foreign language versions can be submitted at will.
- Decision of the founder (authorized body of a foreign CSO) on:
- Establishment and state registration of the charitable organization;
- Approval of the founding document of the charitable organization (AoA);
- Election of the governing bodies of the charitable organization (in accordance with the AoA);
- Determination of a person having the right to represent the charitable organization to carry out registration actions (with the person’s recorded consent to entrust him/her with such duties).
The decision can be drawn up in the form of minutes and must necessarily contain:
- Date and place of the decision;
- Founder’s details;
- Decisions adopted by the founder;
- Signature of the head of the founder, with a seal affixed.
This document must also be bound and numbered, signed by the founders (members) or authorized persons. It should be submitted for registration necessarily written in Ukrainian and, optionally, in other languages.
- Extract, excerpt or other document from a commercial, bank, court register, etc., which confirms the registration of the founding legal entity in the country of its location. This document must also be translated into Ukrainian and legalized (consular legalization or affixed apostille) in accordance with the procedure established by law.
- Application for state registration of a charitable foundation.
This application must be drawn up exclusively in the Ukrainian language. A sample application for state registration of a charitable foundation is available on the website of the Ministry of Justice (application for registration of a legal entity, form 2).
Important! To be included in the Register of non-profit institutions and organizations and to obtain the status of a non-profit organization, it is obligatory to fill out the 8th page of the application form. The state registrar will forward this application to the State Tax Service of Ukraine, which must consider it and make a decision on entering the CF into the Register of Non-Profit Institutions and Organizations. However, given the specifics of martial law conditions, it may also be necessary to fill out Form 1-RN at the State Tax Service.
- Document on the ownership structure of the charitable foundation.
This document may be prepared in Ukrainian and, optionally, in a foreign language. For information on how to correctly submit the ownership structure, see the website of the Ministry of Finance of Ukraine.
Submission and registration of documents
The CSO must appoint a person authorized to carry out registration actions. Such person may be a citizen of Ukraine or a foreigner.
Important! To submit documents, it is necessary to have a Registration Number of the Taxpayer Registration Card (RNTRC) in the name of the person who will submit the documents, even if this person is a foreigner. RNTRC can be obtained within 5 business days at the territorial body of the State Tax Service of Ukraine at the place of receipt of income (in fact, at the place where the foundation will be registered). See detailed instructions on how to do this here.
State registration of charitable foundations is carried out at the location of such organization by local administrative service centers and notaries.
See the website of the Ministry of Justice for an up-to-date list of entities that carry out state registration under martial law.
You can submit documents for the state registration of a charitable foundation:
- through an authorized representative: you need to submit a copy of the original or a notarized copy of the document certifying their powers. This can be either a power of attorney or a copy of the relevant order of the CSO head. If the document is issued in a foreign language and/or under foreign legislation, it must be translated and/or legalized accordingly in accordance with the procedure established by law);
- by mail (the authenticity of the applicant’s signature must be notarized);
- by electronic means of communication, if such possibility is envisaged (a qualified electronic signature is required).
Important! In order to submit registration documents in paper form, the person acting as an applicant or representative must, among other things, present: passport of a citizen of Ukraine or a document confirming the identity of a foreigner (properly translated, translation notarized or legalized) and RNTRC.
In the conditions of martial law and within a month from the moment of its termination or cancellation, state registration has certain differences. Here are some of them that can apply when registering a CF:
- Not all state registrars and notaries can perform state registration of legal entities under martial law, so it is better to check whether the entity you are about to file documents with can perform such registration.
- If the Ministry of Justice in the administrative-territorial unit where you are located or are planning to register a charitable foundation has terminated access to state registers, you can register anywhere, regardless of the location of your foundation.
- There will be no administrative fee for registering your foundation if the purpose of your foundation is to provide assistance to:
- Armed Forces, other military formations, law enforcement (special) agencies;
- Civil defense agencies;
- Volunteer formations of territorial communities;
- Other persons ensuring national security and defense, repulsion and deterrence of armed aggression of a foreign state;
- Persons who have suffered or may suffer from such armed aggression.
- State registration can be carried out on the basis of documents sent by e-mail, if they are created and certified in accordance with the law.
After submitting the documents for registration, the state registrar must issue a description of the submitted documents, on which the access code to the case consideration results is indicated.
It will also be necessary to provide an extract from the Register of Non-Profit Institutions and Organizations to confirm to the counterparties of your CF. To receive this extract, once your CF is listed on the Register of Non-Profit Institutions, you must apply to the State Tax Service with a corresponding application. For more information on how to get an extract, follow the link.
Also remember that in the event of a change in the organizational and legal form of a non-profit organization, amendments to its constituent documents, a registration application in form 1-RN marked “amendments” is submitted to the supervisory authority, with the copies of the amended constituent documents (sealed and certified by the director of the foundation) attached. The application and copies of documents must be submitted within 10 calendar days from the date of state registration of such amendments, and in the event that state registration of amendments is not carried out, within 10 calendar days from the date of such circumstances. Failure to submit such data is punishable – imposition of a fine on the non-profit organization.
Who can be the head of CF?
Both citizens of Ukraine and foreigners can be the head of a charitable foundation.
What foreigners may become the heads of the Foundation without obtaining a work permit? The list of such categories of foreigners is quite short and is defined by Part 6 of Article 42 of the Law of Ukraine “On Employment”. Among them there are foreigners permanently residing in Ukraine or those who received an immigration permit.
However the Ukrainian legislation requires obtaining a work permit for the majority of foreigners and meeting a number of requirements, stipulated by Section VII of the Law of Ukraine “On Employment”. Such permit shall be issued with a clear indication of the position to be held by the foreigner, it must be stipulated by the Professions Classifier. If the name of such a position is not specified in the Classifier, then it will be impossible to get a permit to employ a foreigner as the head of your charitable foundation, and you will have to change the AoA.
As mentioned above, this issue should be resolved when drafting the AoA of your foundation and it should be stipulated that the position of the head of the foundation will be defined, for example, as “Director of the Foundation”.
To obtain such a permit, you must first register your CF, and then submit a package of documents, which, in particular, contains a copy of the draft employment contract with the prospective foreign director, certified by the employer (that is, a charitable foundation represented by the director). Based on this, in order to appoint a foreigner as the director of the foundation, which requires a permit, the draft employment contract must be certified by the head of the foundation, who will not need to obtain such a permit.
Useful resources and links
Forms of applications in the field of state registration of legal entities, individual entrepreneurs and public organizations. https://minjust.gov.ua/m/formi-zayav-u-sferi-derjavnoi-reestratsii-yuridichnih-osib-fizichnih-osib-pidpriemtsiv-ta-gromadskih-formuvan
Legislation
On Charity and Charitable Organizations No. 5073-VI dated July 05, 2012