Date of publication: 6 November 2026
Yevgen Solovyov, Attorney, Partner
Source: Chambers
The full-scale war and large-scale humanitarian aid, recovery, and development programs in Ukraine have significantly increased the interest of international non-governmental organizations (NGOs) in establishing a permanent presence in the country. Foreign organizations planning to implement humanitarian, charitable, educational, human rights, and other public-interest projects face the choice of the optimal legal model for their operations.
Ilyashev & Partners’ team assists clients with market entry projects for international structures in Ukraine and helps select a legal framework that minimizes tax risks and ensures effective management.
Ukrainian legislation offers several mechanisms for structuring such activities, the most common of which are:
- Establishment of a structural (separate) unit of a foreign non-governmental organization in Ukraine.
- Establishment of a charitable organization in the form of a charitable foundation in Ukraine.
- Establishment of a public association with the status of a legal entity (public organization).
Despite their shared non-profit orientation, these models differ significantly in legal nature, the extent of control by the foreign parent organization, registration procedures, tax regime, and governance features. The choice of a specific model primarily depends on whether the international organization intends to operate in Ukraine directly on its own behalf or plans to establish a separate Ukrainian legal entity.
Charitable and Public Organizations in Ukraine: Choosing a Legal Model
- Separate Unit (Branch or Representative Office) of an International NGO in Ukraine
The Law of Ukraine “On Public Associations” provides for the possibility of operations in Ukraine by non-governmental organizations of other states and international NGOs, specifically through branches and representative offices established by them. A branch is a separate structural unit of a legal entity located outside its primary location that performs all or part of its functions. A representative office is a separate structural unit of a legal entity located outside its primary location that represents and protects the interests of the legal entity.
A fundamental feature of this model is that the separate unit does not acquire the status of an independent legal entity. It is endowed with assets by the founding legal entity and operates on the basis of regulations approved by it or on another basis provided for by the legislation of the foreign state under which the foreign NGO was formed. It constitutes an organizational part of the foreign NGO, acts within the powers granted to it, and its activities are legally bound to the foreign organization.
The heads of branches and representative offices are appointed by the legal entity and act based on a power of attorney issued by it or another basis provided for by the legislation of the foreign state under which the legal entity was formed.
This model allows an international NGO to ensure centralized management of Ukrainian programs, directly determine the powers of the unit’s head, approve the budget, and control resource utilization. At the same time, the absence of independent legal personality means that contractual obligations, liability for damages, and representation issues must be evaluated through the legal status of the foreign organization, the regulations of the unit, and the granted powers.
Registration of an NGO Separate Unit in Ukraine
Since September 3, 2024 (upon the entry into force of Law No. 3257-IX), the accreditation procedure for structural units of foreign NGOs has been simplified, enabling Law No. 755-IV to operate fully regarding their registration. Registration timelines have been reduced – it is now carried out in the Unified State Register within 5 business days. In addition, registration authority has finally shifted from the Ministry of Justice to the competence of notaries and state registrars at Administrative Services Centers, and automatic tax and statistical registration has been introduced, mirroring the long-standing practice for domestic legal entities.
The powers of the person submitting documents require special attention. Law No. 755-IV establishes special requirements for the representative of a foreign legal entity during the state registration of its separate unit. Specifically, such a representative may exclusively be a person from among specially designated primary anti-money laundering subjects who operate on an individual basis. It remains unclear why the legislature established such requirements specifically for the registration of separate units of foreign legal entities while imposing no analogous requirements on the registration of any other entities.
- Establishment of a Charitable Foundation in Ukraine
Pursuant to Article 13 of the Law “On Charitable Activity and Charitable Organizations,” a charitable organization may be established in the form of a charitable society, a charitable institution, or a charitable foundation. For international NGOs, the charitable foundation is of particular interest.
A charitable foundation may be established by a single founder, which can be a foreign private law legal entity, including a foreign non-governmental or charitable organization. At the same time, the law excludes the possibility of establishing a charitable organization by public authorities, local self-government bodies, and other public law legal entities. Thus, an international NGO that possesses the status of a private law legal entity under the laws of its state of incorporation can independently act as the founder of a Ukrainian charitable foundation without the need to involve Ukrainian co-founders.
A charitable foundation is an independent Ukrainian legal entity. It can enter into contracts, acquire property, open bank accounts, accept charitable contributions, attract grant financing, and implement charitable programs. Furthermore, a properly structured governance system enables the foreign founder to ensure strategic control over the foundation’s activities within the limits of Ukrainian law. However, the managerial control of the foreign founder should not be equated with ownership of the foundation’s assets: the property belongs to the charitable organization itself and must be used in accordance with its statutory goals.
Important restriction: the administrative expenses of a charitable foundation cannot exceed 20% of its income in the current year. This requirement must be taken into account when planning the foundation’s budget, especially if the international organization anticipates significant expenditures on personnel, project management, and office operations.
Registration of a Charitable Foundation in Ukraine
The state registration timeframe is 24 hours. A registered charitable foundation is entitled to inclusion in the Register of Non-Profit Institutions and Organizations, provided it complies with the requirements of Paragraph 133.4 of the Tax Code of Ukraine.
- Establishment of a Public Organization in Ukraine
A public organization is a public association whose founders and members (participants) are individuals. An international NGO as a legal entity cannot be a direct founder of a Ukrainian public organization. The founders of a public organization may include citizens of Ukraine, as well as foreigners and stateless persons lawfully residing in Ukraine who meet the statutory age requirements.
The number of founders cannot be fewer than two persons. These individuals, rather than the foreign organization, will hold the relevant legal status in the newly established public association. This significantly impacts the ability of the international NGO to exercise corporate control over the Ukrainian entity.
At the same time, an international NGO may cooperate with a Ukrainian public organization on the basis of grant, partnership, and other legally compliant agreements.
The Law “On Public Associations” provides for another organizational and legal form – a public union, the founders of which can be private law legal entities. Under certain circumstances, it may be considered as an additional model for international partnership.
Registration of a Public Organization in Ukraine
State registration of public organizations is carried out by territorial bodies of the Ministry of Justice of Ukraine. Documents must be submitted within 60 days from the date of formation of the public organization. The state registration timeframe is no later than three business days from the date of document submission. However, this review period may be extended, but for no more than 15 business days.
In practice, state registrars of the territorial bodies of the Ministry of Justice quite frequently exercise the option to extend the document review period, and the chances of refusal are significantly higher compared to notaries and state registrars at Administrative Services Centers.
Tax and Customs Regime for International NGOs in Ukraine
Tax planning for international NGO operations in Ukraine depends on the proper execution of non-profit status and customs benefits. For Ukrainian charitable foundations and public organizations, obtaining non-profit status is a vital element of legal and tax structuring.
A non-profit organization must simultaneously meet statutory requirements:
- Be established and registered in accordance with the law governing the respective organization.
- Have constituent documents that prohibit the distribution of income (profits) or parts thereof among founders, members, participants, employees, members of governance bodies, and other related persons, except for statutory allowances.
- Provide in its constituent documents for the proper procedure for transferring assets upon the liquidation of the legal entity – to one or more non-profit organizations of the corresponding type or to the state budget, subject to statutory exceptions.
- Be included in the Register of Non-Profit Institutions and Organizations.
- Received income must be used exclusively to finance the organization’s maintenance expenses, the implementation of its goals, objectives, and operational areas defined by its constituent documents. Non-compliance with these requirements can serve as grounds for refusing to include the organization in the Register or subsequently excluding it.
Taxation of an NGO Separate Unit in Ukraine
Key feature: a separate unit is not a legal entity and cannot obtain a “non-profit” code under Article 133 of the Tax Code of Ukraine, which requires a separate analysis of non-resident tax risks. In other words, this concerns determining the appropriate tax regime for the foreign organization’s operations rather than obtaining a Ukrainian non-profit status.
In this case, the nature of the foreign organization’s actual activities and the presence or absence of grounds to qualify them as commercial and, consequently, subject to taxation in Ukraine are of fundamental importance. Concurrently, other tax liabilities must be separately assessed, including employee income tax, single social contribution, VAT, transactions with non-residents, and other operations in Ukraine.
Taxation of a Charitable Foundation in Ukraine
A registered charitable foundation is eligible for inclusion in the Register of Non-Profit Institutions and Organizations, provided it meets the requirements of Paragraph 133.4 of the Tax Code of Ukraine. It is important to distinguish between the state registration of a charitable foundation and its inclusion in the said Register—acquiring the status of a legal entity does not in itself mean the automatic acquisition of non-profit status for tax purposes.
Taxation of a Public Organization in Ukraine
A public organization registered as a legal entity may be included in the Register of Non-Profit Institutions and Organizations on general grounds. Public organizations may receive grants, charitable contributions, donations, and other proceeds used to support their statutory activities. The mere receipt of income does not deprive a public organization of its non-profit status, provided that the requirements regarding the targeted use of funds and the absence of prohibited income distribution are observed.
Unlike charitable organizations, public organizations are not subject to the general 20% administrative expense limit provided by Article 16 of the Law “On Charitable Activity and Charitable Organizations.” At the same time, the use of a public organization’s income must comply with the requirements of the Tax Code of Ukraine, its charter, and the terms of relevant financing agreements.
Customs Clearance of NGO Cargo in Ukraine
The importation of goods as humanitarian aid is exempt from import duties and VAT, provided the declaration procedure is observed and supporting documents from the donor and recipient are available.
Grant and Donor Financing for NGOs in Ukraine
When planning grant programs, it is crucial to analyze in advance a specific donor’s requirements regarding the applicant’s legal status and inclusion in the Register of Non-Profit Institutions.
Choosing an International NGO Presence Model in Ukraine: Practical Advice
- Level of control by the international organization. If an international non-governmental organization aims to operate in Ukraine directly as part of its own organizational structure, the separate unit model serves this purpose. If a Ukrainian legal entity is needed instead while remaining under the strategic control of the foreign organization, establishing a charitable foundation is advisable.
- Nature of planned activities. For the systematic provision of charitable or humanitarian aid, financing social programs, and attracting donations, a charitable foundation provides a legal framework specifically tailored by law. For implementing human rights, advocacy, educational, and public initiatives, the public organization model may be acceptable.
- Financing and grant activities. Before establishing a structure, it is necessary to verify the specific donors’ requirements regarding the legal status of grant recipients, the presence of a Ukrainian legal entity, and inclusion in the Register of Non-Profit Institutions and Organizations. Not all donor programs impose identical applicant requirements.
- Tax predictability. The creation of a Ukrainian legal entity with confirmed non-profit status provides a clearer mechanism for applying the rules of Paragraph 133.4 of the Tax Code of Ukraine. For a separate unit, the taxation of non-resident operations requires separate analysis.
- Regulatory and operational requirements. Regardless of the chosen organizational model, additional requirements may arise regarding financial monitoring, employment relations, employment of foreign nationals, foreign exchange transactions, receipt of humanitarian aid, and donor reporting.
Personnel Matters and Employment of International NGO Staff in Ukraine
Structuring the workforce in Ukraine requires compliance with Ukrainian labor legislation, taking into account the provisions of the Law of Ukraine “On Private International Law,” which defines specific rules for the labor of foreign citizens.
For instance, pursuant to Article 54 of the Law of Ukraine “On Private International Law,” labor relations of foreigners working in Ukraine are not governed by Ukrainian law if they work as part of representative offices of international organizations in Ukraine, unless otherwise provided by an international treaty of Ukraine. Furthermore, Ukrainian labor legislation does not apply to foreigners who, outside Ukraine, concluded employment contracts with foreign employers for the performance of work in Ukraine, unless otherwise provided by agreements or an international treaty of Ukraine.
In other cases, the general rule applies – labor relations are governed by the law of the state where the work is performed. Under Ukrainian law, prior to hiring foreign employees – experts, project managers, directors, and other specialists – it is necessary to obtain a work permit for foreigners and stateless persons issued by the State Employment Service.
Conclusions
There is no universal organizational and legal form suitable for all international non-governmental organizations.
If the primary goal is the direct presence of a foreign organization in Ukraine while preserving a single legal structure, evaluating the separate unit model is primarily advisable.
If the priorities are the creation of an independent Ukrainian legal entity, the ability to obtain non-profit status, and the implementation of large-scale charitable activities involving a foreign founder, a charitable foundation may offer significant practical advantages.
A public organization may be acceptable for implementing civic, educational, human rights, and other public-interest initiatives. At the same time, it has specific requirements regarding the composition of founders that preclude its direct establishment by an international NGO as a legal entity, and its state registration procedure is more complex and time-consuming.
The optimal choice should be based not only on the speed and cost of state registration but also on an assessment of the international NGO’s actual operations, management system, funding sources, and long-term tax and regulatory consequences.
