We provide comprehensive legal and consulting services of the charitable organizations set up in Ukraine. We make the process of charity registration and formation in Ukraine easy and fast.
What do we do?
- consultation on process and procedure of Ukrainian charitable organization registration;
- advisory on risks and important aspects of charitable activity in Ukraine;
- drafting needed documents for charitable organization formation (inc. statute or charter of organization, minutes);
- charity registration in state authorities;
- seal (emblem) and bank account obtaining;
- obtainment of non-profit status in Ukrainian tax authorities;
- tax consulting on charitable activity in Ukraine;
- legalization and registration of international or foreign charitable organization activity in Ukraine (if needed);
- mediation and dispute resolution (if needed);
Ukrainian legislation on charitable organizations
A charitable or philanthropic organization is a non-profit (NPO) private law legal entity, whose constituent documents define charitable activity in one or several spheres as the main goal of its activity. Individuals and legal entities, except for public authorities, local governments can be the founders of charitable organizations. Founders of charitable organizations make a decision on the establishment of charitable organizations, approve their constituent documents and the approval of bodies, and make other decisions related to the formation and state registration of charitable organizations. Consider that In Ukraine, charity funds are different from Ukrainian non-governmental organizations. Although at the same time both are non-profit organizations.
To register charity organization founders shall approve the constituent legal document, called statute or charter of the organization in Ukraine. The Charter is approved on the basis of a protocol (so-called minutes of a general meeting). Basically charter must contain what types of persons will receive help from such an organization. Also, this document shall have the procedure of dissolution of Ukrainian charitable organization.
The legislation of charitable activity in Ukraine and the procedure of establishing a charitable organization is regulated by the Civil code of Ukraine and by the Law of Ukraine “On Charitable Activities and Charitable Organizations”.
Types of charitable organizations in Ukraine
By Ukrainian law, there are three forms of charitable organization:
- charitable society (a charitable organization created by at least two founders and operates on the basis of the charter or statute);
- the charitable institution (is a kind of charitable trust; acts on the basis of the constituent or founding act; a charitable organization whose founding act defines assets that one or several founders transfer to achieve the goals of charitable activity from such assets and/or income from such assets. A constituent act of a charitable institution may be contained in a will or testament. The founder or founders of the charitable institution do not participate in the management of such a charitable organization);
- charitable fund or charitable foundation (is a charitable organization that operates on the basis of the charter; has participants or members and is managed by them; participants or members are not obliged to transfer any assets to such organization in order to achieve the goals of charitable activity; charitable foundation can be created by one or several founders. Charitable fund assets can be formed by participants and/or other benefactors).
Charitable societies and charitable foundations may have (besides founders) other participants who have joined them in the way prescribed by the charters of such charitable associations or charitable foundations.
Taxation of charities in Ukraine
By Ukrainian law, charitable organization, naturally, is exempt from taxation by VAT, income and corporate tax. All funds received by a charitable organization that was used for charity purposes are exempt from taxation. But it requires to obtain a status of a non-profit at the tax authority. Ministry of justice is the main registration authority for charitable organization constitution. Also, consider that it is necessary to pay payroll (or so-called employment) taxes, fees, and payments to social security. One more important moment is that funds, property, or assets of a philanthropic organization can not be distributed between the owners or members of such an organization. It is restricted even during (or after) the dissolution of such an organization. All assets or property during a liquidation procedure can be transferred only to other charities of the same type and/or to the state budget of Ukraine. It was made with the aim to avoid cases when a charity entity is used for tax optimization or some other illegal schemes.
Non-Ukrainian citizens (individuals) and legal entities (corporations, companies, non-governmental organizations) can be founders and members (or participants) of philanthropic organizations in Ukraine. Legalization needed for International charitable funds to make activity in Ukraine.
We hope this information was useful for you, and we hope that a charitable activity will bring you (in the case if you will make it) a lot of joy and will be successful.