Compliance of Ukrainian Company

We provide legal compliance of Ukrainian companies. We can make a fundamental juridical investigation of Ukrainian companies based on government opened sources and based on documents provided by such a company and make our legal conclusion. By request, we can also make independent and confidential compliance of Ukrainian supplier and that company will not be informed about such scrutiny. The process of verification of the Ukrainian company takes from 2 to 5 working days. Check the Ukrainian company before dealing with it. If you intend to deal with a Ukrainian vendor we can provide you with the following legal compliance and advisory services:

  • legal compliance of Ukrainian company;
  • legal checkup of Ukrainian supplier;
  • drafting of the export contract;
  • legal support of dealing with Ukrainian contractor and mediation with that company;
  • verifying a company in Ukraine.

Why is it necessary to make compliance of the Ukrainian supplier?

Before signing a contract with the Ukrainian supplier of goods and services it is worth checking that company. It is strongly recommended to do if you are dealing with such a contractor the first time. Moreover, it is necessary if you have to make an advanced payment to such a company. Checking the Ukrainian company is a particular process that requires years of experience. It is worth making this kind of due diligence of your vendor if you want to know well your supplier from Ukraine.

Prices for many products in Ukraine are cheaper (sometimes much cheaper) than in other countries. Ukraine is one of the biggest agriculture-producing countries. But consider that due to Ukrainian “not perfect” legislation and current legal practice it is not easy to take back money from the unscrupulous supplier. And it is not a fast procedure. In order not to face the situation when you have to go to the Ukrainian court or to the International Court of Arbitration (ICC) and spend your time and money for this unpleasant procedure, you should do your best to make sure that you are dealing with a responsible and credible contractor from Ukraine.

Unfortunately, often we get requests from foreign companies that have ordered products to be supplied from Ukraine but after making an advanced payment didn`t get anything. Always such problems appear in case when the company from Ukraine has not been properly checked. Usually, it happens when the customer finds a very attractive cost for the goods takes a decision based on the information mentioned on the website. We do not recommend you trust fully the certificates, declarations, and other documents provided by a Ukrainian contractor unless you get officially certified hard documents. Also, the information on the website of the contractor is not always truthful. It is strongly recommended to check the company itself through official government sources such as the Ukrainian Register of Court Decisions, Ukraine Company Register, Tax Authority Register (to check if there are any debts). It is very important to be sure that the company is real and that the company has already done such supplies to other clients before. If you are going to order the first time from a new contractor from Ukraine it is necessary to make sure the following:

  1. That vendor’s company does actually exist. It is to be checked at the register of Ukrainian companies. The customer or the buyer has to be sure that the supplier is officially registered and that it is not in the process of dissolution or bankruptcy.
  2. That the company has no (or at least has minimum) lawsuits. At the same time if there are any disputes where the supplier is involved it doesn’t mean that you should refuse such a contractor immediately. Many good and responsible companies in Ukraine have trials so it is necessary to analyze what exactly are such trials about.
  3. That the company should not have debts in front of the government, private companies, and individuals. It is risky to go to business with such a company as there are chances that the accounts might be blocked or even arrested.
  4. That the contractor has already shipped the same goods and/or products before. It can be checked through the customs register as well as through the database of customs declarations of Ukraine.
  5. That the purchase contract is made in a proper way. We are sure you know that this is one of the most fundamental and important documents between the buyer and the supplier. Considering that in most cases advanced payment is required from the buyer, it is strongly recommended to draft the purchase agreement in such a way that it covers all the buyer’s risks.
  6. That the contract is signed by the person that has the proper authority and/or right to sign such documents from the side of the supplier. As Ukraine is the party of many international agreements that regulate international trade, it is a must to mention delivery terms based on Incoterms published by the (ICC). Remember that when buying goods from Ukrainian suppliers the company shall be Ukrainian as well. It can also be a representative office of a foreign company in Ukraine but in such case, there shall be proper documents. It is very important because the company in the customs declaration and in the contract and in the invoice shall be the same. So be especially attentive if any future shipper offers you a contract with a company that is not registered under Ukrainian law.

Shall I make an advanced payment to a Ukrainian supplier or contractor?

In most cases, the answer is yes. Most of the good and responsible suppliers with a perfect reputation before making an export or a customs clearance of shipment require at least 50% advanced payment. Some companies require even a full 100% payment of the cost of the goods before shipping. It is especially popular if you are buying food products from our country. In case if you are dealing with a supplier the first time and if everything seems to be ok with that company try to make the advanced payment on the day when the goods are shipped and when the customs clearance is done. It this case the contractor will have to provide you with the customs declaration that confirms the shipping.

Before making the payment to the supplier you need to have at least 3 documents:

  • the contract, that shall be properly drafted and signed by both parties;
  • calculation and/or specification from your Ukrainian contractor (shall be signed and certified by contractor’s seal/stamp);
  • invoice (shall be signed and certified as well and shall be based on the certain contract and on the certain specification; consider that the IBAN in the invoice begins with UA; make sure that the company mentioned in the invoice and in the contract and in the customs declaration is the same one).

It is not recommended to make any kind of payment in case if the supplier is invoicing you from not Ukrainian account. Be especially careful if the contractor tries to convince you that the company that has invoiced is the intermediary. Sometimes during making compliance of Ukrainian supplier our company experience that the supplier refuses to make the delivery when we start our legal work. All the cheating companies in Ukraine (and not only) don’t want the buyer to make a checking procedure of their business. So to refuse to ship the goods is a better option for them than to admit that they are rogues.

Another very important thing is that before paying an invoice you have to make sure that the export of the ordered goods is not restricted or forbidden. It rarely happens but still, you should check.

What is the best way to buy goods from Ukraine?

If you intend to purchase and export products from Ukraine permanently the best way is to buy such goods with your Ukrainian company and to export by yourself. You will need to make a company formation in Ukraine for this and make a company accreditation at the customs. It is worth to do it in case if big turnover is expected. This is the way to control the whole process with your own stuff and to build an efficient trading system. Depending on the type of product that you are dealing with, it is also possible to have a storage or a warehouse in Ukraine to optimize logistics.

Consider also that you can buy goods in Ukraine at a cheaper price than the price after customs clearance. It is not because of high export duties, that actually in most cases are 0. That is because many of Ukrainian manufacturers and producers groundlessly do not want to deal with Ukrainian customs. Still, our customs service is far not perfect, but what we can tell you for sure that it is much easier to export goods from our country than to import in. 

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