Project reference · Employ without an entity · Payroll and compliance
One person in a new country, no company there, and an exit as tidy as the start.
A European life-science company wanted its first representative in Ukraine before deciding whether to open a company. From 2012 to 2014 we were that representative’s legal employer. We rented a separate office in our own name, ran pay, leave, travel and reporting every month, and sent head office one act and one invoice in euros. When the client’s plans changed in early 2014, we closed the contract, settled the last months against the advance and handed the office back on the agreed day.
1 representative employed and paid by us, reporting to the client’s own managers
Employment
Every month salary, timesheet, travel costs, then one act and one invoice
Payroll
3 approvers line manager, people team and finance, each signing off its own part
Governance
Nothing open contract closed, last invoice offset against the advance, office returned
Exit
The shape of it
Eighteen months, start to finish
Each bar is one thing we ran for the client. The start took about ten weeks; closing everything took about ten weeks too.
The brief
What the client actually needed
The client was testing the Ukrainian market. It had already chosen its first local manager and wanted that person working within weeks, but it did not want to register a company or a representative office before it knew whether the market was worth it.
Its people team, the manager’s line manager and its finance department sat in three different countries. They needed one partner who would employ the representative correctly under Ukrainian law, provide a place to work, and send documents that a head office abroad could approve and book without chasing anyone. A corporate-services firm we work with introduced them to us.
One is still a set-up
An office of one has all the obligations of an office of fifty
A labour contract under Ukrainian law, registration, payroll taxes, leave, sick days, business-trip orders and daily allowances, and an employer who answers to the authorities: none of it gets smaller because there is only one person. On top came the things a first representative needs to do the job, an office, a phone, a car for trips, and expenses that local tax rules do not let you reimburse as freely as head office expects.
The hard parts
Where it gets difficult
An employer for someone else’s manager
The representative reported to the client’s line manager; we held the labour contract. We wrote into it which company the work was for, and every pay or bonus decision stayed with the client, approved in writing before we paid.
An office lease in our name, for them
The representative chose the office. We checked who really owned it, negotiated the deposit and the notice period, signed the lease, and the client approved each cost line first. The client could take the lease over if it ever opened its own company.
Expenses the tax rules do not like
Trips, meals and taxis often come without the papers Ukrainian accounting needs. We agreed a monthly advance and reporting procedure with the client’s finance team, in writing, so nothing was paid that could not be booked.
Paperwork that suits a head office abroad
Scans every month for approval in the client’s own system, stamped originals once a quarter, one act and one invoice in euros. Finance proposed the routine; we wrote it down in eight steps and kept to it.
Every euro checked by the bank
Service payments from abroad fall under currency control. We matched each incoming payment to its act and wrote the letters the bank asked for, down to the small bank charges.
An exit planned like a start
When the representative moved to a new employer, we agreed the termination steps with finance in one call, paid the final settlement correctly, offset the last invoice against the advance and ended the lease on the agreed date.
What we did
Set up, run, tighten, close
- 2012 — Set up. Offer, service agreement, labour contract and a desk in our office from the first day; then a separate office, phone and car hire.
- 2012–13 — Run. Monthly pay, timesheets, leave, business-trip orders and expenses; one act and one invoice; a cost summary for head office every half year.
- 2013 — Tighten. A written expense-advance procedure with finance, a contract amendment for new bank details, and currency-control letters to the bank.
- 2014 — Close. Notice, final settlement, last invoice offset against the advance, lease ended, closing documents signed and returned.
Most companies plan how to start in a new country. This client also got an ending that left nothing open, for itself, for the representative or for the authorities.
How we work
We do not show you another company’s name
The client and its people are not named here, and they will not be named in a meeting either. We are glad to talk this project through in detail. What we will not do is discuss the last client that way with you, or you with the next one.
Next step
Testing a market before you open a company?
Tell us who you want to hire and where. We will tell you what it costs to employ that person through us each month, what the first weeks look like, and how it ends cleanly if your plans change.