• Legal Ideas

RECRUITMENT BUSINESS

Updated: Aug 1, 2019


Ukraine has always been a powerful source of qualified and skilled labor for foreign countries. Italy, Poland Slovakia, Hungary, Czech Republic, the UK, US, Canada were main recipients of Ukrainian human resources with Russia being on top of them.


Sadly, living conditions in Ukraine deteriorated in 2013 due to a political crisis and a military conflict with Russia in the east of the country. This caused thousands of civilians to abandon their homes and to migrate to safer regions. As a result, a massive number of both highly-professional and unskilled Ukrainian employees, as well as businessmen, are looking now for jobs. Needless to say this reflects also upon labor of the other (peaceful) territory of the country as competition on the job market has significantly increased.


Therefore, Ukraine is experiencing now quite active outflow of labor. Moreover, in contrast to usual such a phenomenon, the present situation differs by outflow of businessmen, capital and highly skilled professionals. Evidently, all these offer great opportunities for outsourcing and recruitment business.


It important, that assistance in employment abroad is subject to licensing in Ukraine. The license is issued by the Ministry of Social Policy of Ukraine for a perpetual time and is valid within all territory of Ukraine.


As of 01.07.2019, there are in total 1917 licensed companies in Ukraine hunting for Ukrainian man- and brainpower for other countries. Only 2 years ago, in 2017, this number was a little bit over 900 companies.


So, the numbers clearly show a high demand for this service in Ukraine. More than 1 million Ukrainians emigrated last year for oversea work. According to the official statistics 18% of workable Ukrainians worked abroad in 2018.


Below is a table of a number of Ukrainians looking for jobs by sectors of economy in 2018 according to the official statistics of the Ministry of Social Policy of Ukraine in 4 regions:

This table above represents only those who are officially unemployed and submitted their resumes to the State Employment Service of Ukraine. In real life, a number of people willing to go and work abroad is many times higher. According to different surveys as many as 65% of Ukrainians are ready or seriously think about leaving Ukraine for a better life abroad.


Ukrainians are not very picky in terms of jobs to take and countries to emigrate to and are happy to take those jobs that were left by emigrants from Poland, Slovakia, Croatia, the Baltic countries, etc.


To understand why Ukrainian manpower is so cheap it is enough to consider the average salary according to the last official data of the Ministry of Social Policy of Ukraine. Below is the table of these salary in 4 Ukrainian regions:


HOW TO RUN A RECRUITMENT BUSINESS IN UKRAINE


According to the Licensing rules for facilitation in employment abroad (official text of the Rules is published on the official website of the Ukrainian Parliament here) there are many requirement a license candidate has to comply with.


For general insight lets dwell on the main ones:

  1. there has to be a real brick and wall office (so called “nominal” or “legal” offices are not acceptable);

  2. recruiter is obliged to report to the Ministry of Labor of Ukraine on a number of persons employed by him abroad. So, a proper professional bookkeeping is vital here;

  3. recruiter (your Ukrainian company) has already to have a contract with an overseas employer or an overseas employment agency who orders job candidates from the recruiter. A copy of this contract has to be submitted together with other documents when applying for this license. So you cannot just collect information about job-seekers first and after that try to find work for them. You are obliged first to find an employer and only then to start looking for employees for him;

  4. the recruitment services are considered provided (and therefore the recruiter’s fee is due) only after execution by the recruiter and the job-seeker of a services acceptance-and-delivery act. This act can be executed only after a relevant employment agreement is signed between the job-seeker and his foreign employer. So, you cannot take down payments from job-seekers.

  5. the recruiter has to have a lawyer among its staff or to contract a lawyer/law firm.


WHICH BUSINESS FORM TO CHOOSE


If you are already legally reside in Ukraine based on a temporary or permanent residence permit, then you may consider getting registered as a private entrepreneur. You can read about how to do this and what the cost of this is in our guide here.


If you do not have legal grounds for staying in Ukraine, then you can register a company in Ukraine. This way you will get Ukrainian residence for 3 years and will be able to officially run a language school. Having a company allows you also attract investments and partners more easily as you can give shares in your company to your business partners. The full process of company registration in Ukraine together with a process of getting residence is described in detail in our guide here.


ESTIMATED BUDGET


Below is an estimated budget we calculated based on the current market prices and interviews of language school owners we interviewed. Keep in mind that the numbers differ in different cities, so this is only a rough estimation.


USD 80 – license fee

UAH 2,000.00 – company registration

UAH 10,000.00 – furniture

UAH 3,000.00 – accountant per month

UAH 10,000.00 – office rent per month

UAH 2,000.00 – social taxes per employee per month

5% simplified corporate profit tax per month paid out of total cashflow OR 18% standard corporate profit tax per month paid out of profit


Contact Legal Ideas law firm to get assistance in opening a language school or to get advice on obtaining a teaching license.

Телефон: +380997227871

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