As mentioned in the Legal & Financial section a large part of Ukrainian economy is so called «gray» economy. It is rather difficult to most clients from Western Europe or the USA to understand our local laws, regulations and traditions. There are many reasons for why it works in such manner, such as political instability, ever-changing tax code, poor investment climate etc. That said, how does it effect you?
Well many skilled IT professionals are expecting to receive salaries in cash in USD. If you are opening a small office with 10 developers with average salary of $3000 per month, that’s $30,000 each month purely in salary expense. The question is, how do you set up just your payroll, where each month you need $30k net to pay your developers.
If you follow the official guidelines, set up an official company, or a representative office that $3000 net salary skyrockets to about $5000 gross to the company if you factor in Pension Fund withholding (22.5%) and Income Tax withholding (18%) which the employer is obliged to withhold from the salary payment. All of a sudden cheap highly skilled IT professional is no longer very cheap.
The solution is to optimize your taxes and we can help you with that. You can use our company as an intermediary to process monthly payroll with our fees ranging from 7-10%.
Additionally for someone who does not care about non-core activities, we can assist with hiring qualified administrative help, such as office managers, receptionists, personal assistants and interpreters. The salary level for these workers range from $400 to $1500 a month net.