As Europe’s second-largest country by population and area, Ukraine is known for its biological diversity and rich history. Apart from its cultural and natural attractions, Ukraine also has a growing economy with opportunities for businesses to thrive. The IT services market alone is expected to be worth $4.60 billion by 2029. Other sectors that are seeing growth in Ukraine include manufacturing, agriculture, and finance.

Despite the Russian-Ukrainian conflict, The Economist reports that Ukraine is winning the economic war. The country’s central bank forecasts that its gross domestic product (GDP) will grow by 4.3% in 2025.

In such hopeful economic conditions, it’s no wonder that foreign companies are attracted to setting up businesses in Ukraine. However, it’s quite complicated and tedious to establish your business presence in a new country. Working with a professional employer organization (PEO) can help make the process easier. Let’s discuss how.

What Are PEOs in Ukraine?

A PEO in Ukraine is a company that partners with businesses to handle their human resources (HR), payroll, and employee benefits. When you enter Ukraine, you’re required to do one of the following:

  • Set up a local legal entity: A legal entity is a company that has its own legal status, separate from its owners. You will have to register your business with the Ukrainian authorities and comply with all the legal requirements for doing business in the country.
  • Work with a global employment platform: A global PEO or employer of record (EOR) platform allows you to hire employees in Ukraine without the need to set up a legal entity. The PEO will act as your local employer in the country and handle all employee and compliance-related operations on your behalf.

The latter option is more suitable for companies that don’t want to spend too much time or money dealing with the regulatory intricacies of setting up a business entity in Ukraine.

Difference Between PEO and EOR

Above, we’ve mentioned how a global PEO can also be an EOR. It’s common to use both terms interchangeably, but there’s a core difference between them.

A PEO acts as your co-employer, so there’s a sharing of responsibilities. On the contrary, an EOR becomes the legal employer of your employees, taking on all the responsibilities and liabilities associated with employment.

Both types of companies offer varying services. When you’re looking for a PEO to work with in Ukraine, you have to first check if they offer all the services you need. Some PEOs are more focused on providing HR solutions, while others offer end-to-end services, including employee development and tax compliance.

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How Does a PEO in Ukraine Help Businesses?

The Ukrainian Labor Code and constitution lay down the laws and rules for employment in the country. These regulations are applicable to a labor force of over 20 million, which includes both local and foreign employees.

A PEO helps businesses navigate these complex regulations by acting as their local employer. Here are some laws the PEO may help with:

Minimum Wage

In January 2026, the Ukrainian government set the minimum wage to be UAH 8,647, with the hourly wage at UAH 52. When you establish your business in Ukraine, you have to make sure you’re meeting these criteria so that you don’t face legal issues in the future.

Discrimination Laws

Like most countries, Ukraine also has laws against discrimination in the workplace. Your PEO will help you understand and comply with these laws to keep a fair working environment for all employees.

Work Permits

Foreigners who want to work in Ukraine need a work permit and meet certain criteria. A PEO can assist in obtaining these documents for your workers.

Tax Laws

Ukraine has complex tax laws that businesses must adhere to, including corporate income tax and personal income tax. Employers have to allocate 34.7% of the workers’ salaries as Unified Social Tax, while the income tax rate is at 18%. There’s also an 18% corporate tax rate. Your PEO can help manage these taxes and file the required documents according to government-issued deadlines.

Termination and Severance Laws

According to Ukrainian laws, employers can terminate employees in some situations, like mutual agreement. However, without a proper cause, the terminations can be difficult. Employees must also be given a severance package based on their length of service. Your PEO can advise you on the proper procedures for termination.

Which Businesses Need a PEO in Ukraine?

Regardless of the sector or industry, any foreign business planning to establish its presence in Ukraine can benefit from a PEO’s assistance. However, some businesses may need it more than others.

For example, if you’re setting up a small business or a startup, you’ll have to start a lot of administrative tasks from scratch. Plus, you will need to invest a lot of time in these activities, due to which your day to day operations may take the back seat.

However, if you partner with a PEO for small businesses, this won’t be an issue. The PEO will already be familiar with Ukrainian laws so that they can handle all related paperwork and compliance issues. This way, you’ll have more time and resources to focus on actual work.

Similarly, a business with a tight budget can also use a PEO for business administration. As mentioned earlier, Ukraine has various taxes and other financial obligations that foreign businesses must comply with. Self-management of these tasks can be expensive. Also, non-compliance due to unfamiliarity with the laws can result in penalties.

With a PEO’s help, you’ll know exactly what to do and when to do it, which will save you a considerable amount of money in the long run. For companies in highly regulated industries like healthcare, this is even more important. They can’t afford to lose money or their reputation in a new market, especially when their service nature makes it necessary for them to follow stricter laws.

What Are the Benefits of Using a PEO in Ukraine?

When you team up with a PEO in Ukraine, you cut your administrative burden by a significant margin. Apart from that, here are some other benefits of using a PEO to expand your business in Ukraine.

Simplified HR Processes

The management of HR tasks is not just time-consuming but also resource-intensive. In a new country, it’s even more daunting since the laws and regulations are different from those in your home country.

It takes a lot of time to get familiar with these laws, and even then, it’s easy to make mistakes. For a business, these errors can result in reputational and monetary losses. When you work with a PEO, they handle all the HR processes for you, from recruitment and onboarding to payroll and benefits administration.

Expert Guidance on Local Employment Laws

Ukraine already has complex labor laws. After the outbreak of COVID-19 and later the Russian invasion, the government introduced new regulations to support businesses and employees.

As a new business in Ukraine, it can be tricky to keep up with the changing laws. Since the business landscape is also quite competitive, you must not slip up and unwillingly give your competitors an edge.

With a PEO by your side, you can rest easy knowing that they are always on top of local labor laws. So, they will keep you compliant, too.

Quick and Cost-Efficient Market Entry

Entering a new market is extremely time-consuming. From registering your business and setting up bank accounts to obtaining work permits for your employees, there are numerous steps you have to take.

Not only is this process lengthy, but it also requires a lot of upfront investment. When you partner with a PEO in Ukraine, they take over all these tasks so that you don’t have to worry about them. Their familiarity with the local market can help you navigate through the bureaucratic procedures efficiently.

Access to Top Talent

Many PEOs also help businesses find and onboard employees in a new country. Doing this yourself is rather challenging, especially when you are not familiar with the local job market and culture. You’re also competing with local businesses for the same pool of talent.

Since a PEO has previously helped other businesses enter the market, they know where to look for qualified candidates and how to approach them. They can also provide valuable insights on local salary expectations and benefits, making sure that you are offering competitive compensation packages to attract top talent.

A PEO also handles all the paperwork and legalities involved in hiring employees, saving you time and resources that can be better used in growing your business.

Business Scalability

You might start as a small operation in Ukraine, but as time goes on, you’d obviously want to expand your business and hire more employees. Again, doing this yourself requires a lot of time and money. A PEO that has been by your side from the start can assist you in the growth and scaling process. 

What to Look For in a PEO in Ukraine?

Finding a PEO to establish your business in Ukraine is a task that requires thorough research and consideration. Here are a few things to take into account during this process.

Relevant Experience

The PEO you select should tick two boxes. First, they should have previously helped businesses like yours enter the Ukrainian market, and second, they must have experience in your industry.

For example, if you’re a retail brand, it’s best to work with a PEO that has helped other retail businesses establish themselves in Ukraine. This requirement is even more important for heavily regulated sectors.

Services Offered

Different PEOs offer different services, so it’s important to understand what they can provide before making your decision. Some only handle payroll and HR tasks. Others may also assist with legal compliance, employee benefits, and tax management.

Look for a PEO that provides the services you require in Ukraine. If you manage some services in-house, such as recruitment or payroll, find a PEO that is willing to work with your existing processes and systems. They can then manage the tasks you’re not doing yourself, such as tax compliance or benefits administration.

Transparent Pricing

It’s very important that you don’t face any hidden costs or surprises when working with your PEO. A reliable PEO will be upfront about their pricing structure. Typically, PEOs offer the following pricing models:

  • Per Employee: In this structure, you have to pay a set amount for each employee. For example, you have 100 employees, and the PEO in Ukraine charges you $70 per employee. So, you will have to pay $7,000 each month for their services. There’s a pre-arranged agreement on services that are included in that price.
  • Monthly Retainer: Some PEOs may charge a monthly retainer fee, which is a flat rate for all of their services for up to a certain number of employees. If you’re a large company, this is a suitable pricing model for you.  
  • Payroll Percentage: The percentage of payroll pricing structure is calculated as a percentage of your total payroll. Let’s say you pay your employees $100,000 per pay period, and the PEO’s fee is 5%. You’ll need to pay them $5,000 each time you run payroll.

It’s up to you to decide which type of pricing structure works best for your company. Irrespective of what you choose, read the agreement carefully and ask questions about any costs that you’re unsure of.

Technology

PEOs use a range of tools for purposes like timekeeping, employee onboarding, benefits enrollment, or payroll management. They also have centralized platforms where clients can see employee records and access important information.

These technological capabilities can impact the quality of service a PEO provides. Nowadays, it’s imperative that PEOs have advanced technology to handle the multitude of tasks involved in HR management. You must choose a PEO that has up-to-date tech that can integrate with any existing systems you may want to continue using. 

Hire Employees in Ukraine

Ukraine has a large population of highly educated and skilled workforce, which can help any new business establish a strong presence in the region. However, the first step is finding this talent.

RemotePeople supports companies hiring in Ukraine by helping them access top local expertise across 150+ countries while ensuring employment is handled compliantly and efficiently. Our Employer of Record service streamlines the process so you can onboard talent quickly without dealing with complex administrative setup or regulatory hurdles.

Get in touch with us to learn more about our services and how we can help you achieve your business goals in Ukraine.

Frequently Asked Questions

Many PEOs offer recruitment and employee onboarding services. They assist with sourcing, screening, and hiring local talent, particularly in high-demand sectors like IT and engineering. Some even train your employees and run talent development programs. 

Teaming up with a PEO eliminates the costs of setting up a legal entity in Ukraine or paying for multiple services individually. You pay for services on a per-employee or flat-rate basis, which is often more affordable than handling everything in-house.

While the PEO becomes the legal employer, you retain control over your employees’ daily tasks and overall management. The PEO mainly handles administrative tasks like payroll and compliance.