The government has introduced a special relocation program for businesses affected by the hostilities or wishing to move to safer regions.
The program allows businesses to relocate their employees, facilities, equipment, property, and raw materials and set up operations at a new location.
Read how relocation works in wartime and what entrepreneurs need to do to take advantage of it in the analytical material from MK Legal Service
The program allows businesses to relocate their employees, facilities, equipment, property, and raw materials and set up operations at a new location.
Read how relocation works in wartime and what entrepreneurs need to do to take advantage of it in the analytical material from MK Legal Service
Features of the state relocation program
To begin with, some statistics.
As of the beginning of May 2022, the Ministry of Economy has already processed more than 1000 applications for relocation, more than 400 of which have already moved, 216 have resumed work at the new places, and another 500 are in the process of relocation.
Zakarpattia, Lviv, and Chernivtsi regions are among the leaders in accepting entrepreneurs who are forced to relocate, while Ternopil and Ivano-Frankivsk regions are somewhat less likely to be chosen for relocation.
As of the beginning of May 2022, the Ministry of Economy has already processed more than 1000 applications for relocation, more than 400 of which have already moved, 216 have resumed work at the new places, and another 500 are in the process of relocation.
Zakarpattia, Lviv, and Chernivtsi regions are among the leaders in accepting entrepreneurs who are forced to relocate, while Ternopil and Ivano-Frankivsk regions are somewhat less likely to be chosen for relocation.
How does the relocation process work?
1. You apply at the link
You need to provide the following information about your company:
! Important: the more detailed information you provide about your company, the faster your application will be considered!
2. Your application will be considered for 1 to 5 days, depending on the specifics of your business.
Preference is given to enterprises that produce:
All reviewed applications are queued according to the priority of processing.
The order in the queue is influenced by, among other things
! Important: the more actions you can take to prepare and deliver materials, the higher your application will be in the queue.
3. After your application has been assigned to work, you should be contacted by specialists from the regional state administration from the region to which your company will move.
It is here that many legal issues are resolved, which we would like to dwell on in more detail.
You need to provide the following information about your company:
- business registration number and address;
- business specialization;
- requirements for production facilities, in particular, the required volumes of electricity, gas, water
- the need for raw materials;
- the need to accommodate employees and their quantity;
- availability of equipment, peculiarities of its installation and start-up, and its quantity;
- the preferred method of moving the company, property, and facilities.
! Important: the more detailed information you provide about your company, the faster your application will be considered!
2. Your application will be considered for 1 to 5 days, depending on the specifics of your business.
Preference is given to enterprises that produce:
- food products
- water
- clothing
- belonging to the defense industry
All reviewed applications are queued according to the priority of processing.
The order in the queue is influenced by, among other things
- how much equipment needs to be transported and its size
- how difficult it is to dismantle and relocate the facilities to a new location
- whether the locations where the company can be located are available, considering all the nuances
- which region you have chosen to move to and where your company is located
! Important: the more actions you can take to prepare and deliver materials, the higher your application will be in the queue.
3. After your application has been assigned to work, you should be contacted by specialists from the regional state administration from the region to which your company will move.
It is here that many legal issues are resolved, which we would like to dwell on in more detail.
1) Lease issues.
At this stage, the production, warehouse, and office premises to which the company will move are selected, the terms of their lease are agreed upon, and contracts are concluded.
It is important to estimate the amount of space to be provided and compare it with the technical requirements for the equipment so that you do not have to move everything to another location again due to miscalculations.
It is also necessary to check the terms and conditions of the lease agreements, which should consider the current conditions and the temporary nature of the relocation process.
! Important: the cost of renting municipal property for the entire period of martial law is UAH 1 per m2.
2) Technical issues.
Depending on the required volumes and needs, water, gas, electricity, and other utilities are connected to the future location of the enterprise. After preliminary approval of lease issues, preparations are made for the installation of facilities and equipment.
It is necessary to check whether the identified capacities will be sufficient and whether the technical features of the networks will meet the activities of your company.
3) Logistics issues.
For the direct transportation of the enterprise to the western regions, entrepreneurs can take advantage of both offers from the state in the form of Ukrposhta and Ukrzaliznytsia, and the help of private delivery services.
Ukrposhta provides property transportation services free of charge, which is regulated by the Resolution of the Cabinet of Ministers of Ukraine No. 305 dated 17.03.2022.
As the representatives of the Ministry of Economy themselves advise, if you rely entirely on Ukrposhta's assistance, the entire transportation process may be delayed.
During the moving process, you will need to take care of the following issues
- Preparation of internal accounting documentation for the movement of company property
- Preparation of waybills for transportation
- passing through checkpoints;
- preparation of documents for reimbursement of transportation costs.
Therefore, even if you engage third-party carriers, the state will compensate you for the cost of transportation.
Even at the stage of forming an application, it is important to take an inventory and make a detailed list of all the properties you plan to transport, including their characteristics, dimensions, and weight. This will help not only to submit the application correctly and increase the chances of its quicker consideration, but also to draw up all the documents for transportation clearly and quickly.
In the future, when registering transportation, all property can be transferred by an act of acceptance from one division of the company (old location) to another (new safe location).
4) Personnel issues.
The local authorities will assist officially employed workers with resettlement at the new location together with their families. In case of any questions, the State Labor Service and the State Employment Service promise to help with the correct execution of personnel documents for relocated employees and the recruitment of new ones.
When relocated due to military operations, all employees' essential working conditions change, so there is no need to comply with the early notice requirements.
At the same time, if you work with individual entrepreneurs, they will need to be re-registered separately, and additional guarantees for resettlement at a new location do not apply to them.
At this stage, the production, warehouse, and office premises to which the company will move are selected, the terms of their lease are agreed upon, and contracts are concluded.
It is important to estimate the amount of space to be provided and compare it with the technical requirements for the equipment so that you do not have to move everything to another location again due to miscalculations.
It is also necessary to check the terms and conditions of the lease agreements, which should consider the current conditions and the temporary nature of the relocation process.
! Important: the cost of renting municipal property for the entire period of martial law is UAH 1 per m2.
2) Technical issues.
Depending on the required volumes and needs, water, gas, electricity, and other utilities are connected to the future location of the enterprise. After preliminary approval of lease issues, preparations are made for the installation of facilities and equipment.
It is necessary to check whether the identified capacities will be sufficient and whether the technical features of the networks will meet the activities of your company.
3) Logistics issues.
For the direct transportation of the enterprise to the western regions, entrepreneurs can take advantage of both offers from the state in the form of Ukrposhta and Ukrzaliznytsia, and the help of private delivery services.
Ukrposhta provides property transportation services free of charge, which is regulated by the Resolution of the Cabinet of Ministers of Ukraine No. 305 dated 17.03.2022.
As the representatives of the Ministry of Economy themselves advise, if you rely entirely on Ukrposhta's assistance, the entire transportation process may be delayed.
During the moving process, you will need to take care of the following issues
- Preparation of internal accounting documentation for the movement of company property
- Preparation of waybills for transportation
- passing through checkpoints;
- preparation of documents for reimbursement of transportation costs.
Therefore, even if you engage third-party carriers, the state will compensate you for the cost of transportation.
Even at the stage of forming an application, it is important to take an inventory and make a detailed list of all the properties you plan to transport, including their characteristics, dimensions, and weight. This will help not only to submit the application correctly and increase the chances of its quicker consideration, but also to draw up all the documents for transportation clearly and quickly.
In the future, when registering transportation, all property can be transferred by an act of acceptance from one division of the company (old location) to another (new safe location).
4) Personnel issues.
The local authorities will assist officially employed workers with resettlement at the new location together with their families. In case of any questions, the State Labor Service and the State Employment Service promise to help with the correct execution of personnel documents for relocated employees and the recruitment of new ones.
When relocated due to military operations, all employees' essential working conditions change, so there is no need to comply with the early notice requirements.
At the same time, if you work with individual entrepreneurs, they will need to be re-registered separately, and additional guarantees for resettlement at a new location do not apply to them.
Tips for businesses planning the relocation
Finally, we will share useful experiences and advice from entrepreneurs who have already successfully relocated to western Ukraine.
Companies that had dealerships in the west and significant stocks of raw materials from suppliers were able to relocate and resume operations fairly quickly. Entrepreneurs took advantage of their partners' warehouses and locations to reach pre-war production rates, and in some cases even exceed them.
Assess the extent to which your production depends on supplies from other regions and exports, especially maritime exports. If possible, at the beginning of the relocation procedure, start negotiations with current and potential partners who can start supplying or reselling you the necessary raw materials that will be difficult to order after you have completely moved to a new location.
Some entrepreneurs have decided to relocate only part of their production. This was influenced by many factors: the difficulty of dismantling and transporting certain equipment, the decline in demand for this product, and the already mentioned lack of raw materials. However, it helped them focus on fewer items and increase their production rates.
If you have a lot of equipment to transport, and you can't load it all at once, it's best to send the equipment that takes the longest to assemble in the first batches. When the last shipment arrives at the new location, the production cycle can be started more quickly.
Few producers managed to retain 100% of their staff: men could join the ranks of the TRO or the Armed Forces, and women could go abroad. Therefore, even with full warehouses of raw materials and properly configured facilities, entrepreneurs will face a shortage of staff. Therefore, the advice from entrepreneurs who had to start from scratch at a new location is to relocate the core team to form a working group and launch the first processes.
Local business associations can help you get back on your feet faster and expand your connections. Their members are interested in the development of the region, so you can negotiate discounts on raw materials, purchase and rental of equipment, placement of products and materials in their warehouses, expansion of the logistics network, temporary outsourcing, and outstaffing of workers.
Companies that had dealerships in the west and significant stocks of raw materials from suppliers were able to relocate and resume operations fairly quickly. Entrepreneurs took advantage of their partners' warehouses and locations to reach pre-war production rates, and in some cases even exceed them.
Assess the extent to which your production depends on supplies from other regions and exports, especially maritime exports. If possible, at the beginning of the relocation procedure, start negotiations with current and potential partners who can start supplying or reselling you the necessary raw materials that will be difficult to order after you have completely moved to a new location.
Some entrepreneurs have decided to relocate only part of their production. This was influenced by many factors: the difficulty of dismantling and transporting certain equipment, the decline in demand for this product, and the already mentioned lack of raw materials. However, it helped them focus on fewer items and increase their production rates.
If you have a lot of equipment to transport, and you can't load it all at once, it's best to send the equipment that takes the longest to assemble in the first batches. When the last shipment arrives at the new location, the production cycle can be started more quickly.
Few producers managed to retain 100% of their staff: men could join the ranks of the TRO or the Armed Forces, and women could go abroad. Therefore, even with full warehouses of raw materials and properly configured facilities, entrepreneurs will face a shortage of staff. Therefore, the advice from entrepreneurs who had to start from scratch at a new location is to relocate the core team to form a working group and launch the first processes.
Local business associations can help you get back on your feet faster and expand your connections. Their members are interested in the development of the region, so you can negotiate discounts on raw materials, purchase and rental of equipment, placement of products and materials in their warehouses, expansion of the logistics network, temporary outsourcing, and outstaffing of workers.