Agent, distributor, branch or subsidiary

A company wanting to sell in Ukraine has four basic structures available. They are frequently chosen on the basis of what someone did last time rather than on what fits.

Agent

Someone who finds customers and earns commission; the contract is between you and the customer. Cheapest and fastest. You keep the customer relationship and the credit risk, and you carry the compliance obligations because you are the seller.

Suitable for testing a market, for a small number of large transactions, and for products requiring your own technical involvement anyway.

Distributor

Buys from you and resells on their own account. You get a single customer, predictable volumes and no local credit exposure. You lose visibility of the end market, control of pricing and, over time, the relationship with your own customers.

Suitable for volume products with straightforward specification. Dangerous if you intend to build a brand and the distributor becomes the brand instead.

Branch

Your own presence, not a separate legal person. The parent is directly liable for what it does. Registration and reporting obligations are real, and the tax treatment is often less favourable than a subsidiary.

Subsidiary

A Ukrainian company you own. Separate legal personality, liability contained, able to contract, employ, hold licences and bid for public tenders — which agents and distributors often cannot do on your behalf.

Most expensive to set up and maintain, and the only structure that works if you intend to be here for a decade.

How to choose

Ask what you will need in year three, not year one. Converting an agency into a subsidiary later means renegotiating with someone who now has your customer list, and the termination provisions of the original contract will matter a great deal more than they seemed to at signature.

The choice among these four is about control more than cost, and the price of choosing wrongly appears years later. In my own business I have never used a branch: the liability stays attached to the parent and the flexibility does not. The question to ask when deciding is who the customer wants to contract with — you, or a legal person established here.