Internal outstaffing: when a spin-off works and when shared services do

A company grows to the point where accounting, HR, IT and transport live a life of their own, and the CEO spends half the day on people who do not produce the product. Two tools solve this differently: a spin-off builds a separate company that eventually finds its own clients, shared services build an internal centre that serves only the group.

• Spin-off — moving a function into a separate legal entity, often with the ambition of selling it on the open market. Shared services — an internal service centre working only for group companies.
• In Ukrainian practice this is almost never a formal reorganisation. It is simply a new LLC incorporated by the same owner (or even by employees of the existing business), followed by a transfer of assets, staff and the function itself.
• The legal link between the old and the new company rests on contracts (services, lease, sale of assets) and on employment transfers — although a prior spin-out of a legal entity is also possible.
• Globally, shared services are an established industry known as Global Business Services (GBS). Deloitte's 2025 survey shows centres moving from routine transactional work towards strategic business support.
• The reality test is the same as for outsourcing: does the new company have its own management, its own assets and — for a spin-off — third-party clients?
• Giving the new company the right to work with third parties from day one both strengthens its independence and opens the path from shared services to a full spin-off.

The request is always the same: management no longer wants — or no longer has time — to run production and accounting, legal, logistics and security at once. Someone else has to own those functions, with their own manager, their own KPIs and their own budget. The only question is where to put them: into a company that will also go to market, or into a company that will serve the group only.

A spin-off means incorporating a new legal entity around a specific function, expecting it to eventually sell that function not only to the parent but to outside customers. A classic example: a steel structures manufacturer moves its drivers into a separate transport company, and its lawyers and accountants into a legal-and-accounting firm. At first 100% of the new company's revenue comes from the parent — but the goal is for other clients to appear.

Formal reorganisation procedures (spin-out, division) are almost never used. They are cumbersome and are really meant for complex corporate transformations or for resolving tax problems. Instead the owners register a new LLC — often with the same or a related set of founders — and fill it with three things: assets, people and the function.

• Assets move by contract: sale, contribution to the new company's charter capital, lease (for vehicles and equipment), or simply buying new property directly in the new company where finances allow.
• People move through ordinary HR procedures: transfer to another employer with the employee's consent, or dismissal by way of transfer followed by hiring into the new company.
• The function is documented by a services agreement (Chapter 63 of the Civil Code), a carriage agreement (Chapter 64) or other contracts between the old and the new company. These contracts become the day-to-day legal backbone of the relationship.

The new company's right to work with third parties should be built in from the start: in the registered activity codes, in the business plan and in real first attempts to find outside clients, however small. This is not a formality — an actual (or at least actively pursued) external client is the main evidence that the tax and labour inspectorates are looking at a real business, not a façade.

Shared services (Global Business Services, GBS) is a similar but different tool. The goal is not to build a new business but to centralise routine: one centre processes invoices, keeps the books, supports IT and handles HR requests for all group companies at once — instead of every entity maintaining its own duplicate department.

The key difference from a spin-off: shared services do not claim the external market. The centre serves only its own group, which makes it both the most useful (process standardisation, economies of scale) and the most legally vulnerable option: without third-party clients it is hardest to prove this is a real business rather than an artificial pocket for shifting costs or staff.

In Ukraine shared services are set up just as simply as a spin-off: a new LLC, staff transferred, assets transferred or purchased separately. Legally, intra-group relations rest on the same set of services agreements. The difference is not in legal form but in economic substance — and therefore in what you will use to prove the centre's independence during an audit.

Shared services are not a Ukrainian invention but a global industry with decades of practice. Deloitte has run its Global Business Services Survey since 1999. Its 2025 edition, covering executives in more than 30 countries, shows GBS models becoming more flexible, digital and cost-efficient, while Global Capability Centers play a growing role in meeting specialised talent needs rather than merely executing routine operations.

A telling trend: shared services are no longer pure back office. According to SSON's 2026 industry report, 52% of organisations are already shifting from transactional back-office work to core business support (up from 48% in 2025), another 34% are actively considering it, and only 14% say the evolution is not on their agenda. A modern shared services centre is increasingly a hub for analytics, strategic planning or even R&D support.

Geography matters too. India remains the main hub for advanced GBS functions: roughly 50% of organisations prioritising advanced capabilities run their centres there. At the same time the industry faces the classic low-cost-jurisdiction risk — wage inflation. India's BPO sector projected 9.7% salary growth in 2025 after 9.5% in 2024, steadily eroding the initial cost advantage. Shared services are not a one-off saving but an operating model that has to be re-evaluated continuously.

Legally, Western spin-offs and shared services are documented much as they are in Ukraine: a separate entity plus intercompany service agreements. The key difference is far stricter and more consistent scrutiny of transfer pricing between related parties under the arm's length principle — the same principle that underpins Ukrainian transfer pricing rules.