The National Bank of Ukraine allows for the pay-out of dividends to foreign investors and eases a range of currency control regulations.

Following last month's developments, the National Bank of Ukraine in Decree #342 on 8 June 2016 gave the green light for the following:

  • A reduced threshold for the mandatory sale of foreign currency; now 65% from 75%
  • Dividends payable for year 2014-2015 to be paid to foreign investors abroad.

This is obviously very welcome news for foreign investors, local entities and Ukrainian nationals. The positive commodities price trend and increasing flow of foreign currency into the Ukrainian economy has allowed the National Bank to gradually lift restrictions put in place two years ago, to address the economic crisis.

Pay-outs to foreign investors are possible from Monday 13 June 2016. They are limited to either of the following upper amounts (whichever is higher):

  • equivalent of USD 1m per month or
  • 10% of the total dividends payable, but not more than the equivalent of USD 5m per month.

A company can purchase/transfer foreign currency for the purpose of cross border dividend repayment via a single authorised bank (chosen by the company). A change of authorised bank may be allowed with the relevant official letter.

Other allowances

  • Unlimited withdrawals of cash in local currency at the cash desks (previously the upper limit was UAH 500K per customer per day).
  • The limit for withdrawal of cash in foreign currency from current or deposit accounts has been doubled to the equivalent of UAH 100K per customer per day (previously a limit of UAH 50K).
  • The upper limit for the sale of foreign currency to individuals is doubled from the previous UAH 6K, to the equivalent of UAH 12K per customer per day.

The rules introduced in this latest decree remain valid until 14 September 2016. At this point the National Bank shall either confirm the existing rules, or introduce new regulations with in a 15 September 2016 decree.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.