Starting from 25 February 2017, the National Bank of Ukraine
(the "NBU") allows Ukrainian individuals
(except for those registered as self-employed persons):
to keep any FX funds originated outside of Ukraine (for
example, royalties, dividends, salaries, payment for services,
etc.) in their personal foreign accounts; and
to invest such FX funds outside of Ukraine,
without obtaining an individual licence from the NBU.
Ukrainian individuals are still required to obtain an individual
licence from the NBU in order to transfer any FX funds from Ukraine
abroad, including for making any investments.
It has also been expressly stated that Ukrainian individuals are
required to declare income and pay taxes in Ukraine on all foreign
transactions in accordance with applicable laws.
It is not yet clear, however, how the NBU would verify the
origin of funds in existing foreign accounts of Ukrainian
individuals and how such accounts and/or any funds in there should
be declared. In any event, some coordination and information
exchange between the NBU and Ukrainian tax authorities is likely to
be established. We expect to see some clarifications or additional
rules from the regulator in that regard.
The new rules set by the NBU may significantly affect the
existing framework of cross-border activities by Ukrainians, as
they create a number of opportunities for Ukrainian individuals who
have foreign proceeds, which have not been easily available before,
including in particular:
stock option plans, including any types of ESOPs ordinarily
offered by multinational companies having employees in
establishing foreign companies;
trading on foreign stock exchanges; and
acquiring shares, securities or making other investments
Investing in Ukraine
Furthermore, in order to attract more foreign investors to the
upcoming privatisation of large Ukrainian state-owned companies,
the NBU has exempted from the mandatory sale/conversion to UAH
foreign currency funds transferred by non-residents to Ukraine as
cash collateral (i.e. deposit guarantee, pledge or advance payment)
in the course of auctions or tenders.
Ukraine currently works to abolish most of the existing FX
limitations and move to a free market economy. This NBU resolution
is a part of the ongoing FX liberalisation framework programme to
be implemented by the NBU and the Ukrainian government during the
next couple of years.
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.
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The implementation of the mandatory exchange of initial and
variation margin for non-cleared OTC derivative trades in the EU
commenced on 4 February for financial counterparties with the
largest derivatives portfolios.
Nevertheless, a RAIF's investment policy is subject to certain risk diversification requirements laid down by the CSSF.
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