If You Do Not Look Out For Your Future, Who Will?

10/ 09/ 2018

Oleksandr Onufrienko. Partner of private client practice at Asters law firm, PhD in Law, 25 years of professional legal experience You should not only dream about your future, but also prepare for it. Laying a financial basis is an important component of this future. This depends not only on how much you earn, but also, to a large extent, on how you invest and, which is even more importantly, how your earnings are registered. This concerns not only wealthy businesspersons, but also middle-sized entrepreneurs and successful managers. This is weird, but they face the same legal issues although their capitals are different. A foreign bank account today It is no secret that many Ukrainian entrepreneurs and managers perceive a balance in their own foreign bank accounts as one of the most important drivers of their security. It is also common knowledge that previously such accounts were opened with institutions that offered the easiest and cheapest conditions for that. Accordingly, that approach resulted in such accounts being blocked and closed. Entirely different rules apply today. Accounts are now opened only if Ukrainian nationals can documentarily prove the legitimate origin of their funds and provide substantiation for opening an account in a given country. It is recommended that you consult an expert prior to attempting to open an account. That expert advice will at least help you to get insight into what documents should be prepared and how much time the account opening will take (forget about few days — the procedure now takes from weeks to months). Please be especially aware that an account must be opened in compliance with not only the legislation of the country where it is expected to be opened, but also the laws of Ukraine (new currency control law considerably facilitates those procedures). Also, please note that the term information covered by bank secrecy rules underwent major changes these recent years and you should keep this in mind. If your foreign bank account is blocked (closed) in spite of everything Only right communication with a foreign financial institution and submission of properly executed documents may help you resolve that and other problems and avoid the closing of your account. Before challenging officers of the bank, you should find the formal cause for your account being blocked. Generally, providing a bank with some properly executed documents is sufficient to release the block. Quite the opposite, arbitrary disputes and unreasoned attempts to make your point could have much more serious consequences. Personal investments as a way to secure your future During our career, we make different investments from purchasing real estate and securities to making deposits with private pension funds. Further, sometimes we take loans from, or act as sureties for other persons before, financial institutions. However, relevant documents should clearly specify the beneficiary party and the obligor party in respect of obligations incurred by a spouse, failing which the other spouse could get an unpleasant surprise. Today, court institutions try a large number of cases in which financial institutions claim their loans back from one of the spouses who was completely ignorant of being a defendant in respect of a loan or surety, or, in certain cases, did not even know that a loan agreement was executed. You can easily avoid such situations by seeking expert advice before the execution of any financial instrument. Marriage contract A marriage contract is no longer an exotic rarity but a compelling need if one has reasonably valuable assets or money before or after marriage. A properly drafted marriage contract will not only help you avoid expensive and long divorce proceedings, but also will help the married couple when opening foreign bank accounts and/or making foreign investments. You have made it in your career with becoming a senior executive However, reaching the top is not about only high salaries and bonuses, but also about a huge load of responsibility, including financial liability. Recently passed legislation allows a corporation to recover losses incurred from a certain category of senior executives if it has been proven that such losses were caused through a senior executives fault. Those issues should be clearly spelled out in your employment contract and marriage contract (to avoid your familys property being foreclosed). You can easily ensure that your personal savings and the results of investments are used in a predictable way. To achieve this, it will be sufficient to know aspects that require primary attention, and, what is of the utmost importance, to understand, when entering into certain property/financial relations, not only what revenues you will earn if you succeed, but also negative consequences that may arise if you fail. That awareness will safeguard you, your family and personal assets from another thing coming.

Oleksandr Onufrienko

Partner of private client practice at Asters law firm, PhD in Law, 25 years of professional legal experience

You should not only dream about your future, but also prepare for it. Laying a financial basis is an important component of this future. This depends not only on how much you earn, but also, to a large extent, on how you invest and, which is even more importantly, how your earnings are registered. This concerns not only wealthy businesspersons, but also middle-sized entrepreneurs and successful managers. This is weird, but they face the same legal issues although their capitals are different.

A foreign bank account today

It is no secret that many Ukrainian entrepreneurs and managers perceive a balance in their own foreign bank accounts as one of the most important drivers of their security. It is also common knowledge that previously such accounts were opened with institutions that offered the easiest and cheapest conditions for that. Accordingly, that approach resulted in such accounts being blocked and closed. Entirely different rules apply today. Accounts are now opened only if Ukrainian nationals can documentarily prove the legitimate origin of their funds and provide substantiation for opening an account in a given country. It is recommended that you consult an expert prior to attempting to open an account. That expert advice will at least help you to get insight into what documents should be prepared and how much time the account opening will take (forget about few days — the procedure now takes from weeks to months). Please be especially aware that an account must be opened in compliance with not only the legislation of the country where it is expected to be opened, but also the laws of Ukraine (new currency control law considerably facilitates those procedures). Also, please note that the term ‘information covered by bank secrecy rules’ underwent major changes these recent years and you should keep this in mind.

If your foreign bank account is blocked (closed) in spite of everything

Only right communication with a foreign financial institution and submission of properly executed documents may help you resolve that and other problems and avoid the closing of your account. Before challenging officers of the bank, you should find the formal cause for your account being blocked. Generally, providing a bank with some properly executed documents is sufficient to release the block. Quite the opposite, arbitrary disputes and unreasoned attempts to make your point could have much more serious consequences.

Personal investments as a way to secure your future

During our career, we make different investments from purchasing real estate and securities to making deposits with private pension funds. Further, sometimes we take loans from, or act as sureties for other persons before, financial institutions. However, relevant documents should clearly specify the beneficiary party and the obligor party in respect of obligations incurred by a spouse, failing which the other spouse could get an unpleasant surprise. Today, court institutions try a large number of cases in which financial institutions claim their loans back from one of the spouses who was completely ignorant of being a defendant in respect of a loan or surety, or, in certain cases, did not even know that a loan agreement was executed. You can easily avoid such situations by seeking expert advice before the execution of any financial instrument.

Marriage contract

A marriage contract is no longer an exotic rarity but a compelling need if one has reasonably valuable assets or money before or after marriage. A properly drafted marriage contract will not only help you avoid expensive and long divorce proceedings, but also will help the married couple when opening foreign bank accounts and/or making foreign investments.

You have made it in your career with becoming a senior executive

However, reaching the top is not about only high salaries and bonuses, but also about a huge load of responsibility, including financial liability. Recently passed legislation allows a corporation to recover losses incurred from a certain category of senior executives if it has been proven that such losses were caused through a senior executive’s fault. Those issues should be clearly spelled out in your employment contract and marriage contract (to avoid your family’s property being foreclosed).

You can easily ensure that your personal savings and the results of investments are used in a predictable way. To achieve this, it will be sufficient to know aspects that require primary attention, and, what is of the utmost importance, to understand, when entering into certain property/financial relations, not only what revenues you will earn if you succeed, but also negative consequences that may arise if you fail. That awareness will safeguard you, your family and personal assets from another thing coming.