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Ukraine: Purchase of foreign currency liberalized for business

16/ 07/ 2021
  In brief The National Bank of Ukraine (NBU) has made yet another relaxation of its foreign exchange regulations and eased restrictions concerning the purchase of foreign currency by local businesses (companies and individual entrepreneurs). Starting from 20 July 2021, Ukrainian businesses will be allowed to purchase foreign currency up to the amount equivalent to EUR 100,000 per day without having to justify such purchase by contractual obligations and submit supporting documents to their account banks. In more detail Until recently, only foreign currency purchases by businesses for amounts not exceeding the equivalent of UAH 400,000 (c. USD 14,630) were exempt from the requirement of justification by the purchasers contractual obligations and the provision of supporting documents. In addition, the purchased foreign currency was subject to the mandatory transfer requirement obliging companies to use (transfer) foreign currency within 10 business days after its purchase. With new regulations coming into force, companies will be able to use foreign currency purchased within the above-discussed EUR 100,000 daily limit for their business purposes without having to justify such purchase, and the mandatory transfer requirement will not apply to such purchased foreign currency. At the same time, for most transfers of foreign currency from Ukraine abroad (including foreign currency purchased within the aforementioned limit), Ukrainian companies will still be required to justify such transfers by contractual obligations and to provide relevant supporting documents to banks. In addition, cross-border transfers of foreign currency purchased within the aforementioned limit for the purpose of investing abroad, making loans to foreign borrowers or allocating funds on foreign bank accounts will still be limited by the statutory cumulative cap of EUR 2 million per calendar year. The NBU intends to lift the requirement for justification of foreign currency purchases gradually, subject to the healthy condition of the financial sector. For further information and to discuss what this development might mean for you, please get in touch with your usual Baker McKenzie contacts.  

In brief

The National Bank of Ukraine (NBU) has made yet another relaxation of its foreign exchange regulations and eased restrictions concerning the purchase of foreign currency by local businesses (companies and individual entrepreneurs).

Starting from 20 July 2021, Ukrainian businesses will be allowed to purchase foreign currency up to the amount equivalent to EUR 100,000 per day without having to justify such purchase by contractual obligations and submit supporting documents to their account banks.

In more detail

  • Until recently, only foreign currency purchases by businesses for amounts not exceeding the equivalent of UAH 400,000 (c. USD 14,630) were exempt from the requirement of justification by the purchaser’s contractual obligations and the provision of supporting documents. In addition, the purchased foreign currency was subject to the mandatory transfer requirement obliging companies to use (transfer) foreign currency within 10 business days after its purchase.
  • With new regulations coming into force, companies will be able to use foreign currency purchased within the above-discussed EUR 100,000 daily limit for their business purposes without having to justify such purchase, and the mandatory transfer requirement will not apply to such purchased foreign currency.
  • At the same time, for most transfers of foreign currency from Ukraine abroad (including foreign currency purchased within the aforementioned limit), Ukrainian companies will still be required to justify such transfers by contractual obligations and to provide relevant supporting documents to banks.
  • In addition, cross-border transfers of foreign currency purchased within the aforementioned limit for the purpose of investing abroad, making loans to foreign borrowers or allocating funds on foreign bank accounts will still be limited by the statutory cumulative cap of EUR 2 million per calendar year.
  • The NBU intends to lift the requirement for justification of foreign currency purchases gradually, subject to the healthy condition of the financial sector.

For further information and to discuss what this development might mean for you, please get in touch with your usual Baker McKenzie contacts.

 

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