Investment accounts are a form of current account that can only be used for business purposes. For instance, if you need to invest money or receive profits from business operations, that’s the kind of account you should use.
When you are registering a business in Ukraine, opening an investment account would be one of the requirements. Let's take a peek at how one can open an account and other relevant facts about foreign investment accounts.
REQUIREMENT TO OPEN AN INVESTMENT ACCOUNT IN UKRAINE
Opening an investment account in Ukraine is a simple process that involves only a few documents, which include:
》Tax number
》Valid passport issued overseas
》Ukrainian residence permit
》Application to open the investment account
》A valid Ukrainian address must be given on the application form for an investment account; this is essential for validity purposes when opening an investment account.
How can you use the funds in your foreign currency account?
The Ukrainian government has enacted legislation that requires foreign investment accounts to be monitored while deducting and crediting accounts. These rules govern how people can use the money in their bank accounts.
To buy Ukrainian assets internationally, you may use funds in your foreign account or exchange the foreign currency at a bank rate using the Ukrainian national currency, the Ukrainian hryvnia (UAH). Also, you must pay Ukrainian customs, pay investment profits to an overseas account, or move funds from an investment account to the current Ukrainian account.
Investment account conditions in foreign currency
There are conditions in which one is allowed to receive money into their foreign currency account, some of these include:
▪︎Shifting money for foreign investments in Ukraine from your offshore account.
▪︎Moving money from your Ukrainian current, savings, or investment account.
▪︎Moving sums of money purchased on the interbank foreign exchange market for Ukrainian hryvnia(UAH) accounts.
Furthermore, there are instances where one is not allowed to use their account in foreign currency, and such scenarios include:
▪︎ Payment to Ukrainian customs;
▪︎Return of funds not used for foreign investments in Ukraine to your account abroad.
Investments accounts in UAH(Ukrainian Currency)
Conditions that apply to receive money in one’s Ukrainian (UAH) accounts include:
■ Income made as a product of selling the foreign currency on the interbank currency market;
■ Profit from your Ukrainian investments;
■ Part of the investment amount from Ukraine;
■ Transfers from one’s funds.
Usage of accounts in UAH
▪︎Payment of task to servicing banks.
▪︎Buying foreign currency at interbank rates
▪︎Payments of investments
The Currency Decree provides the general rule that any use of foreign currency on Ukrainian territory, whether as a means of payment or as collateral, is only legal with a permit issued on a case-by-case basis by Ukraine's national bank (NBU). Furthermore, the previous rule would not relate to domestic currency transactions conducted within Ukraine by a Ukrainian commercial bank.
Temporary Restrictions on Currency Transactions
The central bank of Ukraine imposed new controls and rules, resulting in the financial pandemic that happened in 2013. These laws have affected local businesses, residents, and international investors.
Furthermore, the ultimate aim of these regulations is to strengthen the local currency while reducing capital outflows from the country. These, however, also aided in the economy's maintenance and stabilization.
There are two kinds of restrictions: temporary restrictions and restrictions with no definite end date. Temporary regulations are those that the Ukrainian government is considering eventually changing, while those without explicit requirements are long-term restrictions that are unlikely to be revised anytime soon.
Furthermore, every payment made in Ukraine should be done using the country’s currency Ukrainian hryvnia(UAH). However, there are exceptions where transactions can be made using foreign currency, and these include:
▪︎Government sales of foreign investments
▪︎Other banking services done by Ukrainian banks
Interest payment
In the event of an ominous monetary or financial situation in Ukraine, the National Bank of Ukraine (NBU) may prohibit some unfamiliar currency exchanges for a limited period. The NBU imposed those cutoff points on 7 February 2019, which will be withdrawn if Ukraine's overall monetary situation improves.
Non-resident businesses may open current accounts with Ukrainian banks to encourage foreign investments or other transactions in Ukraine. According to the law, non-citizens would have the same rights as nationals when it came to buying foreign currency.
Others
Investors can deposit funds in the currency of their home country for an investment account. Furthermore, the policies and procedures governing the establishment of such actions must be following Ukrainian laws.
CONCLUSION
Finally, foreign investors need to understand Ukrainian investment policies. Both transactions must be complementary and under Ukrainian regulation. It is also important to have the requisite paperwork on hand when opening investment accounts.
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