Currency restrictions and cross-border payments

Key changes implemented:

1. Lifting all currency restrictions for the import of works and services.

This will allow Ukrainian enterprises to freely purchase and transfer foreign currency abroad to import works and services. In addition, the NBU has separately provided businesses with the opportunity to buy foreign currency and transfer funds abroad to pay airport and port fees, fines, and membership fees.

2. Opportunity for businesses to repatriate “new” dividends

Enterprises can repatriate dividends abroad accrued from January 1, 2024. This easing does not apply to the payment of dividends from retained earnings of previous periods or reserve capital.

To minimize risks to macro-financial stability, the NBU has set a monthly limit on repatriating “new” dividends at 1 million euros equivalent. The NBU’s automated information system, “E-limits,” will ensure compliance with this norm.

3. Transfer of funds abroad for leasing/rent payments

Legal entities and individual entrepreneurs will be able to transfer funds abroad for lease/rental payments without additional restrictions, including:

• Lifting the restriction on leasing/rent – now funds can be transferred abroad for leasing/renting any property, not just vehicles, as was previously the case.
• No restrictions on the date of the contract—it does not matter when the lease/rent agreement was concluded. The transfer of funds abroad for its servicing will be allowed.

4. Repayment of “new” external loans.

Simplified conditions for residents to purchase currency for servicing and repaying “new” external loans, the funds of which come in foreign currency from abroad after June 20, 2023, to borrowers’ accounts in Ukrainian banks.

Additionally, the NBU has allowed businesses to purchase foreign currency to pay interest on “new” loans, regardless of the loan usage period.

5. Repayment of interest on “old” external loans

Opportunity for resident borrowers to pay interest on “old” external loans abroad, according to the loan agreement terms, which are payable from February 24, 2022.

For this provision, additional conditions are established:

• Absence of overdue debt under the respective loan agreement as of February 24, 2022;
• Prohibition on purchasing and transferring funds using credits or loans received from residents;
• Early payment or restructuring of overdue payments is not provided for.

6. Transfer of foreign currency from representative offices to their parent companies 

Representative offices of international card payment systems and foreign airlines will be able to purchase and transfer foreign currency abroad to the account of a non-resident legal entity represented by these representative offices in Ukraine.

The NBU has set a limit of 5 million euros per month for such operations per representative office of one company.

Conclusion

These changes are an essential step towards currency liberalization, which aims to improve business conditions, increase Ukraine’s investment attractiveness, and ensure the stability of the national currency. This is expected to lead to a favorable environment for Ukrainian businesses, stimulate economic recovery, and attract investments.

Adaptation to the changes introduced by the NBU Board Resolution dated May 3, 2024, No. 56, requires:

1. Thorough planning and implementation of new approaches to managing currency operations.
2. Ensuring that all currency transactions are conducted in accordance with the law.
3. Monitoring new changes in legislation and NBU resolutions.