National Bank eases forex restrictions for businesses

This was reported by the NBU press service, Ukrinform saw.

"The National Bank of Ukraine is implementing the largest package of forex restriction eases for enterprises since the full-scale invasion. The purpose of these changes is to improve the conditions for doing business in Ukraine and to help domestic businesses enter new markets, as well as support the recovery of the economy and promote the inflow of new investments into the country," the statement reads.

It is emphasized that the changes will apply to several areas.

First, all currency restrictions for the import of works and services, for the payment of airport and port fees, fines, and membership fees are abolished. Such changes will support Ukrainian producers and provide an opportunity for domestic businesses to enter new markets, including those from which the producers of the aggressor state are displaced due to sanctions.

Secondly, the opportunity is ensured for businesses to repatriate dividends on corporate rights or shares abroad, accrued based on operations for the period starting from January 1, 2024.

Thirdly, it is now possible to transfer funds abroad under lease/rent agreements. Legal entities and sole proprietorships will be able to transfer funds abroad for settlements under lease/rent agreements without additional restrictions regarding the subject of the deal, as well as the date of conclusion of the agreement. Previously, such permission was only applicable to the lease/rent of vehicles.

Fourth, the NBU simplified conditions for the purchase of foreign currency by residents in order to service and repay "new" external loans, the funds for which were received in foreign currency from abroad after June 20, 2023, to the accounts of borrowers in Ukrainian banks. In addition, the NBU will enable businesses to buy foreign currency to pay interest on "new" loans, regardless of the term of the loan.

Fifth, it is now possible to repay interest on "old" foreign loans. Resident borrowers will be able to transfer funds abroad to pay interest payments on "old" external loans, which, according to the terms of the credit agreement, are due from February 24, 2022.

Sixth, restrictions are eased on the transfer of foreign currency from representative offices to the benefit of their parent companies. The monthly cap for such transactions (by one representative office of one company) is set at a EUR 5 million equivalent.

The regulator emphasizes that all the mentioned changes are being introduced in view of the formation of the necessary prerequisites and should not create additional risks for macro-financial stability and the stability of the forex market.

The vast majority of changes take effect from May 4. The option of repatriating "new" dividends will be enforced on May 13.

As reported, from June 21, 2023, the NBU provided residents with the opportunity to make transfers abroad to service and pay new external loans, the funds for which will be received from abroad after June 20, 2023, to the borrowers' accounts in Ukrainian banks.