How to open a bank account in Ukrainian bank?
Every company shall have a bank account. It is must have to make funds to flow through business. In Ukraine all types of legal entities, corporations, companies and NGO have the right to have a current account. Also it is possible to have accounts in foreign currency (dollars, euro, etc). But UAH is always the main one. The account of Ukrainian company has 14 digits and always begins with 2600 (except the accounts of financial, insurance companies that begin with 2650). Account opening process always begins from the notary office, because the sample of signature of CEO (or Director or President) of the company must be certified by the notary. Also notary has to check the fact that the person is really a Director of the company and has the authority to make such legal action. Such data is checked via Ukrainian state register of legal entities, company documents, orders etc. Also certifier shall check the articles of association of the company (so called the law of the company or Statut), because there can be some restrictions for the power of Director. Executive also shall have a passport (translated in Ukrainian if Director is a foreigner) and a Tax Id. It is also possible to make it in a such way that financial documents will be signed by two persons. It can good solution in case if there is a board of directors of the company, so financial transactions are to be made by CEO and financial executive. Consider that if there are persons, that have been registered as individuals that are entitled to make financial transactions of the company, so both signatures are required on all the financial forms. After the notary you can go to the bank and open your current account. Consider also that it is required to show to the bank a structure of owners of the company. So if Ukrainian company is owned by an offshore company it is must have to show the individual (s) that are beneficiary owners of Ukrainian LLC. Usually this is the hardest part. You need to show individuals (natural persons) that are a real owner of the company. Even if there is a dozen of companies between Ukrainian entity and a real owner, still you have to show and to prove each intermediate of ownership. This process can take weeks, even months, because you will have to prove the information with extracts, details and owners of each company. In the case if Ukrainian company is owned by nominee shareholder, it is also a must to provide trust agreement and documents about beneficiary. Consider also that by Ukrainian law beneficiary is a natural person that owns (directly or indirectly) 25 or more % of the company. So it is also possible that the company does not have a majority shareholder.
After you will submit all needed documents and forms to the bank, it takes up to 2 days to check the documents by financial security of the bank. But Privatbank checks the documents during an hour. After the approval, account is to be verified by tax authority of Ukraine (fiscal service) and only after that is being activated. When the current account is opened it is possible to open account in dollars, euro etc.
Ofcourse if you do not have a company, company registration in Ukraine is required
Consider that legislation of Ukraine also does allow a foreign company to have bank accounts. But the process is a difficult one. This is not a popular solution. Also it will take a lot of time to prove each transaction. So better solution is to establish a company or a representative office in Ukraine and to transfer needed amount from parent company.
Can I invoice non-Ukrainian companies from my Ukrainian company?
The answer is Yes. Account in foreign currency is a must have for this. Also you will need to write in invoice all the data for swift transfer (intermediary bank, iban, swift code, etc). Consider that after the transfer will come to account, 50% is always automatically exchanged to Ukrainian hryvnia and transferred to UAH account due to currency regulation rules. The rest 50 % will remain on the currency account and can be exchanged any time by request. Consider that you need to provide to the bank documents on transaction as soon as possible. Such documents are:
- Invoice (is must have document both for services and goods export);
- Agreement (must have if funds are for export of goods and preferable for export of services);
- Customs declaration (must have if funds are for export of goods).
Can I invoice Ukrainian companies from my Ukrainian company?
The answer is Yes. Consider that transactions inside Ukraine (I mean among two accounts opened in Ukraine, regardless the currency) can be proceeded only in national currency of Ukraine. Even If you have EURO on your account, you can not forward such funds to EURO account opened in Ukrainian bank.
What other currency regulations are in Ukraine?
It is not so easy to transfer foreign currency from Ukraine. Always and always you will need to prove the transactions with needed documents. To make a payment for goods or services from Ukrainian company you will have to provide a contract to the bank. To exchange Ukrainian hryvnya to USD (or any other foreign currency) with the aim of money transfer, you will need to provide a contract and other documents that prove a future transaction to the bank. It is always easier to change UAH to foreing currency than conversely.
Also consider that if the company has no revenue in foreign currency it is impossible to get a loan in foreign currency. So to get a mortgage in United States dollars from Ukrainian bank, you need to prove that your company does have an export operations and receives payments from abroad.
In 2018 we expect Parliament of Ukraine to approve a law on currency regulation that shall make financial transactions easier and deragulate this very importaint pocess. Many worldwide financial institutions and organization (including European Bank for Reconstruction and Development do support reforms in Ukraine and particularly in financial sector).
We hope that you will find this information useful and proper for your business in Ukraine.
Author Anatoliy Thor, Managing Partner in Law Firm «Capital Law Consulting»