Currency control in Ukraine for investors
Foreign investors can finance Ukrainian companies and repatriate dividends during martial law, but each cross-border currency payment must be checked against the current rules of the National Bank of Ukraine. The practical default has changed: a bank will process only a payment type that is expressly permitted or covered by a special limit. Before a new transaction is initiated, the company should classify the payment, verify the applicable limit, and prepare the bank-compliance file.
This overview is intended for foreign investors, companies with Ukrainian subsidiaries, and the finance and legal teams that structure cross-border payments or financing arrangements under martial law.
1. Legal framework for wartime FX restrictions
2. Transaction map: permitted, conditional and prohibited payments
3. Dividends: eligibility conditions and new limits
4. Loans from non-residents: old and new obligations
5. Three ways to finance a Ukrainian subsidiary
6. What the bank checks
7. Preparing a payment: action sequence
Frequently asked questions
How DLF can help
For such transactions, the general principle of currency freedom is only one part of the analysis. The practical outcome also depends on current wartime restrictions, bank compliance, tax rules, and the documentary evidence supporting the business purpose of the payment.
1. Legal framework for wartime FX restrictions
The Law of Ukraine on Currency and Currency Transactions, which entered into force in February 2019, introduced the principle of freedom of currency transactions: everything not expressly prohibited is permitted. Residents and non-residents obtained the right to conduct currency transactions, open accounts with foreign financial institutions, and perform obligations denominated in foreign currency without prior individual approval from the regulator.
After martial law was imposed on 24 February 2022, the practical operating rule changed. NBU Board Resolution No. 18 established a special regime for the banking system and the currency market. For cross-border transfers, this means that a payment is generally not processed unless the relevant transaction type is included in the permitted list or falls within a specific exception.
A separate control layer operates at the servicing bank. The bank checks not only the formal currency basis, but also the client, ultimate beneficial owners, source of funds, sanctions risks, business purpose, and supporting documents. A formally permitted payment can therefore still be held or refused if the compliance file is insufficient.
Practical conclusion: Whether a payment is permitted cannot be determined solely from the general currency law. The decisive factors are the current wartime FX measures of the NBU and the bank’s compliance assessment.
2. Transaction map: permitted, conditional and prohibited payments
Payments to non-residents can be divided into three groups: payments without special FX restrictions, payments subject to conditions or limits, and payments that remain expressly prohibited or materially restricted.
Payments generally allowed without special FX restrictions are usually possible if the underlying transaction arose after 23 February 2021:
- payments for imported goods and services, including contractual penalties and bonuses;
- leasing and rental payments;
- royalties and other payments for the use of intellectual property;
- salary payments to non-residents for work performed in Ukraine;
- funding of foreign branches and representative offices up to EUR 1 million per year for companies that have operated for at least 12 months.
Payments requiring conditions and documentation include:
- dividend repatriation to non-residents, subject to monetary caps and investor-holding conditions;
- servicing of loans from non-residents, where the rules depend on the date the funds were actually received in Ukraine;
- management, consulting and marketing fees to non-residents, where the services were provided after 23 February 2021 and supported by evidence of substance, arm’s-length pricing and business purpose.
Related article: Service contracts with Ukrainian contractors: 5 legal and tax risks for foreign companies
Payments that remain prohibited or materially restricted include:
- repatriation of charter capital as a return of invested funds to the investor;
- transfer of proceeds from an asset sale to a domestic buyer to the foreign account of the non-resident seller, unless a specific permitted exception applies;
- transfers in favour of residents of the Russian Federation or the Republic of Belarus.
3. Dividends: eligibility conditions and new limits
The National Bank has gradually reopened dividend repatriation. From May 2024, it covered profits earned from 1 January 2024, and from August 2025 the NBU allowed the repatriation of 2023 dividends within the general monthly cap. Dividends attributable to profits earned before 1 January 2023 remain frozen unless a separate permitted mechanism applies.
For a transfer to proceed, the following conditions should be satisfied simultaneously:
- the profit relates to the company’s activity that started no earlier than 1 January 2023;
- the issuing company has been registered and operating for at least 12 months;
- the foreign investor has held the corporate rights for at least 6 months before the transfer date;
- the payment does not exceed the equivalent of EUR 1 million per month per issuer, unless a special limit applies;
- funds are transferred directly to the investor’s foreign account or through the Central Securities Depository.
Before payment, the issuing company withholds non-resident income tax at the standard rate of 15% under the Tax Code of Ukraine. The rate may be reduced under an applicable double taxation treaty if the non-resident provides a tax residency certificate and evidence of beneficial ownership before payment.
For investors contributing new equity to the charter capital of a Ukrainian company after 12 May 2025, the incentivising FX liberalisation mechanism may create an investment limit. Within that limit, certain payments, including dividends, may be made above the standard cap.
Practical conclusion: Before dividend repatriation, the company should check the profit period, holding period, available limit, treaty position, and the bank documentation package.
4. Loans from non-residents: old and new obligations
The key date for wartime FX regulation of loans is 20 June 2023. Repayment rules differ depending on when the funds were actually credited to the Ukrainian borrower’s account.
| Criterion | “Old” loan (before 20 June 2023) | “New” loan (from 20 June 2023) |
| Principal repayment | Prohibited as a general rule, except for specific exceptions or limits | Permitted: in the first year with the borrower’s own FX; from the second year also with purchased FX |
| Interest payments | Permitted if no payment default existed as of 24 February 2022 | Permitted subject to a 12% p.a. rate cap |
| Early repayment | Not available as a standard mechanism | Prohibited |
| NBU registration | Not required; the bank collects loan information | Not required; the bank collects loan information |
Since 14 January 2026, a loan limit has been available. It is formed by foreign-currency funds received under a new loan from a non-resident and credited to the company’s account with a Ukrainian bank after 1 January 2026. Within this limit, certain previously frozen payments may be made, including repayment of “old” external loans and interest.
Related-party loans are also subject to tax limitations. Where aggregate indebtedness to related non-residents exceeds equity by more than 3.5 times, deductible interest expense is capped at 30% of taxable EBITDA. Unused amounts may be carried forward but are reduced by 5% annually.
Practical conclusion: A new loan is generally more flexible than an old debt obligation. Where pre-war non-resident debt must be repaid, the company should analyse whether new external financing can create a workable loan limit.
5. Three ways to finance a Ukrainian subsidiary
A foreign investor may finance a Ukrainian company in several forms. Each has different currency, corporate and tax consequences.
| Instrument | What it achieves | Key considerations |
| Charter capital increase | Long-term financing; after 12 May 2025 it may create an investment limit | Corporate resolution, amendments and registration steps are required; capital return is currently restricted |
| Intercompany loan | Flexible short- or medium-term financing; principal and interest may be repaid under NBU rules | 12% p.a. rate cap; 15% WHT on interest unless reduced by treaty; thin capitalisation rules apply |
| Financial assistance | Quick funding without a complex corporate procedure | Repayable assistance is subject to FX restrictions on repayment; non-repayable assistance is taxed as company income at 18% |
The choice depends on the financing horizon, the investor’s exit strategy, and the Ukrainian company’s ability to service debt. For companies planning future dividend repatriation, a charter capital contribution can be useful because it may create an investment limit.
6. What the bank checks
Each cross-border payment passes through several levels of bank review. In practice, formal permission under FX rules does not guarantee automatic processing.
- KYC and UBO disclosure. The bank checks the client, ownership structure and ultimate beneficial owners. Any UBO link to Russia or Belarus may be grounds for refusal.
- Sanctions screening. The payment is checked against Ukrainian, EU, UN, OFAC and other relevant sanctions lists.
- AML review. The bank assesses suspicious-activity indicators and, where required, reports to the State Financial Monitoring Service.
- Business purpose. The bank assesses whether the payment has a clear commercial rationale and documentary support.
- FX-rules compliance. The bank checks whether the transaction type is permitted and whether monetary limits are respected.
- Source of funds. For larger or unusual transactions, the bank may request evidence of the lawful origin of funds.
Intra-group payments require particular attention: management, consulting and marketing fees, as well as royalties. Banks typically expect the agreement, acceptance acts, reports, evidence that the services were actually provided, and an explanation of arm’s-length pricing.
7. Preparing a payment: action sequence
Before submitting a payment instruction, the company should work through a short internal checklist.
- Identify the transaction type: dividends, loan principal, interest, service fee, royalties or another payment.
- Check whether this transaction type is permitted under the current NBU rules.
- Determine the applicable monetary cap, such as EUR 1 million per month for dividends or EUR 1 million per year for funding foreign standalone units.
- Assess whether an investment limit or loan limit is available.
- Prepare corporate documents: shareholders’ resolution, loan agreement, service agreement, acceptance acts, reports or other evidence.
- Prepare KYC and UBO documentation: ownership structure, ultimate-beneficiary information and confirmation that no prohibited links exist.
- Prepare tax documents for treaty relief: tax residency certificate and confirmation of beneficial ownership.
- Agree the document package in advance with the servicing bank’s compliance team.
Frequently asked questions
Can dividends earned in 2022 be repatriated?
No. As a general rule, dividends attributable to profits earned before 1 January 2023 remain frozen. Repatriation would require a further relaxation of FX restrictions or a separate permitted mechanism.
Can a parent-company loan extended before February 2022 be repaid?
As a general rule, principal under a loan received before 20 June 2023 cannot be repaid. An exception may include the use of a loan limit created by new non-resident financing, or a structure involving a multilateral financial institution or a foreign bank with an appropriate rating.
What is the withholding tax rate on dividends and how can it be reduced?
The standard rate is 15% of the payment amount. It may be reduced under an applicable double taxation treaty if the non-resident provides a tax residency certificate and evidence of beneficial ownership before payment.
What is the difference between a loan and a charter capital contribution?
A new loan creates a debt obligation for principal and interest. A charter capital contribution does not create debt, but capital return is currently restricted; at the same time, a contribution made after 12 May 2025 may create an investment limit.
Can a bank decline a payment that is formally permitted?
Yes. A bank may refuse a payment if it conflicts with internal compliance policy or if there are concerns about the purpose of the payment, source of funds or ultimate beneficiary.
What is business purpose in a bank review?
Business purpose is the clear commercial reason for a transaction. If it is not evident, for example in a management fee paid to a related party without service evidence, the bank may request explanations or refuse the payment.
How DLF can help
DLF attorneys-at-law assists foreign investors and Ukrainian companies with currency-control analysis, financing structures, bank compliance, dividend distributions, contracts with non-residents, and the application of double taxation treaties. Through its Corporate Law / M&A and Tax Law practices, DLF helps select the appropriate financing instrument, prepare the bank documentation package, and assess the tax consequences of cross-border payments.
Iurii Dynys, counsel, attorney-at-law — DLF attorneys-at-law
This material is for general information purposes only. The application of the approaches described depends on the circumstances of each specific situation and requires a separate legal assessment.