Despite wartime challenges, Ukrainian legislation continues to form an open and relatively flexible environment for attracting investments. It recognizes a wide range of investment forms and mechanisms for returning capital abroad. This article reviews the current currency regulation regimes applicable to key investment instruments, including:

• external loans;

• investments in share capital (including dividend payments and repatriation);

• disposal of capital and other assets.

After the introduction of martial law in 2022, the National Bank of Ukraine (NBU) imposed strict currency restrictions and strengthened control over capital movements. The basic principle remains unchanged: all cross-border currency transactions are prohibited unless expressly permitted by the regulator.

At the same time, over the past three years the NBU has been gradually liberalizing currency restrictions. As a result, foreign investors now have a number of options for structuring investments and legally withdrawing profits from Ukraine.

1. SERVICING OF EXTERNAL LOANS

External loans remain one of the most accessible and flexible instruments for foreign investors:

• No licensing requirements for lenders — loans to Ukrainian borrowers may be provided by foreign banks, funds, or corporations without registration or obtaining any licenses in Ukraine.

• Currency flexibility — loans are typically denominated in convertible currencies (US dollars or euros), which helps protect both parties from hryvnia exchange rate fluctuations.

However, due to martial law, strict currency restrictions have been introduced in Ukraine. These restrictions directly affect the ability of Ukrainian borrowers to service external debt.

Permitted payments include:

Loans received after June 20, 2023

• Full repayment of loans is allowed.

• Loans must meet certain conditions (see below).

Loans received before June 20, 2023

• Only interest payments are permitted, subject to additional conditions.

• Repayment of principal remains prohibited.

Loans from international financial institutions and certain special creditors

Repayment of loans provided by international financial institutions such as the EBRD or IFC (“IFIs”), foreign export credit agencies, or foreign states (directly or indirectly through state-owned companies or banks) is permitted.

Conditions for repayment of loans received after June 20, 2023:

• Interest rate cap: a maximum of 12% per annum, including interest, fees, commissions, and other charges (excluding principal and transfer fees).

• Use of foreign currency: during the first year of the loan, the principal must be repaid using the borrower’s own foreign currency (not borrowed or purchased on the market).

• Interest servicing: interest, commissions, and fees may be paid using newly purchased foreign currency.

• Early repayment: currently prohibited.

Preferential regime: loans from IFIs, foreign export credit agencies, and foreign states are not subject to the 12% interest rate cap. For their repayment, borrowers may freely purchase foreign currency and make both interest payments and principal repayments.

Security for External Loans

Ukrainian law allows the use of a wide range of security instruments to secure obligations under external loans. The most common include:

• pledge of movable property (equipment, inventory, receivables, bank accounts);

• mortgage of immovable property;

• pledge of corporate rights (shares of Ukrainian companies or equity interests);

• guarantees and sureties.

From the perspective of currency restrictions under Resolution No. 18:

• Payments under guarantees/sureties (e.g., when a guarantor pays a foreign lender) are allowed only if the secured loan qualifies as “permitted” under Resolution No. 18.

• Proceeds from enforcement: if a foreign lender enforces a pledge or mortgage in Ukraine, the proceeds obtained cannot be repatriated abroad. Typically, the investor may use such funds within Ukraine, but their transfer abroad is prohibited under Resolution No. 18.

2. DIVIDEND PAYMENTS

Foreign investors can generally freely invest capital and acquire corporate rights in Ukrainian companies. However, restrictions arise at the stage of income repatriation.

Dividend payments to non-residents are permitted provided all of the following conditions are met:

Source of Profits

Only dividends accrued from profits earned starting January 1, 2023 may be repatriated. Previously accumulated undistributed profits must remain in Ukraine.

Operating History

The Ukrainian company must have existed for at least 12 months before paying dividends abroad.

Holding Period

The foreign shareholder must have held its stake in the share capital for at least 6 months prior to repatriation.

Repatriation Limit

The monthly limit for transferring funds abroad is EUR 1 million (or the equivalent in another currency) per legal entity.

Payment Mechanism

Dividends must be transferred directly to the foreign account of the non-resident or through the depository system. Transfers to an account in a Ukrainian bank with subsequent transfer abroad are not permitted.

These rules mean that dividend repatriation is possible, but only in limited amounts and only with respect to new profits.

3. DISPOSAL OF CAPITAL OR OTHER ASSETS

The ability to exit an investment by selling shares, equity interests, real estate, or other Ukrainian assets remains restricted under current regulations.

No Repatriation of Sale Proceeds

At present, foreign investors cannot transfer abroad funds received from the sale of Ukrainian assets to domestic buyers. This applies equally to the sale of corporate rights, real estate, securities, or other assets located in Ukraine.

Retention of Funds in Ukraine

If a sale is completed and payment is received in Ukraine, the foreign seller may only hold the funds locally (e.g., in a bank account), but transferring them abroad is prohibited.

Note on Transactions Outside Ukraine

Current NBU currency control regulations, including Resolution No. 18, apply only to cross-border transfers of funds from Ukraine. They do not restrict transactions where payment for assets is made outside Ukraine.

Accordingly, foreign investors may still sell their corporate rights or other Ukrainian assets to another investor provided that settlement is made outside Ukraine (e.g., from the buyer’s foreign account to the seller’s foreign account).

4. ADDITIONAL OPPORTUNITIES: THE “INVESTMENT LIMIT”

In addition to the main mechanisms described above, Resolution No. 18 also provides several additional exceptions that may apply in certain cases. In particular, to encourage additional capital inflows, the regulator introduced the “investment limit” regime.

The investment limit is defined as the total amount of foreign currency invested by a foreign investor into the share capital of a Ukrainian company starting from May 12, 2025. Within this limit, the relevant Ukrainian companies are entitled to carry out a number of cross-border currency transactions that would otherwise be restricted, including:

• repayment of loans received before June 20, 2023;

• repatriation of dividends abroad in excess of standard limits.

The current investment limit regime should not be viewed as a universal solution. However, it can provide targeted flexibility for companies supported by fresh foreign capital. Investors considering new investments in Ukraine should assess these additional opportunities.