ANALYSIS AND PREPARATION OF INVESTMENT SCHEMES AND OPENING OF ACCOUNTS IN FOREIGN BANKS.

MAIN PRINCIPLE OF INTERNATIONAL INVESTING

Personal capital placement with the aim of earning income by citizens is a favorable and secure enough investment scheme. For now, this method is not as scary and unknown as it was 10 years ago, since practically all large enterprises are interested in engaging investment capital. But such demand and informational coverage does not always benefit potential investors, as it makes it hard to choose a profitable project to invest in. The risks in such a case are quite big, as in the case of unprofitability of an enterprise, finances will be partially or fully lost. Potential investors must precisely comprehend the correlation between the size of the possible income in the whole investment period and the level of risks. The correlation is calculated by financial analytics taking into account the main and additional factors of the possible influence.

Investments into business in Ukraine work less effectively than the international ones, as a result of the unstable economic environment within the country, as well as in the international arena, which negatively affects the profitability of any enterprise. It cannot be said that the situation is too pessimistic, however the unwillingness of foreign companies to invest capital into national enterprises cannot be argued with. Moreover, investment programs in Ukraine and other European countries differ considerably. In the latter case many people interested in profitable investments are waiting for more attractive options. It requires to learn the market classification based on the various segments, conduct meticulous analytic research based on multiple periods, compare the received results based on different indicators and ultimately make a final decision.

IS IT WORTH TO INVEST INTO FOREIGN BUSINESS?

In the initial stage of introduction to the stock market, the principle of investment placement can be disorienting for the citizens. Actually, there`s nothing strange about it, as this area belongs to ones of the most complicated, the most fluctuating and the hardest to predict. To begin with, it`s necessary to determine which country is the most favorable for investments; then, to decide what currency the investments shall be made in; if they shall be put in one place or distributed by a few interesting projects.

Stock investments work only if the following aspects are taken into consideration:

  • Quality
  • Profitability
  • Risk level.

Ideally, an investment can be made on one of the aspects mentioned above. With the desire to obtain higher returns, the individual must be willing to undertake higher levels of risks. If the main goal is to minimize the risks, profitability proportionally declines. In order to understand what stocks are profitable to invest into, you have to understand the international economic environment deeply, as well as understand the status of the domestic economy of the state considered for investment. Investment schemes for individuals and legal entities differ significantly, so it`s better to refer to a specialist in order to get the best result.

CAN A UKRAINIAN INDIVIDUAL HAVE AN ACCOUNT IN A FOREIGN BANK INSTITUTION?

Despite the fact Ukraine is located almost in the center of Europe, this does not influence the standard of living of its population and its economic environment. Sadly, we have to admit that in the last 30 years of independence our country did not progress much in terms of the financial well-being of its citizens. Especially it is strikingly seen in the analytics of the changes of dollar and euro to hryvnia rate. Obviously, many citizens wonder if they can open an account in a bank institution abroad, as national bank institutions are not credible. Official legal prohibition restraining such acts does not exist, but under certain conditions it`s necessary to follow the legalized procedure to avoid criminal and administrative prosecution by the executive and controlling state authorities.

PROCEDURE OF OPENING A BANK ACCOUNT IN 2021

Those who are interested in such questions know that a citizen of Ukraine could not open a settlement account in a foreign (European) bank institution online without notifying the respective authorities and obtaining a respective license. Such documents guarantee that no sanctions or any other penalties shall be imposed by the state. Such operation could be conducted without any license only if the person in question was located in the territory of other state at the time it is conducted and it can be proved by the data of migration services. Since 2019, opening a bank account abroad in a foreign bank institution by a citizen of Ukraine, or a legal entity, is not forbidden if its profit is made abroad.

IS IT POSSIBLE TO OPEN A BANK ACCOUNT IN A FOREIGN BANK INSTITUTION ONLINE?

The idea of having a valid account in a financial institution of Germany, Switzerland, Cyprus, other states is quite attractive. It is interesting not only for those who reside permanently on the territory of other states (labor migrants), but also for those who reside permanently in our state and do not plan to change its place of residence. In the first case it is just convenient, as it allows the individual to earn a salary, to accumulate income, or to pay for daily essential expenses without using cash. In the second case opening a bank account in a foreign (European) bank, for an individual, gives the following advantages:

  • Security of the investments against inflation and devaluation of hryvnia:
  • Possibility of free access to the attractive foreign investment projects:
  • Possibility to use beneficial bank products developed specifically for the European financial market.

Only clients interested in off-shores can open a bank account in the foreign bank institutions distantly (online). If it comes to the need to hold an active settlement account to fixate the commercial activity income, in most cases physical presence is a must. Opening a bank account abroad (in a European bank) for individuals employed there temporarily or permanently under a work contract is must easier, as they are not under question.

BASED ON WHAT DOCUMENTS DO FOREIGN BANK INSTITUTIONS OPEN BANK ACCOUNTS FOR INDIVIDUALS?

This issue is the biggest matter of concern for those who are seriously thinking about the possibility of investing in the territory of a foreign country, whilst staying in our state. Many believe such a procedure takes a lot of time and requires submitting a whole package of documents. In fact, it`s not that complicated, as bureaucracy thrives only in the territory of post-Soviet space.

If you refer to attorneys at law “Bachynskyy and Partners” for assistance regarding opening a currency investment account abroad (in a foreign bank) for a legal person, an individual (citizen of Ukraine), the process shall go quickly and smoothly. The following documents must be submitted:

  • Internal Ukrainian password
  • International Ukrainian passport
  • Tax ID

Such a package of documents is enough if submitted personally at the bank office, if the amount of investment does not exceed the maximum allowed. The amount may vary from 50 to 10 000 USD/EUR.

What may be required ADDITIONALLY?

In order to open a bank account for an individual, a foreign bank may request additional information, however, in most cases it is submitted orally and does not require any special documental proof. Particularly, the representatives of a financial institution may additionally request:

  • The purpose of opening a bank account
  • The origin of the money
  • Possession of real estate and moveable property
  • Official sources of income.

Based on the information provided above, we can confirm that the answer to the question, if a citizen of Ukraine can open an account in a foreign bank institution, is yes. All that matters now is to follow the requirements and not to jump at the first available opportunity, but choose the bank institution and facilitators carefully.

WHAT FOREIGN BANKS ARE THE BEST TO OPEN AN INVESTMENT ACCOUNT AT?

For today, financial institutions of Cyprus and Poland treat the clients from our country in the most loyal way. If deciding to invest in those countries, such operations can be performed distantly with a minimal package of documents. In most cases, a positive decision is made almost after the submission. But it must be understood that by far not all foreign banks are good. There are enough financial institutions with not the best reputation.

Before getting temped by a favorable, at first sight, opportunity, it`s important to ensure reputation and financial stability of the financial institution. Trust of investors and international financial market ratings are very important indicators helping to determine the credibility of a financial institution. Information about known financial institutions is found in open sources, so it is possible to learn it on your own. You can confidently trust information from official sites.

IS IT WORTH SEEKING ASSISTANCE?

Legal persons and individuals can open a bank account in a foreign bank via the internet by themselves or by the professionals of “Attorneys at law Bachynskyy and Partners”. In the first case it`s cheaper but comparing to all the possible risks, such economy for sure won`t be a smart choice. Moreover, competent professionals may offer a convenient and favorable investing scheme available for the investors of European financial institutions.

If clients plan to invest money earned in the territory of Ukraine, they need to obtain a license from the National Bank of Ukraine. Lawyers may provide necessary assistance in this issue. In the following case the amount of money transferred should not exceed 50 000 USD. This money must be declared and have taxes paid on. Our staff will not only consult clients in detail whether a citizen of Ukraine can open bank accounts in foreign bank institutions abroad online, but shall also choose a bank institution with the most favorable investment terms.

Articles
A new law on virtual assets: the picture is formed, but without details. On September 8, 2021, the Verkhovna Rada has finally adopted the long-awaited law "On Virtual Assets", which clarified many ambiguous points. This is especially true for the status of cryptocurrency and the rules of its circulation in the country. Let`s take a closer look at novelties. An ambiguous term Let's start with what the legislator actually means by "virtual assets". There are the following features:  they are an intangible good (cannot be represented on tangible media)  fall under the list of objects of civil rights (that is, they can be owned and be disposed of)  represent an electronic form of a set of data (essentially, they are blocks of information put in order);  the existence and circulation of assets are due to software tools (specific electronic environment). From these features we can draw the following conclusion: virtual assets are not limited to cryptocurrency. Digital currency is part of the concept, but other instruments, such as tokens, NFTs, or even in-game items, fall under the definition. Actually, the actual existence of most digital products, having a certain value, is due to the software environment (ecosystem), either it is blockchain technology, a trading platform, or an online game server. It should be noted that the attempt to define virtual assets was already made in the adopted Law of Ukraine in counteracting money laundering. In this act, they understand it as digital means of payment, which goes against the new definition. As a result, there are now two different explanations for virtual assets, which causes significant confusion not only in regulation but also in interpretation. It is definitely necessary to expect clarifications from competent state bodies. Let's return to the new law. Its application covers legal relations in which the "Ukrainian element" is present:  provider or recipient of services represented in Ukraine;  an agreement according to which the turnover of virtual assets is carried out in accordance with Ukrainian legislation;  the acquirer of assets (or both counterparties) is a resident(s) of Ukraine. The law also introduces an interesting division of all virtual assets into two groups: secured and unsecured. Here again, there is a problem of interpretation. The first category includes products exchanged for (state) currency, the second category includes instruments that can be exchanged only for other digital assets. There is an alternative opinion: that the turnover of secured assets is supported by real goods (money or other property), while unsecured ones are not supported by anything. The latter interpretation is the most credible, as the new law stipulates that virtual assets are NOT means of payment. Moreover, they cannot be exchanged for real goods, be they property, services or money. This significantly narrows the potential for the use of virtual assets not only for commercial but also for civilian purposes. About obligatory licensing The new law states that in some cases, the use of virtual assets will require licensing. The 4 types of activity are mentioned:  storage and management of virtual assets (or its` keys)  servicing of exchange operations with virtual assets (both for other analogues and for real goods);  translation of digital assets;  any intermediary services. A list is quite impressive, but there are some important exclusions:  if your service works with cryptocurrency wallet (it means users can dispose of accumulations into cryptocurrency independently);  If your service works on smart contracts or decentralized protocol, based on which internal transfers are performed. As to intermediary services, everything is more compicated. Actually, any mediation is based on the public share offering. That is why it is subject to licensing. How to get a license? A company that wishes on legal grounds to engage in virtual assets must satisfy legislative requirements. The key role is played by the minimum amount of the statutory capital, which equals 1,19 million hryvnyas (for non-residents it is 5,95 million hryvnyas) in case of storage and administration. For other types of activity (trading, translation and mediation services) the minimum size of the statutory capital amounts to 595 thousand hryvnyas (for non-residents is 2,98 million hryvnyas). The order of the registration of license:  to compose an application and prepare documents.  to pay state fee (68-136 thousand hryvnyas for residents and 340-680 thousand hryvnyas is for non-residents).  to pend review of the request (30 days).  to get a license. The duration of the license is 1 year. No norms about the continuation of legal force of permission are set (we are expecting amendments or explanations from the Ministry of Digital transformation of Ukraine). Notably that non-residents must pay a far greater sum, than domestic companies. The Ukrainian legislator obviously encourages an internal market, getting rid of a strong foreign presence (that, in fact, coincide with modern politics of the state on the whole). Together with an application, the following documents must be prepared: The access code to the copy of the Statute of the company (or the foundation agreement) kept in an electronic file in the database of the Unified State Register of Enterprises and Organizations (USREO);  Funding sources of the statutory capital (where the money are taken from);  confirmation of the actual injection of money;  information about beneficiaries (special attention must be paid to business reputation);  the information about the director and founders;  the check about payment of state fee;  the internal regulations, in accordance with which ones, the privacy policy rules are regulated. In the terms of volume of necessary documentation of licensing is very alike with complete registration of legal entity. It is understood that the state wants the severe adjusting of activity of organizations that will engage in virtual assets. Is it already possible to get a license? The adoption of the law by the parliament is a significant step forward in adjusting and legal market of virtual assets creation in Ukraine. However, the new rules haven`t come into effect yet - their term of introduction depends on making amendments in the Internal Revenue Code. It is yet unknown, when a legislator will decide to enter the renewed system of taxation for such assets. Being "IT-hub" and territory, where cryptocurrency enjoys large popularity, the question of taxes must be decided maximally safely. Despite the presence of obvious gaps in interpretation, a new law on virtual assets gives the official narrative of what takes place and that, how the legal relationships related to cryptocurrency will be regulated. It is to be hoped that in the nearest time the Ministry of digital information will give out the detailed explanations concerning debatable norms.
20/01/2022
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