The National Bank of Ukraine, or NBU, has lifted all the remaining limits and restrictions on the repatriation of profit dividends, the central bank announced on July 9.
The NBU said that the decision comes into force on July 10 and is intended to boost the country’s investment climate and move it further down the road toward currency liberalization, a package of reforms that the NBU says will eventually allow for the free movement of capital.
After July 10, businesses and non-residents in Ukraine will no longer face limitations on the transfer of profit dividends abroad. This will make it easier for foreign investors to move the money they make in Ukraine to their home countries.
Previously, such transfers were allowed as long as they did not exceed 7 million euros per each legal entity, the NBU stated. On May 8, the NBU had increased that limit to 12 million euros.
The decision to remove limitations entirely, approved by the National Bank’s board of directors on July 9, will not affect Ukraine’s macro-financial stability, NBU economists assured.
“Another currency liberalization will not have negative consequences for macro-financial stability,” the NBU said.
“Repatriation of dividends generally does not significantly impact on the market, because the purchase of currency for this purpose is about 4% of the total demand (by) bank customers for foreign currency,” the bank said, in a statement translated from Ukrainian.
Canceling limits on the repatriation of dividends is the third significant step toward currency liberalization that has been put in place over the last three weeks, the NBU stated.
Previously, the National Bank abolished the requirement that companies keep a significant portion of their earnings in the local currency, the hryvnia, and removed a limit on the financing of Ukrainian business’ representation offices abroad.
“In general, since the beginning of the year, the National Bank has already abolished more than 30 restrictions on the foreign exchange market. Currency liberalization will continue in line with the pace of improving the macroeconomic situation. Its ultimate goal is the free movement of capital,” the bank stated.
