Registration of credit and loan agreements

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Such credit agreements are registered in Ukraine in the appropriate regional branch of National Bank of Ukraine in accordance with the ‘Regulation on the procedure for obtaining credits and loans in foreign currencies by residents from non-residents and on residents providing credits and loans to non-residents’, approved by the Resolution of the board of the National Bank of Ukraine No270 dated 17 June 2004 with updates and amendments.

Registration of a loan agreement (credit agreement) consists of the following stages:

Stage 1. Drafting the credit agreement (loan agreement) itself and supporting documentation necessary for its registration.

Stage 2. Submitting the documents to the bank that services the Ukrainian resident in order to obtain its written consent. Such consent will be then used for registration of the loan agreement (credit agreement) with the correspondent Department of the National Bank of Ukraine. Terms of reviewing the documents takes about 10 workdays.

List of documents that need to be submitted includes the following:

1. Information about the resident of Ukraine:

• copy of the company’s registration certificate or extract from the State Registry;
• copy of the certificate from the State Registry of Companies (statistics);
• copy of the VAT certificate;
• requisites of the bank where the company is serviced, which include: bank address, branch code, phone number, correspondent-bank, SWIFT;
• director’s phone number;
• full name of the chief accountant and his phone number.

2. Information about non-resident:

• copy of the Certificate of Incorporation;
• exact address;
• information about the authorized person, who will be signing the agreement. In case the Attorney signs the agreement, it is necessary to provide an apostilled copy of the Power of Attorney with a translation into Ukrainian. If the agreement is to be signed by the Director, then it is necessary to present a document that proves Director’s authority (company’s resolution on appointing the director with statutory).

3. Information about the agreement:

• amount of agreement and currency;
• purpose of the loan;
• maturity date of the loan (it has to be a precise date, e.g. 5 June 2020);
• interest rate;
• penalties (as agreed by the parties).

What else do you need to know about registration of credit and loan agreements?

• If receiving and repayment of credit  from a non-resident will be conducted through an account opened outside the territory of Ukraine, it is mandatory for resident of Ukraine to receive personal license from the National Bank of Ukraine with the right to place value assets on the accounts located outside of Ukraine in way, established by the National Bank of Ukraine. In case if resident of Ukraine is offering loan in foreign currency to a non-resident, personal license for transfer foreign currency outward Ukraine is as well need to be obtained.
• Size of all payments on the loan (including all the fees, penalties, sanctions for the improper performance of the contract and other payments under the contract) shall not exceed the amount calculated at the maximum interest rate set by the NBU. This means that you cannot indicate interest on the loan under the contract as fixed at a maximum (the maximum rate of NBU) rate.

The maximum interest rate limitation is defined in the Regulation of the National Bank of Ukraine dated 3 August 2004 No363 with updates and amendments is:

for fixed interest rate:

-     for loans with maturity of less than 1 year – not more than 9,8% p/a;

-     for loans with maturity from 1 to 3 years – not more than 10% p/a;

-     for loans with maturity of more than 3 years – not more than 11% p/a.

for variable interest rate:

LIBOR for three-month deposits in US Dollars plus 750 basis points.

It is necessary to note that these maximum interest rates already include the possible commission and penalties, which may be stipulated in short-term, mid-term and long-term loan agreements upon which the loans are to be made in the foreign currency of the I classifier currency of the Foreign currency and banking metals.

Please contact our office for a more detailed consultation regarding this matter. Our lawyers will be glad to answer any of your questions.