Registration of loan agreements

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Loan agreements have become a popular instrument in tax planning allowing for considerable decrease in tax liabilities for those who take advantage of such technique. It can be effectively used when transferring funds from non-resident entities.

Campio Group will assist you with the process of drafting a loan agreement between a resident and non-resident and register this agreement with authorities (if necessary) in Ukraine or any other country.

Loan agreements between Ukrainian residents and non-residents are to be duly registered in the appropriate regional branch of the National Bank of Ukraine in accordance with the Regulation on the procedure of obtaining loans in foreign currency by residents from non-residents and providing loans in foreign currency by residents to non-residents, approved by the Resolution of the board of the National Bank of Ukraine No. 270 on 17 June 2004 (hereinafter NBU Regulation No. 270).

In order to register a loan agreement it is necessary to file a notification in a specific form (attachment No. 2 to NBU Regulation No. 270) and enclose a set of documents. The regional branch shall then issue a registration certificate (attachment No. 1 to NBU Regulation No. 270).

The most important thing is to correctly calculate the cost of the loan (including all commission fees, penalties and other payments or possible sanctions for undue performance). This cost cannot exceed the maximum limit set by the National Bank of Ukraine. That is, if the agreement stipulates the maximum allowed interest, there can be no additional penalties or fees under that same loan agreement.

The maximum interest rate limitation is defined in the Regulation of the National Bank of Ukraine dated 3 August 2004 No 363: Considering the cost of loans in the international financial markets the maximum interest rates (including commission fees and other disbursements stipulated by the appropriate agreements) for short-term, mid-term and long-term loan agreements, which enable residents to receive funds in form of loans from non-residents in foreign currency of the 1 group of the Foreign Currency and Bank Metals Classifier are set as follows:

  • 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.