Payments to Non-Residents, Investment Returns and Dividends in Ukraine

The parent company has been funding its representative office in Ukraine for years. These funds are used to pay rent, salaries, and other expenses, and from time to time the representative office transfers unused funds or reimbursements back to the parent company. This is standard practice, and until now everything has worked without problems.

Then, unexpectedly, the bank you have been using for these payments asks you to explain the economic substance of the transaction and provide documents it had never requested before.

The issue is that a representative office in Ukraine is not a separate legal entity, does not have its own charter capital, and does not issue corporate rights. Therefore, a transfer from the representative office to the foreign company cannot be documented as a dividend payment.

For such a payment, you need to identify its actual economic and legal basis, for example:

• return of unused funding;
• payment of expenses or services;
• performance of an intragroup obligation;
• another permitted transaction.

The bank will review the basis for the payment, the supporting documents, and compliance with foreign exchange restrictions.

The worst-case scenario is discovering after the fact that something was documented incorrectly—when the payment has already been put on hold and you have to collect the required documents urgently. Why does this happen?

The short answer: transferring funds from Ukraine abroad is possible in 2026, but there is no single rule that applies to every transaction. The bank first determines the economic substance of the transaction—payment for imports, return of funding, payment of dividends, or another capital movement—and then checks whether it is permitted under the current version of NBU Board Resolution No. 18, which limit applies, and whether the supporting documents are sufficient.

Having a contract and sufficient funds in the account does not mean the payment will go through. For a representative office or a Ukrainian company with foreign capital, the safer approach is to map out the payment process with the bank, a lawyer, and a tax advisor first, and only then sign the documents and set the payment date.

In this article, we explain which documents and supporting explanations you should prepare to transfer funds to a foreign parent company without delays or unnecessary complications.

What Most Often Stops a Payment

Common reasons for a bank delay or refusal include:

• the payment purpose does not match the contract and primary accounting documents;
• the actual provision of services or the business purpose cannot be substantiated;
• the debt arose during a period for which no general permission applies;
• the limit was calculated incorrectly or has already been used;
• the ownership structure or payment chain contains a sanctioned or high-risk element;
• the documents required for tax relief are missing;
• the corporate resolution on dividends or return of capital was prepared incorrectly.

A bank conducts its own financial monitoring and may request more documents than those expressly listed in the NBU resolution. Agreeing the document package with the servicing bank in advance reduces the risk, but does not guarantee that the payment will be processed.

Why Transfers of the Same Amount May Be Subject to Different Rules

Foreign exchange restrictions are based not on the wording in the payment order, but on the legal and economic basis of the transaction. Payment for equipment, a fee to a foreign consultant, repayment of a loan, a buyout of an ownership interest, and dividends are different transactions. Each is subject to its own conditions, documentation requirements, and restrictions.

In practice, a payment should be checked against five questions:

• who is making the payment and who is the ultimate recipient;
• what gave rise to the obligation and when it arose;
• whether the transaction is expressly permitted by NBU Resolution No. 18;
• whether a standard or additional limit is required;
• which tax, sanctions, and banking checks apply.

Trying to describe a return of capital as a “payment for services” or dividends as “repayment of debt” creates a risk that the transaction will be blocked, additional taxes will be assessed, and the accuracy of the documents will be challenged.

Related: How to File a Profit Tax Return for a Representative Office in Ukraine

Payments to a Nonresident for Goods, Work, and Services

The NBU permits businesses to purchase foreign currency and transfer it to pay for imported goods, work, and services. However, the bank checks whether the transaction is genuine, whether it matches the contract and supporting documents, when the obligation arose, the applicable foreign exchange supervision period, and any sanctions or risk indicators.

Depending on the transaction, the bank may request:

• an international trade contract, specification, and invoice;
• acceptance certificates, reports, transportation documents, or customs documents;
• an explanation of the business purpose and economic substance of the service;
• documents on the ownership structure and ultimate beneficial owners;
• confirmation of the signatories’ authority and the relationship between the payer and the recipient;
• documents concerning taxes and the application of an international tax treaty.

Separate incentive limits apply to older import obligations, refunds of advance payments to nonresidents, and certain other transactions. For this reason, the dates of the contract, delivery, acceptance certificate, and the debt itself are critical.

Can a Foreign Investment Be Returned?

There is no unrestricted channel for returning any foreign investment. You first need to determine the actual nature of the transaction:

• sale of corporate rights;
• reduction of charter capital;
• liquidation payment;
• repayment of a loan to a nonresident;
• payment of income to an investor.

In 2025–2026, the NBU introduced several additional limits linked to new capital inflows. In particular:

• An investment limit is created from funds received from abroad as contributions to the charter capital of a Ukrainian legal entity after the date specified by the NBU.
• A separate loan limit may be created from new foreign loans.
• There are also limits linked to charitable contributions for defense purposes. As of August 11, 2026, the NBU expanded these options and, subject to specified conditions, allowed certain limits to be transferred between companies within the same group.

These mechanisms do not create an automatic right to transfer any amount abroad. The bank checks the source of the limit, the date the funds were received, whether the companies belong to the same group, the transaction documents, and whether the limit has been used more than once.

Related: Global Minimum Tax Rate (OECD Pillar Two): How Companies Can Adapt to the New Rules

Why a Representative Office Does Not Pay Dividends

Dividends arise from corporate relationships: a legal entity distributes part of its profit to the owner of its corporate rights. A representative office is a separate subdivision of a foreign company, not a separate company in which the parent entity owns an interest. Therefore, the representative office cannot adopt a corporate resolution to distribute its own profit and pay dividends to the foreign company.

For example, a representative office returns to the foreign company an unused balance of previously received funding but states “dividends” in the payment documents. The bank may suspend the transaction and request a profit distribution resolution, information on corporate rights, and the period for which the dividends were declared. The representative office will be unable to provide such documents because no corresponding corporate relationship exists. The payment will have to be explained and documented according to its actual basis.

The situation is different if, in addition to operating a representative office, the foreign company owns an interest in a separate Ukrainian LLC. In that case, the Ukrainian LLC may distribute profit and pay dividends to its foreign member, subject to corporate procedures, taxes, foreign exchange restrictions, and bank requirements. The payer in such a transaction is the LLC, not the representative office.

Accordingly, the first step is to determine the payer’s status:

• if the funds are transferred by a representative office, the documentary basis for the transfer must be established within the activities of the foreign legal entity;
• if the funds are transferred by a Ukrainian LLC, a corporate resolution may allow the payment to be treated as dividends to the foreign member.

Which Dividends Can a Ukrainian Company Transfer Abroad?

This section applies specifically if your company has a Ukrainian LLC in Ukraine.

As of August 11, 2026, the standard repatriation channel covers dividends accrued based on business results for periods beginning on or after January 1, 2023. Dividends for earlier periods and payments from older retained earnings should not automatically be treated as covered by this permission.

The basic monthly limit is the equivalent of EUR 1 million per issuer of corporate rights. Requirements also apply to how long the issuer has existed, how long the investor has held the corporate rights, and whether the funds are transferred directly to the investor or through a depositary system provided for by law.

If an investment, loan, or other incentive limit is available, dividends may be paid above the basic limit—but only within the amount and under the rules of the relevant mechanism.

Before making the payment, you should prepare a resolution of the competent governing body, financial statements, a net profit calculation, information about the member and the period for which the interest has been held, and coordinate the document package with the bank.

Related: Changing the Name of a U.S. Company’s Foreign Representative Office

Foreign Exchange Permission Does Not Eliminate Taxes

A transaction permitted by the NBU may still be subject to tax. For dividends paid to a nonresident, the Tax Code provides for a standard 15% withholding tax on Ukraine-source income unless an international tax treaty provides for a different rate.

A foreign address alone is not enough to claim treaty relief. In most cases, a proper tax residency certificate is required, along with verification that the recipient is the beneficial owner of the income and that the structure is not used primarily to obtain the tax benefit. For payments for goods and services, the tax treatment depends on the type of income, where the services are provided and consumed, whether there is a permanent establishment, and the terms of the contract. Applying 15% automatically to every payment to a nonresident is incorrect.

A Practical Process for a Foreign Company

We recommend using the following process:

1. Determine the payer’s status: a representative office of a foreign company or a separate Ukrainian legal entity. Then identify the payment’s actual legal and economic nature.
2. Check the current version of NBU Resolution No. 18 specifically for the planned transfer date.
3. Determine whether a general permission, the basic limit, or one of the incentive limits applies.
4. Assess the Ukrainian tax implications and whether an international tax treaty can be applied.
5. Prepare the corporate, contractual, primary accounting, and banking documents.
6. Before signing the final documents, send the bank a description of the transaction and a list of supporting documents.
7. Specify in the contract which party bears the risk of delays, changes in the rules, additional taxes, and bank charges.

Foreign exchange rules change quickly: the NBU announces new easing measures in separate packages. Therefore, for recurring payments to a group company or investor, it is advisable to have an operational payment framework with control dates and a document package rather than relying on a one-time memorandum.

If you would prefer a team of professionals who continuously monitors the latest changes to handle this work for you, you can entrust it to us.

As part of our work, our lawyers:

• review the payment structure, corporate resolutions, contractual terms, and tax conditions;
• prepare the document package for the bank;
• support the representative office or Ukrainian company with foreign capital during foreign exchange supervision.

We do not promise that a transaction will be processed regardless of the bank’s rules, but we help identify restrictions in advance and select a lawful payment route.

If your representative office plans to transfer funds to a foreign company, or a Ukrainian company with a foreign member is preparing to pay dividends, contact us to determine the lawful basis for the payment, review the foreign exchange restrictions, and prepare the documents required by the bank.

Learn more about our services for foreign representative offices in Ukraine here.