Ukraine allows partial repatriation of dividends for 2014-2015

The National Bank of Ukraine (NBU) ruled on June 7 to lift a ban on repayment of dividends abroad till September 14. Only dividends for 2014-2015 will be allowed for repatriation. The transfer of dividends abroad can be made by a dividend payer or by an international investor. In each calendar month till September 14, a payer (or investor) can repatriate no more than USD 5 mln if the total amount of dividends subject to repatriation by such person is more than USD 50 mln. The monthly limit is 10% of total dividends in the amount of USD 10-50 mln, and it is USD 1 mln if total dividends are less than USD 10 mln.

Alexander Paraschiy: Some lifting of the dividend repatriation ban is positive, but it will be more important to hear from the NBU that dividends from 2016 profits will be also allowed for repatriation. The regulation allows to receive in full dividends from investors expecting to get less than USD 4 mln and at least 40% of dividends receivable in a total amount below USD 50 mln. At the same time, such rules discriminate against large international holdings that won’t be able to repatriate more than USD 20 mln from their Ukrainian dividend payers during this time.

We estimate the regulation limits the maximum amount of dividends that can be theoretically repatriated from Ukraine in four months to USD 0.5 bln, while the actual amount to be transferred is likely to be close to USD 0.4 bln. The NBU earlier estimated that repatriation of dividends for 2014-2015 could amount to USD 0.5-0.6 mln.