Many Ukrainians are thinking about how to legally take their savings abroad in order to buy real estate or ensure financial stability outside the country. However, this topic is often full of complex legal nuances that can lead to serious problems if the law is not followed. Violation of currency control or non-declaration of funds can result in confiscation of money, fines or even criminal liability. Therefore, it is important to understand all the requirements of the law in advance to avoid trouble.
The lawyers of the “Repeshko and Partners” Bar Association told how to properly organize the process of taking money out of the country and be able to purchase real estate with it in the future, and also explained what rules will help protect your finances.
Taking large sums of money abroad is a topic that always raises many questions and nuances among Ukrainian refugees. We want to emphasize right away: improper or non-transparent withdrawal of funds can lead to serious legal problems. Confiscation, fines, blocking of bank accounts or even criminal liability are just some of the risks that inexperienced investors face. Therefore, it is important not only to choose legal channels for transferring funds, but also to have a clear understanding of the tax and currency restrictions of the country you are in.
It should be noted that in most European countries, payment during the purchase of real estate is made exclusively in non-cash form, that is, from bank account to bank account. Only there it is possible to buy real estate in Portugal, Austria and even Turkey. But problems can be expected not only when buying real estate. For example, in our neighbor across the fence – in Poland, an individual is allowed to pay for a purchase up to 20 thousand zlotys in cash. This restriction is in place to prevent cash settlements that may be linked to money laundering or tax evasion.
Therefore, it is necessary not only to take money out of Ukraine correctly, but also to bring it correctly to another country in order to be able to dispose of it freely and even buy a dream home.
Resolution No. 148 the Regulation on conducting cash operations in the national currency in Ukraine was approved, clause 7 of which establishes that natural persons have the right to make cash settlements among themselves under sales contracts subject to notarization, in the amount of up to 50,000 (fifty thousand) hryvnias inclusive .
Payments for an amount exceeding 50,000 hryvnias are made by:
- transfer of funds from account to account;
- making and/or transferring funds to accounts.
But currently, the legislation of Ukraine does not include liability for natural persons, and most of the property sale agreements are carried out with the help of cash settlement, and immediately in foreign currency (US dollars or euros). Before the war, notaries somehow controlled this process and certified the agreement in the presence of a certificate from the bank about making the payment (which, by the way, could be purchased for money without actually depositing the funds in the bank). However, military operations force adaptation to new realities, and in the conditions of total blackouts and endless worries, notaries are not interested in this moment, finding out from the parties only that the funds have been transferred in full, and there are no issues with mutual settlement.
At this stage, we recommend that the seller obtain a notarized copy of the purchase and sale of real estate and properly translate it into the language of the country in which you plan to live or buy new real estate. At the same time, the translation must be notarized and, in necessary cases, an apostille must be made.
The easiest way to transfer funds across the border to another country, and the first that comes to mind, is the transfer of cash. But here everything is not easy. According to the current norms in the legislation of Ukraine, it is possible to take a maximum of 10,000 euros per person out of the country without a written declaration. Thus, if the amount of the sale is small, and the family, on the contrary, is quite small, then it is quite possible to withdraw the required amount of cash for one or more border crossings. Several family members, who for a couple of weeks traveled between Europe and Ukraine, taking money for sold real estate in the same capital, is a very real story of our present.
If a child crosses the border, this rule also applies to her, so if a mother, child and grandmother cross the border, they can take out 30,000 euros without any obstacles. Everything above this amount is subject to written declaration. If the amount attributable to the child is more than 10,000 euros, the declaration for the minor is filled out by one of the parents or guardians.
In our opinion, even in cases where it is possible not to declare money, it is still necessary to declare it, although it is still a complicated procedure due to the circumstances, which we will talk about further. This is due to the policy of some countries, which is aimed at preventing corruption and money laundering.
Another nuance of the situation is that it is possible to take more than 10,000 euros per person out of the country only if they are withdrawn from one’s own bank account. This procedure is mandatory even for legal funds (for example, for the sale of the same real estate yesterday). Thus, the money must first be deposited into a bank account, then withdrawn, all statements and a receipt for withdrawing funds from the account, which, by the way, is valid for no more than 90 days, should be kept.
At the moment, a natural person can withdraw more than one hundred thousand hryvnias from an account in a Ukrainian bank per day (this is approximately €2,564). This nuance should be taken into account if you have a considerable amount. You can also withdraw cash from a Ukrainian bank card abroad with a limit of up to 100,000 hryvnias per month (€2,564), although you can pay in stores without a limit.
Another option for moving funds across the border is to execute a transaction in cryptocurrency. Many recommend buying cryptocurrency with a stable exchange rate, and then sell it on the Internet with payment to a foreign account. You can transfer money simply on a flash drive and without additional declarations – for this, you should purchase a Ledger hardware wallet and put cryptocurrency on it, and then deposit the money into an account in a foreign bank.
We recommend using this tool for those who really understand the issue of cryptocurrency, because just by accidentally revealing your wallet number to third parties, you can lose everything in three seconds. In addition, there is a point of view according to which, since cryptocurrency is often used to launder money and pay for criminal activities, transactions with it in some countries may demand significantly more than ordinary cash.
Another option for transporting money abroad is non-cash payments – the buyer transfers funds to the seller in a non-cash form to an account in a Ukrainian bank. A bank card in a wallet crosses the border. In the future, the citizen will use his Ukrainian card abroad. But in this case, the following restrictions apply:
- the limit of payments abroad from a hryvnia card is 100,000 hryvnias per month;
- the limit for withdrawing cash abroad from a hryvnia card from July 21, 2022 – 12,500 hryvnias per week;
- in addition, you can purchase 50 thousand hryvnias of currency (from a hryvnia card to a currency card, you can purchase and transfer 50 thousand hryvnias of currency);
- the transfer limit from a Ukrainian account to a foreign account also falls under the same 100,000 hryvnias;
- the limit of calculations and withdrawals from a currency card abroad is 100,000 hryvnias per day.
At the same time, opening cards in several banks for several family members bypasses the mentioned limits.
There are also some “exotic” options for transferring funds abroad – this is the implementation of exceptional payments, provided for in the resolution of the National Bank of Ukraine No. 18 of 24.02.22 (as amended). In particular, it is allowed to purchase and transfer foreign currency for goods that belong to critical imports, to pay the costs of treatment in medical institutions of a foreign country, to carry out currency transactions by residents and non-residents for mobilization and other activities, etc. Or buying through a legal entity, but these options are not available to the general public.
But as we mentioned earlier, withdrawing funds is only half the battle. According to FATF recommendations, the issue of origin of funds is currently the most important and acute (especially in EU countries). The fifth EU directive on preventing the use of financial systems for the purpose of money laundering and terrorist financing (AML‑5 directive), which was published back in 2018, until January 2020. must be taken into account in the legislation of all EU states, and its requirements have become mandatory for application by all EU banks. This Directive, among other things, introduced additional requirements for banks and other persons obliged to verify information about the sources of funds and sources of the client’s wealth.
Therefore, it is necessary not only to import funds to another country, but also to document where and how the citizen took the relevant funds. This is where it is necessary to mention the same translated and duly certified sales contract. It is generally desirable to have confirmation of not only the last contract by which the real estate was sold, but also copies of the documents on the basis of which you received this real estate (for example, the apartment was inherited (a copy of the certificate of the right to inheritance, and then it was already sold (a copy of the sales contract) ).
It should be noted that Great Britain, which has left the EU and whose real estate has traditionally been valued as an investment object, in addition to adopting the FATF recommendations, has resorted to even tougher measures and confiscates real estate whose owner cannot explain the origin of the funds for its purchase.
When answering the question about the origin of funds, it is necessary to take into account other important changes. For example, the creation of databases in which banks and other financial institutions will check information about you not only during the opening, but also during the subsequent use of the account.
10-15 thousand euros is considered an acceptable amount, for which it is mostly not necessary to report to European financial institutions. However, each bank in different countries has its own approach and requirements. Banks can often ask for much smaller amounts.
Sometimes in some countries there are certain relaxations for Ukrainians in the issue of legalization of funds. For example, in Spain, you can deposit up to 80,000 euros in individual banks, and the client will not be asked for confirmation of the origin of the funds, or for a declaration of passing customs control. In Great Britain, you can deposit up to 100,000 Pounds and you will not be asked about the origin of these funds. But for everything above that does not fall under the limit, which is accepted by the bank without justification, there must be officially confirmed documents.
To substantiate the origin of funds, a certificate of wages for recent years, contracts for the sale of real estate or cars, receipts for the withdrawal of bank deposits, a notarized agreement on the donation of funds, etc., are suitable. The most frequent period for which the documents must be is the last two years, but in our opinion, there are never too many documents in this case.
In some countries, in order to buy real estate, it is necessary not only to open an account in a local bank, deposit money into it with confirmation of its origin, but also to obtain a local tax number. You need to learn about all these nuances in advance so that other documents, such as a bank certificate about withdrawing funds in Ukraine, do not become invalid while you solve the current problems.
We would like to note once again that there is no universal algorithm for how to act in a particular situation. A lot depends on the country where you want to take the funds, the amount you own, the sources of your funds, the composition of the family, the value of the real estate you want to buy, and many other things. However, no one canceled the combined methods (something in cash, something through bank cards) of withdrawing funds. Always weigh and assess the risks before doing anything.
