News

Newsletter – October 7, 2024

 ·       Monetary Policy Committee Meeting Results (September 2024)

·       uResidency: A Path to Digital Business in Ukraine

·       Amended procedure for reservation military obliged employees during martial law

Monetary Policy Committee Meeting Results (September 2024)

On September 18, 2024, the Monetary Policy Committee (MPC) of the National Bank of Ukraine (NBU) convened to discuss key factors influencing inflation and the economy. Members reviewed recent inflationary trends, highlighting how factors like poor harvests, increased production costs, and the weakening of the hryvnia accelerated core inflation beyond forecasts. While inflation expectations remained stable, risks like budget deficits and potential further shocks from the ongoing war present challenges.

The committee debated the policy rate, with ten members supporting keeping it at 13%, which would help safeguard savings against inflation and support currency stability. One member advocated for a rate hike to 13.5% due to inflationary pressures and rising budgetary spending.

The MPC also explored adjustments to monetary policy tools, including reserve requirements for banks and interest rates on government securities, aimed at mitigating the risk of budgetary financing through emissions. They agreed to continue carefully calibrating policy tools in response to inflation risks, market dynamics, and the evolving war situation, avoiding rate reductions until at least the end of 2024.

Conclusion: The NBU maintains a cautious monetary stance to control inflation and support economic stability amid war-induced uncertainties.

uResidency: A Path to Digital Business in Ukraine

In September 2024, Ukraine launched the uResidency program, offering electronic residency to foreigners wishing to conduct business under Ukrainian jurisdiction. Spearheaded by Ukraine's Ministry of Digital Transformation and supported by the EU and Estonia’s E-Governance Academy, this initiative aims to attract investments and boost the economy.

uResidency grants non-residents the right to register businesses in Ukraine, generate income abroad, and automatically pay taxes in the country. The program offers simplified tax conditions, with a flat 5% income tax rate. Importantly, no physical presence in Ukraine is required — applicants can register remotely via a mobile app or website. Initial identity verification occurs at Ukrainian consulates, with future plans to digitize the process entirely.

The program’s initial focus is on IT professionals from Slovenia, India, Pakistan, and Thailand, with a goal to expand to more countries. Ukraine expects the first 1,000 e-residents to generate approximately $1 million in tax revenue annually. Countries recognized as aggressors or occupiers are excluded from participating in the program.

This initiative is seen as a significant step towards rebuilding Ukraine's economy through international collaboration and digital innovation.

Amended procedure for reservation military obliged employees during martial law

On October 1, 2024, the Cabinet of Ministers amended the Procedure for reservation military obliged employees during martial law through the Unified State Web Portal of Electronic Services (Diia Portal).

The term of receiving decision on reservation has been increased up to 3 working days, the requirements for the information to be included in the list of employees to be reserved are also clarified. Now it is additionally required to indicate full details of the actual military registration document (in paper or electronic form), military specialty; date of clarification of military registration data.

Now it is also required to keep military records of employees, who are to be reserved, in compliance, with all requirements for reporting to the military office.

The positive decision now is guaranteed unless the military obliged person:
- is on military registration and has a military registration document (in paper or electronic form);
-has clarified the data on being on military registration;
-is not on "military search".