Starting from 3rd of December, 2016 Ukraine has eliminated unnecessary bureaucratic procedures, which were applicable to settlements for Ukrainian service export. Namely, in accordance with the adopted Law of Ukraine “On amendments to certain legislative acts of Ukraine regarding the removal of administrative barriers to exports of services”, the following is allowed:
- Ukrainian service providers will be able to receive payments from overseas based on emails exchange or exporter’s invoice (including in electronic form). Before the amendments, the servicing banks required signed paper services agreement to approve the incoming payment which often led to needless inefficiency.
- An invoice in electronic form is recognized as the primary document for the purpose of accounting and financial reporting. Such invoice can be signed by electronic signature as well as other means of author’s identification can be used.
- Documents in English do not require translation. Before the amendments, the exporter had to provide the servicing bank with Ukrainian translation of supportive documents.
- The servicing banks will no longer be responsible for controls over incoming payments for the export of services and intellectual property rights (the exceptions are transport and insurance services). Earlier the servicing bank had to validate the grounds of incoming payment and terms of settlements in accordance with the cross-border services agreement and Ukrainian law.
The amendments are aimed to facilitate the inflow of foreign currency into the country and export of services from Ukraine, particularly in IT sector. Export-driven IT services sector is one of the most promising and developing sectors in the Ukrainian economy at present. In 2016, IT sector’s input to country’s GDP amounted 3.3% (2.7 billion US Dollars). It’s anticipated that with Government’s support, the industry can bring 4.5 % GDP already the next year. Additionally, as globally, Ukraine has a growing market of freelancers, who are often focused on foreign customers.
Summing-up, the simplification of settlements as described above is a very postiive step by the Ukrainian Government in improving doing business and easing Ukraine’s services export.