After nearly two years of active discussions within the IT and other business communities Ukraine, Ukraine finally moves to recognize the possibility for its businesses to enter into cross-border contracts electronically and in English.
Starting from 3 January 2017 the newly-minted law of Ukraine1 should solve a number of artificially created problems of Ukrainian businesses performing export of IT, design, advertising and most other services. The new law substantially eases requirements to documenting and settlement of payments for cross-border export of such services from Ukraine.
Among the landmark amendments introduced by the new law are the following:
Cross-border contracts can be executed electronically
The new law provides for possibility to execute export and import contracts both in writing and in electronic form (previously contracts with foreign business entities were required to be executed in writing only).
Various methods of execution of cross-border contracts
The new law introduced simplified procedure for executing contracts for export of services (except for the transportation services), whereby export contracts may be concluded by way of accepting a public offer, exchanging emails and invoicing for rendered services (including in electronic form), among other means.
Cross-border contracts in English
Ukrainian banks would accept cross-border contracts and other relevant documents in English and would not longer require Ukrainian translations.
180 Day Rule Exemption
The export of services (except for transportation services) and intellectual property rights is no longer subject to the 180 Day Rule. The Ukrainian exporters would not be required to settle payments under export operations within the legislatively established term - 180 days from the date when the services have been rendered as confirmed by the services transfer act.
Certain NBU restrictions remain effective
At the same time, certain restrictions applied to export operations, which were approved by the NBU within the last two years, remain effective. In particular, Ukrainian businesses are still required to sell foreign currency proceeds from their operations and may not settle their payment obligations by set-off, etc. More details of these measures are available in our legal alert on contingency measures introduced by the NBU by following the link.