Loan agreement in Ukraine


Loan relations in Ukraine are regulated mainly by clauses 1046 to 1053 of the Civil Code of Ukraine.

Clause 1046 of the Civil Code of Ukraine provides that on the grounds of the loan agreement in Ukraine one of the parties (the lender) transfers the right of ownership for money or other things with generic characteristics to the other party (the borrower), and the borrower undertakes to return the same amount of money (the loan amount) or the same quantity the same kind and quality things. The loan agreement becomes valid at the moment money or other things are transferred to the borrower.

According to clause 1047 of the Civil Code of Ukraine the loan agreement is to be made in the written form if the loan amount exceeds 10 minimal non-taxable amounts of income (10 x UAH 17 = UAH 170, which is about USD 34) and/or if the lender is a corporate entity. Acceptance of money or other things can be confirmed with appropriate written receipt if required.

Clause 1048 of the Civil Code of Ukraine provides that the lender has the right to receive appropriate interest from the borrower, if otherwise is not provided by the agreement (contract) or by the law. Amount of the interest is to be stipulated in the agreement, otherwise the same considered to be equal to the interest rate of the National Bank of Ukraine (at the moment the interest rate is 10% p.a.). If otherwise is not provided by the loan agreement the interest is to be paid monthly.

The loan agreement is considered to be interest-free if:

- the loan agreement was made between natural persons, the loan amount does not exceed 50 minimal non-taxable amounts of income (50 x UAH 17 = UAH 850, which is about USD 170) and the loan agreement does not connected with entrepreneur activity of none party of the agreement;

- the borrower has got the things with generic characteristics.

As it is provided by clause 1049 of the Civil Code of Ukraine, the borrower has to return the loan (money amount or quantity of the generic things) to the lender within terms and conditions of the loan agreement. However, if such term is not specified in the loan agreement, the loan is to be returned to the lender within thirty days starting from the moment, when the lender has requested the borrower to return the loan.

The loan agreement with non-resident lender to be registered at the appropriate regional branch of the National Bank of Ukraine.

The above information is provided herein in educational and informative purposes only. It is provided that you have to get appropriate legal advice as regarding the legal and other issues of your interest in Ukraine in order to have the exact, extensive and up-to-date legal and other related information.

Do not hesitate to contact us if you have any questions or issues of legal nature, our Law Firm is working for you and our experienced legal specialists are always ready to help providing the client with appropriate legal consultations, legal reports and summaries, reasonable legal advices and all the other required legal support, assistance, coverage and protection.

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