This week I attended one of those ‘Breakfast Seminars’ in Kyiv organised by one of the ‘Big Four’ international accounting/consulting firms. Like many of you, I receive many breakfast seminar invitations each week and usually politely decline the invites. But this week the subject on offer was of interest to me. e.g. Updates on current taxation for expatriates working in Ukraine plus recent changes from the authorities about personnel and Employment Law.
One of the really interesting things about living and working in Ukraine is the fact that legislation changes very rapidly. Moreover, when new laws are supposedly introduced very few people in government and the civil service have any idea what these new laws are all about. The law makers don’t know because they didn’t think it through. The law makers assume that ‘someone…somewhere’ will work it out and make it happen. The various government ministries don’t understand the new laws. The people working in the multitude of government offices have absolutely no idea what these laws are all about. Lawyers and accountants/consultants are probably the people who will try and get their heads around any new laws so they can see where the ‘loop holes’ exist. The people who should be most affected by these laws have absolutely no understanding of what is going on.
During the questions and answers session at the above mentioned breakfast meeting, one attendee asked about the benefits for a foreigner obtaining a permanent residents permit. The answers provided by the ‘experts’ from the big four company were good and in line with my understanding of the benefits. However, I was surprised when they discussed the negative aspects of the permanent residents permit indicating that once a foreigner holds this permit they fall under the exact same rules as a Ukrainian citizen. E.g. Ukrainian citizens are not allowed to hold a foreign bank account in a country outside Ukraine, nor are they allowed by law to own shares in any business outside Ukraine unless they obtain permission from the relevant government department. (Visions of soviet days spring to mind).
The ‘expert’ from the big four company explained that foreigners holding a residents permit should give up holding money in any foreign country. All their ‘wealth’ must be held in Ukraine.
I could not hold back the laughter any longer. I then proceeded ask if she was serious about this remark. ‘It’s the law’, she replied. (The thought of all the wealth held by Ukrainians in offshore bank accounts brought another smile). So I then asked, WHO exactly would have the power to close my bank accounts held in other countries? The answer came back ‘Well we are not aware that anyone has experienced this yet’. Nor are they likely to in my opinion. Anyhow I was pushed for time and had to leave the seminar.
But it got me thinking…….