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…….
