Residency Program Launch, Licensing Update for Medical Cannabis

Electronic Residency Program to Be Launched in Ukraine Soon

According to the Ministry of Economy, Ukraine is about to launch the uResidency program, which will provide foreigners with the opportunity to do business in Ukraine. This project is expected to increase tax revenues from e-residents and open up new ways to attract investment.

The uResidency program will allow foreigners to register a business in Ukraine, receive income from abroad, and automatically pay taxes at a simplified rate of 5% of the income. All processes, including tax payments and reporting, will be carried out automatically.

There is no need to visit Ukraine in person to obtain the e-resident status. The application can be submitted through a special mobile application or on the official website of the program. After that, the applicant will have to visit a Ukrainian consulate to confirm his or her identity and open a bank account. In the future, the identification process will become fully digital.

Currently, the service will be available to citizens of Slovenia, India, Pakistan, and Thailand, and the list of participating countries will be expanded in the future. Participation in the program is prohibited for countries that Ukraine has recognized as aggressor states or occupiers.

Ukraine Fulfills 2 Indicators under the Ukraine Facility Program

This was reported by the Ministry of Economy on 2 October this year. In particular, the Cabinet of Ministers of Ukraine has recently adopted two decisions, which approved the Strategy for Demographic Development of the country until 2040 and the terms of reference for the creation of an information system for the National Energy and Utilities Regulatory Commission (NEURC), which are indicators of the implementation of the Ukraine Facility Plan under the European Union’s Ukraine Facility initiative.

In particular, these decisions are aimed at improving the situation on the labor market, raising the living standards of citizens, and implementing electricity market reform, which, in turn, will facilitate Ukraine’s integration into the EU energy market.

The demographic strategy envisages a number of key measures, including:

improving the birth rate;
reduction of the premature mortality rate;
overcoming negative migration trends, in particular through the return of Ukrainians from abroad
activation of the maximum number of citizens who can work in the labor market;
promoting active longevity;
creating infrastructure and security preconditions for improving the demographic situation.

In addition, the agreed task to develop an information system for the NEURC will help ensure the regulator’s effective work in the context of energy sector reform.

Ukraine Successfully Carries Out the First International Automatic Exchange of Information on Financial Accounts

This was announced by the Ministry of Finance on 4 October 2024.

Thus, as part of this exchange, the State Tax Service of Ukraine transferred information on financial accounts of non-residents to the tax authorities of the jurisdictions – exchange partners, and also received data on accounts of tax residents of Ukraine from foreign competent authorities.

The subject of the exchange was information on financial accounts maintained by financial institutions (banks, insurance and investment companies, etc.) and owned by residents of partner jurisdictions, namely: the name of the owner, his address, tax residence, tax number, date and place of birth, information about the financial institution, account information: balance as of the end of the reporting period, total amount of dividends, interest or other income.

As a reminder, the Common Standard on Reporting and Due Diligence for Financial Account Information (CRS) is an international standard approved by the OECD Council on 15 July 2014 that requires countries implementing it to collect information from financial institutions on the financial accounts of account holders and to exchange such information annually on an automatic basis with exchange partner jurisdictions under the Multilateral Agreement of Competent Authorities on the Automatic Exchange of Financial Information.

Thus, in order for Ukraine to implement the CRS Multilateral Agreement, on 20 March 2023, the Verkhovna Rada of Ukraine adopted Law of Ukraine No. 2970-IX “On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine on the Implementation of the International Standard for the Automatic Exchange of Information on Financial Accounts”.

Cabinet of Ministers Updates Licensing Conditions for Medical Cannabis

On 30 September 2024, the Cabinet of Ministers of Ukraine adopted Resolution No. 1123, which approves the licensing conditions for the circulation of medical cannabis in Ukraine.

The Resolution will enter into force 2 months after its publication, i.e. on 1 December 2024.

As explained by the Ministry of Health, the new rules cover the processes from the cultivation of cannabis plants to the manufacture, storage, transportation, sale and use of cannabis-based medicines. Special attention is paid to the cultivation of plants for medical purposes.

Inter alia, the resolution establishes a complete list of documents required to obtain a license and the conditions for its issuance.
Licensees will be obliged to enter information on medical cannabis transactions into the electronic accounting system within the next business day after they are made, as well as report on the turnover of drugs on a quarterly and annual basis.

The licensing process for cannabis cultivation is regulated in particular detail, including the requirements for compliance with good cultivation practices (GACP). Each cannabis plant for medical purposes, each individual batch of processed products and packaged unit of cannabis plant substance will have a unique electronic identifier. At the same time, the licensee will have to ensure constant video surveillance and security of the places of cannabis activities.
The production of cannabis-based drugs must comply with the standards of good manufacturing practice (GMP) harmonized with EU regulations.

The use of such drugs will be subject to the availability of an electronic prescription from a doctor in accordance with the list of diseases and conditions for which they are prescribed, approved by the Ministry of Health.

Issue of Corporate Bonds: National Securities and Stock Market Commission Approves New Regulation

On 6 September 2024, the National Securities and Stock Market Commission adopted a new Regulation on the Procedure for Issuing Corporate Bonds and Their Circulation. The relevant decision No. 28/21/1105/K03 will enter into force on 1 November 2024.

Thus, the update includes, in particular, the following:

simplification of the requirements for the package of documents required for registration of the bond issue and the report to the Commission. At the same time, the definition of the term “corporate bonds” was clarified and systematized;
improving the process of issuing housing bonds to be redeemed through the transfer of housing construction objects and introducing a mechanism for replacing the issuer;
introduction of a procedure for issuing green and infrastructure bonds, which describes step-by-step the specifics of issuing such bonds and the requirements for the issuer;
the possibility for the issuer to credit unplaced bonds to its own account with their subsequent sale, as well as mechanisms for canceling redeemed bonds;
introducing rules regarding the issuance of secured bonds and the review of documents in accordance with the requirements of the Law on Administrative Procedure.