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Zero interest loan for Your firm in Ukraine: how to provide?

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In times of general economic crisis or a particular situation in the course of doing business, your firm in Ukraine may need financial assistance for support or further development.

How can this support be provided? Today we will talk about zero interest loan as a mechanism of effective company financing.

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How is zero interest loan regulated in Ukraine?

Zero interest loan is the transfer of a certain amount of funds for use, for a certain period of time, with an agreement to return it.

Why do we recommend zero interest loan? Because the irrevocable loan is considered by Ukrainian tax office as income, and implies the payment of tax. While the zero interest loan most often does not cause any tax consequences for both the borrower and the lender.

If such loan is not refunded, or is not returned in time, the non-refunded (or "overdue") amount is included in the tax base of the respective tax.

We also advise you to specify a period of no more than 12 months in the contract for zero interest loan.

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How to arrange for a zero interest loan for your company?

For legalization of the zero interest loan, it will be necessary to conclude a grant agreement, which should specify:

  • the condition of not charging interest for the use of the loan;
  • the period for which the loan is provided;
  • its refundable nature.

In case a non-resident provides zero interest loan, the written form of the agreement is mandatory.

Further, to formalize the zero interest loan, you will need to carry out departmental registration of the contract with the NBU (actually apply to your bank, providing information about the contract: the amount of loan, terms of settlements, parties, etc.). These actions should be taken before the actual receipt of funds.

If you want to issue a zero interest loan to your enterprise in Ukraine simply and quickly - call us.

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