Foreign Currency Deposit for Entrepreneurs: Opening Rules, Guarantees, Taxes, and Accounting

A foreign currency deposit can be a tool for storing temporarily available funds, but it does not guarantee protection against all financial risks. For an individual and a Sole Proprietorship, funds held in a bank are protected by the deposit guarantee system, while deposits of legal entities are not reimbursed by the Deposit Guarantee Fund. During martial law and for three months after its termination or cancellation, individuals and Sole Proprietorships are guaranteed the full amount of funds held within one bank, including accrued interest. After this period ends, the guaranteed amount will be at least UAH 600,000 per depositor in one bank. If a bank becomes insolvent, compensation for a foreign currency deposit is paid in hryvnias.

Individuals pay 18% personal income tax and 5% military levy on deposit interest — 23% in total. The bank withholds these taxes independently. For a Sole Proprietorship that is a single tax payer, such interest is passive income of the individual and is not included in business income, while for a legal entity, interest is considered company income. Opening a deposit, transferring own funds to a deposit, and receiving interest do not require a business license and are not, by themselves, settlement transactions for which an ECR or pECR is used.

What is a foreign currency deposit

Under a bank deposit agreement, the bank accepts money from the depositor, undertakes to return it under the terms of the agreement, and pays interest. The agreement may be concluded in paper or electronic form, including through a banking app, provided that the fact of its conclusion and the content of the agreed terms can be confirmed.

Foreign currency deposits are most commonly opened in US dollars or euros. The specific list of currencies, minimum amount, term, interest rate, possibility of replenishment, and early withdrawal are determined by the bank in its tariffs and agreement.

The interest rate on a deposit is almost always stated on an annual basis. For example, a rate of 2% per annum means income of 2% for a full year, not 2% per month.

The main types of deposits are:

• demand deposit — funds can be withdrawn on demand, but the interest rate is usually minimal;

• term deposit — opened for a specified period;

• replenishable deposit — allows additional funds to be added during the deposit term;

• capitalization deposit — accrued interest is added to the principal amount;

• deposit with periodic interest payments — income is transferred monthly, quarterly, or according to another schedule;

• deposit without early withdrawal — funds remain blocked until the agreed term expires.

As a general rule, a bank may not unilaterally reduce the interest rate on an individual’s term deposit unless otherwise expressly provided by law. For a demand deposit, the rate may be changed in accordance with the Civil Code and the agreement.

Who can open a foreign currency deposit

A Sole Proprietorship is considered a depositor under the Law on the Deposit Guarantee System. Therefore, funds held by a Sole Proprietorship in a bank are guaranteed under the same general conditions as funds of other individuals. Legal entities are not covered by this system.

An entrepreneur does not need a separate license, permit, or special KVED activity code to place their own funds in a bank deposit. Banking operations may only be carried out by a bank with a valid banking license.

How an individual can purchase foreign currency for a deposit

Purchasing cash foreign currency

The National Bank does not set a general limit on the amount of cash foreign currency that an individual may purchase for cash hryvnias. The actual sale depends on the availability of foreign currency at the bank’s cash desk or exchange office.

If hryvnias are first withdrawn from a bank account, the general limit on cash withdrawals from an account applies — up to UAH 100,000 per day. This restriction applies specifically to cash withdrawals, not to the total amount of foreign currency that a person may purchase using cash already available to them.

Purchased cash foreign currency can be deposited into one’s own foreign currency account or deposit through the bank’s cash desk. The bank has the right to request proof of the source of funds.

Online purchase of foreign currency without mandatory deposit placement

An individual may purchase non-cash foreign currency without confirmed foreign currency obligations within the equivalent of UAH 50,000 per calendar month in one bank. The purchased foreign currency is credited to a current foreign currency account.

This mechanism does not require the foreign currency to be placed in a term deposit. After purchase, it may be kept in a current account or used in accordance with the bank’s foreign exchange rules.

Purchase of foreign currency up to the equivalent of UAH 200,000 with placement in a deposit

A separate mechanism allows the purchase of non-cash foreign currency within the equivalent of UAH 200,000 per calendar month, provided that the purchased foreign currency is mandatorily placed in a term deposit with the same bank.

The main conditions are:

• the deposit term must be at least three calendar months;

• the purchased foreign currency is credited directly to the deposit;

• early termination of the agreement and early withdrawal of the purchased foreign currency are not permitted;

• after the term expires, the foreign currency may be returned to the depositor’s current account;

• the interest rate, interest payment terms, and automatic renewal conditions are determined by the bank.

This mechanism is intended for individuals and does not constitute a general authorization for businesses to purchase foreign currency as an investment asset.

Foreign currency deposits of Sole Proprietorships and legal entities

A Sole Proprietorship may place foreign currency that is legally held in its account into a deposit. This may include foreign currency revenue, refunds, own funds transferred in accordance with banking and foreign exchange regulations, or other receipts with a confirmed source of origin.

For a legal entity and a Sole Proprietorship, the purchase of foreign currency is regulated more strictly than for an ordinary individual. A business does not have a general right to purchase foreign currency solely for savings or subsequent placement in a deposit. As a rule, purchases are made for permitted foreign exchange transactions: payments for imports, repayment of certain foreign currency obligations, business trips, and other purposes allowed under NBU regulations.

If a resident already has foreign currency in current or deposit accounts, the bank takes it into account when determining the amount of foreign currency that may be purchased to fulfil obligations. Existing foreign currency funds must be used before additional foreign currency is purchased, except for exceptions established by the NBU.

Therefore, a business may:

• place foreign currency it already owns into a deposit;

• transfer foreign currency funds from a current account to a deposit in accordance with the agreement with the bank;

• receive interest in foreign currency or hryvnias under the terms of the banking product;

• return the deposit to its own account after the deposit term expires.

A business should not use retail foreign currency purchase limits intended for individuals as a means of financing business activities.

Documents required to open a foreign currency deposit

For an individual or Sole Proprietorship

The bank usually verifies:

• a passport or another identity document;

• the taxpayer registration number;

• residential address and contact details;

• tax residency;

• information about employment, business activities, and sources of income;

• information about the purpose of opening the account and expected transactions;

• Sole Proprietorship registration if the deposit is opened in connection with business activities.

For a legal entity

Depending on the company’s structure and the availability of information in state registers, the bank may require:

• information from the Unified State Register;

• the constituent document;

• a decision or order appointing the company director;

• the representative’s documents and confirmation of their authority;

• ownership structure;

• information about ultimate beneficial owners;

• information about tax status;

• qualified electronic signatures of persons authorized to manage the account;

• financial statements or other documents concerning the company’s activities.

Confirmation of the source of funds

The bank may request:

• a tax return;

• an income statement;

• bank statements;

• contracts and primary documents for business transactions;

• documents confirming the sale of property;

• inheritance or gift documents;

• customs declarations and foreign economic activity contracts;

• the company’s financial statements;

• documents confirming dividend payments.

The list is not the same for all clients. It depends on the amount, nature of transactions, client profile, and the risks assessed by the bank.

A bank may refuse to open an account, decline to carry out a transaction, or terminate a business relationship if it cannot properly identify the client, establish the beneficial owner, confirm the source of funds, or if the transaction shows signs of being suspicious. This does not constitute revocation of an entrepreneur’s authorization: a depositor’s deposit activity is not subject to licensing.

What to check in the agreement

Before transferring funds, you should obtain and keep the full text of the agreement, the accession application, tariffs, and the information document on the deposit guarantee system.

Early closure of an individual’s term deposit is possible only if provided for in the agreement. Even if early withdrawal is allowed, the bank may recalculate income using a lower interest rate. For deposits opened after the special purchase of foreign currency within the equivalent of UAH 200,000, early withdrawal is prohibited under NBU regulations.

How the foreign currency deposit guarantee works

During martial law and for three months after its termination or cancellation, the Deposit Guarantee Fund reimburses an individual or Sole Proprietorship for the full amount of funds held in the bank together with accrued interest.

The guarantee is calculated:

• per depositor;

• within one bank;

• based on the total amount held in current, card, and deposit accounts;

• including interest accrued up to the date specified by law;

• regardless of the number of accounts opened with the bank.

After the special period ends, the guaranteed amount will be at least UAH 600,000 per depositor in one bank.

If the deposit is denominated in foreign currency, the Fund pays compensation in hryvnias at the official NBU exchange rate determined in accordance with the Law. The depositor does not receive dollars or euros from the Fund, so foreign exchange risk remains.

The guarantee does not apply to funds of legal entities. Certain instruments and funds listed in Article 26 of the Law on the Deposit Guarantee System may also be excluded from reimbursement. Before placing a significant amount, the bank’s status in the NBU register and the list of Deposit Guarantee Fund participants should be checked.

Martial law in Ukraine has been extended from 5:30 a.m. on August 2, 2026 for 90 days, so the special full deposit guarantee remains in force.

Taxes on a foreign currency deposit

Individual

Only accrued interest is considered income. The amount deposited and subsequently returned is not taxed again.

The bank withholds the following from interest income:

• 18% personal income tax;

• 5% military levy.

The total tax burden is 23%. The bank acts as a tax agent, so an individual generally does not pay these taxes independently.

Sole Proprietorship — single tax payer

Interest on a deposit is passive income of an individual and is not included in the income of a Sole Proprietorship for calculating the single tax. The bank withholds 18% personal income tax and 5% military levy from this income.

Returning the deposit principal to a business account does not create new income if these funds were already properly recognized as income when originally received or were not subject to taxation as income. Supporting documents that make it possible to trace the movement of funds should be retained.

Legal entity under the general taxation system

Accrued interest is recognized as company income under accounting rules and affects the financial result before tax. Corporate income tax is calculated at the general rate of 18% unless the company has a special status or adjustments provided for by the Tax Code.

The bank does not withhold personal income tax or military levy from a legal entity because these taxes apply to the income of individuals.

Legal entity — Group 3 single tax payer

Interest received from the bank is included in the income of a legal entity that is a single tax payer. It is taxed at the rate selected by the company:

• 3% — for a VAT payer;

• 5% — for a non-VAT payer.

In addition, Group 3 single tax payers pay a military levy of 1% of income in accordance with the rules applicable to the relevant reporting period.

Calculation example

An individual placed USD 10,000 in a deposit at 2% per annum for one year.

• accrued interest — USD 200;

• 18% personal income tax — the equivalent of USD 36;

• 5% military levy — the equivalent of USD 10;

• net income — the equivalent of USD 154;

• net return after taxes — 1.54% per annum.

The calculation does not include bank fees, losses from exchange rate differences, or a possible decline in the purchasing power of the currency itself.

Accounting and document records

Documents that should be retained

Regardless of the depositor’s status, it is advisable to retain:

• the bank deposit agreement;

• the accession application;

• the bank’s tariffs;

• the deposit guarantee information document;

• payment instructions;

• statements for current and deposit accounts;

• bank notifications about opening and closing the deposit;

• calculations of accrued interest;

• certificates of taxes withheld;

• documents confirming the source of deposited funds;

• documents concerning foreign currency conversion.

A bank statement is a primary accounting document if it contains the required details and makes it possible to identify the transaction.

Accounting for a Sole Proprietorship

A Sole Proprietorship should separate business receipts from personal funds and retain documents explaining each movement of funds:

1. receipt of income from business activities;

2. transfer of funds to a deposit;

3. return of the deposit principal;

4. crediting of interest;

5. withholding of taxes by the bank.

Interest is not included in income subject to the single tax, but bank documents should be retained to confirm its passive nature.

Accounting for a legal entity

A legal entity recognizes a deposit as a financial asset. Depending on its term and conditions, it may be accounted for as a current or long-term financial investment.

The main rules are:

• accrued interest is recognized as income on an accrual basis;

• a foreign currency deposit is translated into hryvnias at the official NBU exchange rate on the transaction date and the balance sheet date;

• foreign exchange differences are recognized as income or expenses;

• transferring funds from a current account to a deposit is not a company expense;

• return of the deposit principal is not income;

• interest and foreign exchange differences affect the financial result.

If a deposit is opened for more than 12 months, it is generally classified as a non-current asset. A short-term deposit may be recognized as a cash equivalent only if it is highly liquid, readily convertible into a known amount of cash, and subject to an insignificant risk of changes in value.

Is an ECR or pECR required

Transferring own funds to a deposit, returning the deposit, and receiving bank interest are not payments by a customer for goods, work, or services. Therefore, a separate ECR or pECR receipt is not generated for such banking transactions.

At the same time, a deposit does not exempt an entrepreneur from fiscalization of a previous sale. If funds were received from a customer in cash, by payment card, or by another method considered a settlement transaction, the seller must issue a fiscal receipt at the time of payment. Subsequent depositing of the proceeds into an account or deposit does not correct a violation committed at the time of sale.

A bank receipt for depositing money into a deposit does not replace a fiscal receipt for goods sold.

Main risks of a foreign currency deposit

Bank insolvency risk

For an individual and a Sole Proprietorship, this risk is partially mitigated by the deposit guarantee system. Legal entities do not have such protection.

Foreign exchange risk

Even if the amount in dollars or euros has not decreased, its equivalent in hryvnias may change. If compensation under the guarantee is paid, the foreign currency deposit is converted into hryvnias.

Low real return

Foreign currency deposit rates are often lower than hryvnia deposit rates. After paying 23% in taxes, bank fees, and taking into account inflation in the country of the relevant currency, the real return may be minimal or negative.

Loss of access to funds

A term deposit may not allow early withdrawal. For a special deposit associated with the purchase of foreign currency within the equivalent of UAH 200,000, early withdrawal is prohibited.

Automatic renewal

If the depositor does not opt out of renewal within the specified period, the bank may renew the deposit at a new, often lower, interest rate.

Fees and conversion

The bank may charge fees for depositing or withdrawing cash foreign currency, transfers between accounts, account servicing, or currency conversion. A high interest rate does not always mean a better net result.

Concentration of funds

For a legal entity, keeping all reserves in one bank is particularly risky because its funds are not guaranteed by the Fund.

How to choose a bank and deposit

Before entering into an agreement, you should:

1. Check the bank in the NBU State Register of Banks.

2. For an individual or Sole Proprietorship, check whether the bank participates in the Deposit Guarantee Fund.

3. Compare the effective annual interest rate rather than the advertised rate.

4. Calculate net income after taxes.

5. Check fees for depositing, withdrawing, and transferring foreign currency.

6. Clarify the conditions for early withdrawal.

7. Disable automatic renewal if it is not required.

8. Check where interest payments are credited.

9. Do not place operating reserves needed for salaries, taxes, and payments to suppliers in a non-callable deposit.

10. For a legal entity, assess the bank’s financial statements, regulatory ratios, and concentration of funds.

11. Retain the agreement, tariffs, and all bank statements.

12. Do not provide employees with bank passwords, tokens, or keys if limited access to statements is sufficient for performing their duties.

Accounting for foreign currency accounts, exchange rates, and bank statements in Torgsoft

Torgsoft allows you to maintain management financial records of funds in cash registers, current accounts, and cards, and to record receipts, expenses, internal transfers, and foreign currency exchange. This makes it possible to record the transfer of money to a deposit, the return of the principal amount, and the receipt of interest as separate financial transactions, as well as monitor overall balances and the movement of business funds.

The software supports maintaining foreign exchange rates and foreign currency exchange transactions. Exchange rates are used for settlements with suppliers, recording the receipt of goods purchased in foreign currency, and calculating prices in hryvnias. For deposit transactions, a company can create a separate cash register, account, or financial analysis item so that funds blocked in a deposit are not mixed with the available operating balance.

The additional feature «Bank statements» supports receiving statements from Privat24, monobank, and UKRSIBBANK. Transactions can be viewed without an employee logging in to the online banking account, while access to receipts and withdrawals can be configured by user role. If a bank does not transmit transactions from a deposit account through the relevant integration channel, deposit transactions must be recorded manually in Torgsoft based on the bank statement. Torgsoft provides management control over the movement of funds but does not replace a bank agreement, accounting records of a legal entity, or tax reporting.

Official sources

1. Civil Code of Ukraine dated 16.01.2003 No. 435-IV — Articles 1058–1065: bank deposit agreement, types of deposits, interest, and return of funds.
   Official text

2. Law of Ukraine «On Banks and Banking» dated 07.12.2000 No. 2121-III — Articles 47, 55, 57: banking operations, relations between a bank and its client, and deposit guarantees.
   Official text

3. Law of Ukraine «On the Household Deposit Guarantee System» dated 23.02.2012 No. 4452-VI — Articles 2, 26, 27 and transitional provisions: depositor status, guaranteed amount, exclusions, and reimbursement procedure.
   Official text

4. Law of Ukraine dated 01.04.2022 No. 2180-IX — full deposit guarantees during martial law and transition to a guarantee of at least UAH 600,000.
   Official text

5. Resolution of the Board of the NBU dated 24.02.2022 No. 18 «On the Operation of the Banking System During the Introduction of Martial Law» — paragraph 12 and other provisions regarding the purchase, transfer, and use of foreign currency.
   Official text

6. Instruction on the Procedure for Opening and Closing Accounts for Users by Payment Service Providers, approved by Resolution of the Board of the NBU dated 29.07.2022 No. 162 — client identification and account opening.
   Official text

7. Law of Ukraine «On Prevention and Counteraction to Legalization (Laundering) of Proceeds…» dated 06.12.2019 No. 361-IX — Articles 11, 12, 14, 15: client due diligence, source of funds, and refusal to carry out a transaction or maintain a business relationship.
   Official text

8. Tax Code of Ukraine dated 02.12.2010 No. 2755-VI — subparagraph 14.1.206, Articles 164, 167, 170, 292, 134, 136 and Subsection 10 of Section XX: interest, personal income tax, military levy, single tax, and corporate income tax.
   Official text

9. Law of Ukraine «On the Use of Registrars of Settlement Operations…» dated 06.07.1995 No. 265/95-VR — Articles 2 and 3: definition of a settlement transaction and cases where an ECR/pECR must be used.
   Official text

10. Law of Ukraine «On Accounting and Financial Reporting in Ukraine» dated 16.07.1999 No. 996-XIV — Articles 3, 4, 9, 11: accounting principles, primary documents, and financial reporting.
    Official text

11. National Accounting Regulation (Standard) 21 «Effects of Changes in Foreign Exchange Rates», approved by Order of the Ministry of Finance dated 10.08.2000 No. 193 — translation of foreign currency assets and foreign exchange differences.
    Official text

12. Chart of Accounts and Instructions for its Application, approved by Order of the Ministry of Finance dated 30.11.1999 No. 291 — accounting for funds, deposits, income, and foreign exchange differences.
    Official text

13. Decree of the President of Ukraine dated 27.07.2026 No. 596/2026 and Law of Ukraine No. 4928-IX — extension of martial law from August 2, 2026.
    Presidential Decree
    Law approving the Decree

14. National Bank of Ukraine — explanations regarding foreign exchange restrictions, the register of banks, and banking statistics.
    Official NBU website

15. Deposit Guarantee Fund — list of participating banks, guarantee conditions, and reimbursement procedure.
    Official Deposit Guarantee Fund website