My Experience Opening a Bank Account in Ukraine

Written by Andrew Henderson
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Dateline: Kiev, Ukraine

The giant wall mural behind me was rather ironic: “Freedom is our Religion!”

Just across the street from Kiev’s Maidan Square – the site of numerous political uprisings since the fall of the Soviet Union – was the first Ukrainian bank I visited on my trip to Kiev.

This visit wasn’t because I believe that Ukraine offers an “up and coming” offshore banking opportunity; I don’t.

In fact, I have been lambasting the low quality of Ukrainian banks so much in the last several years – roughly since Euromaidan, in fact – that banking in Ukraine has been a sort of codeword among our loyal readers for “stuff not to do”.

Problems with Ukrainian Banks

Ukraine has a long history of banks run by mobsters and other shady characters. While every country has its share of bank disasters, including the United States, Ukraine was among the worst on earth, and quite possibly the worst in Europe.

Then, as recently as late 2016, Ukraine’s government moved to rescue the country’s largest bank, PrivatBank.

PrivatBank’s nationalization was largely funded by international interests interested in propping up Ukraine’s already failing economy, but the story behind the bank’s collapse raised eyebrows. Specifically, the largest bank in the country was owned by a shady tycoon whose companies and friends were the beneficiaries of 97% of his bank’s corporate loans.

More than one-third of all Ukrainian deposits were held in PrivatBank, and yet it was left to crumble and require a multi-billion dollar bailout from the government and other international agencies.

It’s safe to say that, while Eastern Europe is a hidden gem in many ways, Ukraine is the antithesis of a good place to plant a banking flag. Despite once-sky high interest rates (think up to 20%) on simple term deposits, Ukraine’s banking system is a mess.

So what did I do on a week-long trip to Kiev? Open a bank account, of course.

It’s not that I plan to keep any part of my wealth in a Ukrainian bank. Quite the opposite, in fact; my deposit amounts to the cost of a halfway decent dinner.

Simply put, mastering the offshore world one country at a time is my muse. Some people collect stamps. Some people play guitar. I open foreign bank accounts and seek second residencies.

And I couldn’t resist the chance to open a bank account in perhaps the worst place to do so.

There is only one reason why any normal person seeking international diversification and a safe place for their money would consider Ukraine as a place to deposit money…

Freedom and banking in Kiev

High Interest Rates in Ukraine Banks

For years, Ukraine’s banks lured depositors scared of the collapsing hryvnia with interest rates up to 20% and 21%. Generally, international banks paid a few percentage points lower, likely knowing that anyone who actually wanted return OF their capital wouldn’t want some oligarch loaning their money out to his friends.

There is no real deposit insurance here in Ukraine. In fact, it’s always amusing when westerners send me questions about “how safe is it to bank in Ukraine or this-country-or-that-country?” and mentioning things like the FDIC. Obviously, that doesn’t exist here.

Even when the government bailed out two of the largest banks recently, it was only up to about $8,000 in deposits. Again, this is not a banking destination unless you plan to live here and want to save a few bucks on ATM fees.

Even today, though, interest rates in Ukraine are high. Prominvestbank is offering a 16.75% one-year term deposit (or certificate of deposit) denominated in UAH. Ukrotsbank, owned by Italy’s Unicredit, is offering the same. International banks are offering less, but still in double digits.

Those interest rates are similar to those offered by similarly insular Mongolian banks, but higher than those in neighboring, safer countries.

If you want to deposit US dollars, euros, Swiss francs, or rubles, you can, but be prepared for the same low rates you’ll find everywhere else. Neighboring countries may offer better terms on stable currencies.

How to Open a Bank Account in Ukraine

It was not interest rates, but rather my geeky search for mastery, that brought me to Galereya Bytiva, a shopping and cafe district across from Maidan Square. It is here that the aforementioned mural touting “freedom” dominates the square as a reminder of the political opposition to the past administration’s policies.

This area is home to a number of Ukraine’s largest banks, namely international banks like Russia’s Sberbank and VTB, Hungary’s OTP, Austria’s Raiffeisen, and Germany’s ProCredit Bank.

However, somebody forgot to share the neighboring mural’s pro-freedom message with the Ukraine National Bank, because opening an account here can be hard.

It is not because remote account opening is impossible, as it is in almost every onshore jursdiction these days. It’s that the banks, and the banking system itself, are a bit of a mess.

According to Ukraine’s central bank, there are 25 Ukrainian banks that hold at least $200 million in assets.

PrivatBank still tops the list as ironic proof that, even after a bail-out, most humans don’t change their habits, figuring not only “it can’t happen here”, but perhaps that “it can’t happen again”.

Raiffeisen is the fourth largest bank in Ukraine with one-fifth the assets of PrivatBank, while the other international banks surprisingly ranked far lower. For a country where locals were dumping the local hryvnia currency at all costs, the idea of storing money in a local bank – owned by either some dude named Viktor, or the Russian government – seemed odd.

My first bank visit was to OTP Bank. There was no particular reason for this other than than their logo was the most appealing to me. When discussing deposits of $200, I figured I didn’t need a ton of due diligence between an appealing font.

In fact, while I imagine that OTP itself is rather solvent, I was almost hoping to run into some future problem having my money gobbled up by a mobster. It would make for a fun update for this article.

Anyway, I walked into the OTP Bank branch, used my marginal Russian to locate a banker who spoke passable English, and asked to open an account.

Almost immediately, the banker – a ruddy-looking young man – started bringing up problems. I aced the first question “are you a resident of Ukraine or not?”, but soon found out that either answer would have been satisfactory.

Then the problems started. The banker immediately dove into the “banker spiel”, which includes quick and frequent references to the central bank and their policies and how their hands are tied.

This is a good indicator of how good a bank, and by extension, a country are to work with. When people you want to invest money with make excuses from “hello”, that is often the first sign that you are in a country that is not interested in investment and may not be a good place to invest.

The banker explained to me that any non-resident of Ukraine was required to produce documentation proving the origin of the funds. Apparently mobsters can launder billions through Ukraine’s banks with ease, but an American tourist can’t toss $100 in a checking account without doing a circus act first.

“What if I just deposit $100?”, I asked, knowing that there are likely millions of accounts in Ukraine’s banks with less on deposit than that now.

“It’s the same requirement”, the banker replied to me. “Even $1, you must show proof”. Then more excuses about how this is the central bank’s regulation, we’re just following rules, blah blah blah.

Fortunately, I’ve seen this before. I know from years of experience that bankers have a unique talent for turning otherwise simple requirements into what sounds like Herculean tasks.

I have actually trained my staff on how to “speak banker”, and when to demand that the requirements in bank-speak are dumbed down into everyday language.

For example, ask any bank what you will need to open an account and they may specify that “the account holder must furnish an identity document”, even though it would be a lot easier to say “bring your passport”.

After five minutes of going in circles and discussing the different types of accounts I could, we settled on a far simpler process: I could withdraw money from the ATM using my existing debit card and provide the “check” (known to us as the “receipt”) to “prove” the source of my funds.

How this stops would-be terrorists from funding bank accounts in Ukraine I don’t know, although I suppose the central bank assumes in typical Eastern Europe fashion that if some other bank already accepted the funds then “eet ees naught their probbblem”.

By this point, I had actually warmed up to my new banker friend, who told me that I had two options:

One, to open a one-year term deposit earning a fixed 12% interest with a minimum deposit of 2,000 UAH (about $79),

or two, to open a savings account earning a variable 10% interest with a minimum deposit of 100 UAH (about $4).

Any account would involve a commission of 80 UAH to open, although I seemed unclear if this commission was for obtaining a debit card or just as an account opening fee, and didn’t press further as my policy is not to bother over bank fees that are comparable to an order of McNuggets.

Now that the thorny regulatory issues had been out of the way, the banker opened up and was curious: why did I want to open an account in Ukraine?

I explained that I was a collector of bank accounts, which seemed odd to him. At one point, I think I said “for fun”, and then attempted to play it cool as I followed up with “you don’t care, right?”

Much as I was tempted to, I didn’t want to tell him that opening the account was as a joke to avoid repeating that scene in Seinfeld where a subway passenger shouts as Kramer, “you think Ukraine is game?!”

After fifteen minutes, I had finally made some headway and found a way to prove the source of my funds without having to get a bank reference letter or show documents from the last business I sold in 2013.

I had decided on the savings account, merely because – much as I was secretly hoping for some problem as mentioned before – I know that banks in countries like Ukraine force you to come to a branch in order to close your term deposit at the end.

Not wanting to base my travel plans around collecting $80, I was willing to sacrifice 2% in interest for the flexibility of a traditional savings account that paid interest monthly.

Now, I was ready to get started… only I realized I had forgotten my passport at the hotel and would need to return.

Upon returning to my room at the Fairmont, I decided to try my luck at other banks. Again, all in the interest of “fun”.

To my surprise, most of the international banks had someone that spoke English. The service wasn’t even all that bad in most cases. Each bank had its own roadblocks with varying degrees of flexibility.

I visited Sberbank, KredoBank, Oschadbank, Ukreximbank, and Credit Agricole branches around Kiev. I also attempted to visit branches of German ProCredit Bank and FinBank, both of which looked like they were evicted and had boarded up entrances at city center locations.

Generally, I found the international banks to have better English, but weren’t any more helpful.

KredoBank, a Polish bank, gave me a front row seat to a fifteen-minute exercise in a cat chasing its tail, explaining at one point that foreigners can not open accounts, but then saying I could if the money was sent from within Ukraine, and finally saying that I could send the money from overseas if I could show proof of funds.

Oschadbank barely spoke any English, but repeated the same circular logic that made it sound as if getting a “declaration” was like landing a man on the moon.

At Sberbank, I waited for the receptionist to find an English speaker for fifteen minutes before the burly security guard go so close to me and seemed so frustrated by my lack of Ukrainian skills that I slipped out due to a low-level fear of my safety.

Basically, while it was possible to open an account at any of these banks, most made it sound impossible. Perhaps they are doing the world a favor. I eventually returned to OTP where, upon completing most of the paperwork, realized “this is too much hassle for the reward” and left.

An Overview of Banking in Ukraine

Overall, my experience banking in Ukraine was marginally better than expected, with more English-speaking and pleasant service than I would have expected. Whether my beginner’s Russian opened any doors, I can not be sure.

I would still not recommend banking in Ukraine. Again, this was an experiment for my own entertainment, and to share with you the Nomad Capitalist reader. As they say, don’t try this at home.

Ukraine is no banking paradise, but one lesson I am reminded of is how difficult banks will try to make opening an account for the uninitiated. While there are some banks who will absolutely not accept foreigners, and others that will never accept US persons, with many banks the bark is worse than the bite.

There are many onshore and offshore banks around the world that will work with you if only you know how to deal with them, how to answer their questions, and when to be persistent.

Andrew Henderson
Last updated: Dec 26, 2019 at 3:08PM

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26 Comments

  1. P.Figet

    This article was fun to read. Although kicking someone when they are down seems a bit uncouth. “Worst in the world” indeed. Cutting them no slack for having a war in the country. Would be interesting to read about your experience opening an account in Moscow, while speaking beginner Ukrainian and without ID…

    Reply
  2. David Polovin

    Great and timely article, Andrew, thanks.

    Reply
  3. Bogodar

    An interesting article to read, especially for bankers in Ukraine. Actually Unicredit sold it’s stake in Ukrsotsbank this year by exchanging assets with russian Alfa bank.

    Reply
    • Irina Loncar

      Thank you 🙂

      Reply
  4. John

    Thanks for this article, I hope there will be more on other countries, too. My experience in Poland and Portugal was comparable, bringing a local friend (with a bit of influence) did the trick, all door suddenly wide open and no questions asked.

    Reply
    • Irina Loncar

      Hi John, thanks for the comment 🙂

      Reply
  5. Frank

    Thanks for the piece. Really what I wanted to know. Was looking for a higher rate of return along with some excitement.

    Reply
    • Irina Loncar

      Thank you Frank 🙂

      Reply
  6. Dr. Hu Zhi Yuan

    AMLTF and ATTF requirements in Banking are strict and Banks have legal obligations to follow the directives of Regulators. Note the fact that Ukraine is designated in “High Risk” countries list as far as Banking is concerned. I do not find anything wrong in the processes / procedures being adopted by Ukrainian Banks for opening of Bank accounts for ” Non-Residents”.

    Reply
    • SB

      Process & Procedure is only an excuse to give plausible deniability when “unforeseen events” transpire. Banks are money laundering operations. It is their business. The front office is just for show.

      Reply
  7. Hal

    Thanks. Trying to move there to be with my Ukraianian girlfriend and was curious how to keep most of my $ in an American bank and do monthly transfers the cheapest. There is only 1 American bank with a branch in Kiev. An Entertaining informative article. Thanks

    Reply
    • Irina Loncar

      Thank you for commenting 🙂

      Reply
    • HENRY

      What is the name of the American bank in Kiev?

      Reply
  8. kris

    I opened a Privat and OTP bank account

    I had to get a tax code and notarised passport. Any foreigner can get one its free or you can pay an agency 20 dollars to do it for you.

    Both accounts took about 15 minutes to open. I thought it was an easy process personally both come with English online banking

    Reply
  9. Steve Henry

    I’m Australian, lived 6 mths a year for 3-1/2 yrs in UA, 2yrs ago opened USD ACC with Austrian Raiffeisen BANK AVAL, (considered a safe bank) with 500 грн UA currency, my reason given was to support my fiancée and save ATM fees.. BUT to withdraw USD’s in cash is a 1% withdrawal free of amount.. Requirements to open ACC; Notorized passport translation to Ukrainian, an address where you’re staying, (can be a hotel) I rent an apartment with official rent agreement document.
    You will not receive a Visa debit or Credit Card without a residency permit.. I’m now married to my Ukrainian wife and living in Odesa UA, I have residency and Tax Police Number which you must have if you wish to purchase an apartment or car.. all UA documents are written in Ukrainian language yet the official language spoken in the cities is Russian..

    Reply
    • Factual Guy

      Steve, you’re wrong to say official language spoken in cities is Russian. Ukrainian is spoken all the time primarily.

      Reply
      • Ian Kipling

        Not in my experience. Not much Ukrainian spoken at all in reality. Unless you are in the Western area of Lviv, the main language will be Russian. So Steve you are right, especially in Odessa, Kharkov and the like.

        Reply
  10. Dax Xenos

    OTP flatly refused to open an account for me in 2015, as did every bank I visited in Kiev! From what I read, the Obama justice department’s lawsuits against Swiss banks ruined it for Americans all over the world. I doubt President Trump has had the time or inclination to fix the problem. I plan to return, but I am at a loss how to do anything with anything but cash shoved down the front of my pants. Did you have an American passport?

    Reply
  11. Gerrit Koekemoer

    I just opened up an account with OTP, 2 days ago. Service was good but I suggest having a local with you. Card delivery takes 3 days minimum, in my case I visit a lot so I’ll collect next time.
    Requirement to open account…all you really need is your passport (and a local). I know someone who can help as she helped me but I obviously do not want to advertise.

    Reply
  12. That foreign guy in Puzata Hata

    For whatever reason, I quite like Ukraine. If they didn’t tax foreign earned income, I could imagine getting a residency and living here from spring to fall. Winter – no thanks.

    A bank account (in UAH, with a debit card) would be useful in day-to-day living. Paying with cash in Ukraine is often a hassle, the cashier asking if you have 2, 3, 7 or whatever hryvnias, and showing a sour face when you don’t. Paying 70 UAH groceries with a 500 UAH note (15€ / $19) almost creates a scene. Things may be different for those fluent in Ukrainian or Russian. Of course you could round everything up, but in some countries in EE and Balkans this sends a wrong message.

    Reply
  13. Greg

    What banks in the world can Bitcoin s be transferred to from USA.

    Reply
  14. No Name

    Would definitely not agree on many arguments above. As the person who has the pretty good understanding of the procedures for opening and managing a business and private bank account worldwide, I could state that Ukrainian banks offer the most flexible and cost-effective terms and conditions (opening procedures, fees, service, on-line facilities etc). Of course, the crisis in Ukraine left its mark on the market, I’d say it has been rather positive since most of the weak banks closed.

    We could also recall the mortgage crisis in the US in 2007-2009 or the debt crisis in the EU in 2010-2012 which obviously had the signs of the global bank crisis and left millions of people and businesses on the live sidelines.

    Opening a bank account in the EU or the US is such a great bureaucracy example. For example, the non-EU citizen may need even to pass a test for tuberculosis to be able to open a bank account there, what a shame. Opening the business bank account in the UK is almost not possible for a foreign entity outside the US or EU – the whole procedure is more like the interrogation of the FBI investigator and the bank charges and fees are mostly extremely high (starting from EUR 40 for a single international money transfer).

    I should also stress the post-soviet specialists and entrepreneurs make the substantial contribution to the development of the modern fintech world (from online banks to blockchain: Revolut, Bitfury, etc.).

    Reply
  15. Mostas

    A drew is always great i follow him long

    Reply
  16. Paul Yarlett

    I found this article incredibly amusing as I am a British Expat who has been living here legally permanently and legally since 2013. I have however had more success finding English speaking bank staff and while I also would not recommend keeping serious amounts of money in the bank I have not had the struggle to prove the source of my funds that Andrew did. I would love to see this article revisited especially after the new president has a chance to get is chair warm

    Reply
  17. Steve the world traveler

    I deposited some sizable money in privat bank for two years.

    It started as six month deposit but had to extend three more times because exchange rate got worse.

    I have read your articles but I don’t remember seeing the most important factor, exchange rates.

    And also taxation on interest income implemented in recent years.

    Some branch staff spoke excellent English unlike your experience.

    The interest calculation was not somehow not correct and I think that’s because of taxation.

    Banks did not exchange uah to usd more than $100.

    But there were many willing Private exchange boxes where you get money changed.

    You also didn’t mention the currency restrictions when exit Ukraine.

    Your article is readable but not detailed enough.

    Reply
  18. Thomas

    Hey look, you tried opening a bank account as a non-resident, sure, you run into problems. It is no wonder.

    When you start a company and eventually manage to hire yourself and get the residence permit (and registration), then you can get the full experience. It is a tedious 3 month process, very bureaucratic, but once you are done, life becomes pretty much normal.

    As of now, 10/2019, banks also went into the IBAN system amd it’s easier to transfer money to a Ukrainian bank account than before. But the ammounts and their sources must be always be accounted for. Which is not wrong.

    Reply

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