A couple of months ago, I started doing some business in the interesting – but risky – economy of Ukraine. I can go on and on about the ups and downs of doing business in this huge country with complex foreign relations, Kafkaesque Soviet-reminiscent bureaucracy, and volatile currency, but this post is about how to open a bank account in a country with antiquated and strong banking secrecy, which you, my dear readers might find interesting.
Non-Resident Banking in Ukraine
As per a previous post, “How to Choose an Offshore Bank“, I started by going through all available banks in Ukraine. I sent out many emails and made a lot of phone calls ahead of my visit to the Ukrainian capital of Kiev.
I compiled a list of documentations all banks asked for, to cover all bases. Some banks only asked for some of the documents, but I like to be prepared:
- Proof of residential address.
- Some sort of verification of stay in Ukraine, this can be something as basic as showing your entry stamp (and visa if required) or a copy of your hotel reservation.
- Proof of source of income. Different bank said different things; some said an ATM receipt would be enough for a cash deposit, whereas some required a bank statement, copy of payslip, and so on.
All in all, perfectly reasonable documentation required.
Reason for Choosing Ukraine
Normally, I would be hesitant about opening an account in a place like Ukraine, but since I was going to receive funds in the local currency (UAH) and make domestic wire transfers it made sense to open an account here.
Like many former Soviet republics, Ukraine has strong banking secrecy that can only be overridden by a court order. While corruption is a problem in Ukraine, it is unlikely to affect a low-profile non-resident.
Another attractive feature of Ukrainian banks is that anonymous debit cards or anonymous prepaid cards are prevalent. Generally referred to as deposit cards, most banks offer this to clients that cannot or do not want to get credit cards. These cards carry no name and can be topped up by cash or via internet banking.
Lastly, deposits at Ukrainian banks in the local currency often carry interest rates as high as 25%. While the currency has a turbulent history, I decided to accept the risk.
IBAN is not yet widespread in Ukraine but as of March 2013, work has begun to roll it out and get Ukraine integrated into SEPA. Read more (Ukrainian).
Fees are generally quite low, owing to the low average income.
Opening the Account
This process was quite simple after I had booked an appointment. I arrived at the bank shortly after the branch opened and left about an hour later. I picked up cards a few days later.
Some banks let you make an appointment in advance, which is helpful if you do not speak the language and can be sure that you will be meeting with someone who speaks English. The major banks tend to offer this service, although it varies between branches within the same bank even.