* Setting up and registration with the state register of the financial companies

As prescribed with the law of Ukraine, financial companies are the financial institutions that provide financial services which are subject to state regulation by the National Financial Service Commission in accordance with the applicable law.

Financial companies do not include insurance companies, or financial institutions engaged in services of funded retirement benefits, or lending institutions, including credit unions and pawn broker's shops.

Financial companies provide only those financial services which are specified in the annex to the Certificate of Financial Institution Registration, as well as those services which may only be provided if the relevant licenses/permits are obtained, in particular:

• provision of financial credits at the expense of own funds;
• financial leasing;
• factoring;
• provision of sureties, guaranties, loans;
• fund raising from legal entities with the commitment of its further repayment;

The first stage of financial company establishment is state registration of a legal entity.

The second stage is inclusion of the legal entity to the state register of financial institutions.

To obtain a status of a financial institution, any legal entity intending to operate as a financial company must comply with the requirements set by law. In particular, the incorporation documents of such legal entity must specify the activity related to certain financial services as the exclusive activity with the consideration of legal requirements, including the ones on possible combinations of certain financial services.

There should also be developed the internal regulations on financial services, template customer agreements which must comply with the legal requirements and be approved by the applicant’s competent authority in accordance with its incorporation documents.

Accounting and reporting systems must meet the legal requirements and provide for accounting of transactions related to financial service to the customers.

Equity capital available must amount to at least UAH 5 million as of the application date for financial companies intending to provide financial services related to transactions with funds raised from individuals, as well as from clearing, and at least UAH 3 million for other financial companies.

Moreover, another requirement refers to availability of qualified personnel immediately involved into provision of relevant financial services. Such employees should not have any outstanding convictions for profit-motivated crime. A head and a chief accountant of the applicant must meet the legal standards set for the heads and chief accountants of financial institutions.

One more requirement relates to technical conditions necessary for financial services to be provided to their customers and proper and timely accounting of financial and economic transactions to be ensured in accordance with the law of Ukraine, in particular: own or leased premise, proper computer hardware and software.

A legal entity acquires a status of a financial institution since the date of relevant entry about it to the Register. A document confirming the status of a financial institution is the Certificate of Financial Institution Registration.

Further on, in the course of successful operation of a financial company there often arises a necessity to establish detached divisions – branches, other structural subdivisions of a financial company – which are located beyond the legal entity’s location and perform all or a part of financial services on its behalf. A financial company is entitled to provide financial services via its detached divisions only if relevant information on such detached divisions is entered to the financial institution register and a certificate of registration of a financial company’s detached division with the financial institution register is obtained.

To enter information on a detached division of an applicant to the financial institution register, a financial company must meet the following additional conditions:

• equity capital of a financial company available in the amount set forth for certain financial services in accordance with the applicable law, no less than UAH 7 million, as of the application date, and the applicant’s having no non-fulfilled resolutions of the National Financial Service Commission with regard to any enforcement actions applied to it;
• qualified personnel working at the detached division who comply with the legal requirements set to employees of financial institutions;
• necessary technical conditions available at the detached division and so on;

KD CONSULTING’ legal firm will provide a full range of service related to incorporation of financial companies: starting from establishment of a legal entity and its registration with the financial institutions register and ending with licensing and entering of information on detached divisions into the register. We provide consultancy and prepare a required package of documents fully complying with the legal requirements and regulations of the National Financial Service Commission.

Large experience of our specialists in establishment of various financial institutions and confidence in our legal position allow for avoiding risks of refusal and dismiss of your documents submitted.