* Setting up and registration with the state register of the credit institutions

As prescribed with the law of Ukraine, a lending institution is a financial establishment which, pursuant to the law, is entitled to provide financial loans at its own risk and at the expense of own and / or raised funds.

The first stage of establishing a lending institution is a state registration of a legal entity. The second stage is its registration with the state financial institution register.

To obtain a status of a financial institution, a legal entity intending to operate as a lending institution must comply with the legal requirements. In particular, its incorporation documents must specify that the only activity is provision of financial loans at the expense of own and / or raised funds. A lending institution must also develop domestic rules for provision of financial loans, template financial service agreements, which must meet the legal requirements. Accounting and recording system must ensure accounting and recording of financial service agreements in hard copy and electronic form.

A legal entity must be provided with an accounting system and a recording system, in particular, software and special technical equipment that meet the legal requirements and ensure accounting of transactions related to provision of financial services to their customers and drawing up reports as prescribed by the National Financial Service Commission.

Moreover, special requirements are set by law to the head, chief accountant, premises and capital of a lending institution which must total at least UAH 1 million.

Provision of financial loans by a lending institution at the expense of its own capital, including subordinated capital, under loan agreements concluded with lending institutions, as well as funds from state and local budgets, raised by financial institutions being public entities, does not require licensing.

If a lending institution intends to provide financial loans at the expense of raised funds, it must obtain a relevant license from the National Financial Service Commission. Official fee for such license currently (as of 01.11.2013) totals UAH 30 000.

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

KD CONSULTING law & consulting firm will provide a full range of service related to opening of a lending institution: 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.