NBU Introduces Loan-Linked Cap to Facilitate Certain Cross-Border Payments
Effective January 14, 2026, the National Bank of Ukraine (NBU) introduced a new set of capital-control exemptions designed to stimulate inflows of foreign debt. The changes allow Ukrainian businesses to apply funds from newly attracted cross-border loans to settle a range of previously restricted liabilities.
1. The New Loan-Linked Cap: A Tool for Refinancing and Restructuring
Under the new rules, if a Ukrainian company receives a new loan from a non-resident after January 1, 2026, the principal amount of that loan creates a dedicated Loan-Linked Cap. Within this limit, the borrower may carry out certain cross-border payments that are otherwise generally prohibited.
What Payments Are Allowed Within the Limit?
Using the Loan‑Linked Cap, a company may now:
- Repay legacy foreign loans. Applicable to cross-border loans obtained before June 20, 2023. Under general rules, repayment of principal remains prohibited; interest may be paid only if no payment under the loan was overdue as of February 24, 2022, among other conditions.
- Repatriate dividends in excess of standard caps. Generally, dividends declared for periods starting January 1, 2023, may be transferred abroad only up to EUR 1 million per month (and subject to additional conditions). If no other exemptions apply, dividends may only be paid in UAH. The new regime allows additional dividend repatriation within the Loan-Linked Cap.
- Pay for legacy imports. Specifically, imports cleared through customs before February 23, 2021, which are otherwise subject to a continuing prohibition on payment.
- Refund pre-payments to foreign buyers. Applicable to advance payments made before February 23, 2022 for goods that were never delivered. Such refunds remain generally prohibited.
- Fund foreign representative offices beyond general limits. Ordinarily, financing of foreign offices is capped at the higher of EUR 1 million per year or the company’s actual 2021 budget for such offices. Additional transfers are prohibited (and must be made exclusively from foreign‑currency revenue). The new Cap allows supplemental financing up to the amount of the new loan.
Aggregation Principle: New Loan vs. Repatriation
The Loan-Linked Cap is aggregate and self-reducing. Any amount used to settle old liabilities directly reduces the sum that can later be repatriated to repay the principal of the new loan.
This aggregation affects principal repatriation only. Interest remains payable on the full outstanding principal under the new loan.
Example:
A company attracts a EUR 10 million new loan and obtains a EUR 10 million Cap.
It uses EUR 3 million of this Cap to pay additional dividends.
Outcome: Only EUR 7 million of the new loan’s principal may later be transferred back to the lender.
The remaining EUR 3 million becomes effectively trapped in Ukraine until further deregulation.
Interest remains payable on the full EUR 10 million amount of the new loan.
2. Accessing the Loan-Linked Cap
To qualify for the regime, the new loan must meet the key regulatory criteria established by the NBU, including the requirement that the interest rate (together with any fees and other servicing payments, except for principal repayment) must not exceed 12% per annum.
Principal may be repaid using the borrower’s own foreign currency at any time, within the remaining Cap. However, the purchase of foreign currency for principal repayment is permitted only after the loan has been outstanding for at least one year.
All payments under the new loan, as well as all transactions carried out within the Cap, must be processed through the same servicing bank.
3. Practical Considerations and Strategic Use Cases
Before these amendments, restricted payments could be made only in limited circumstances, such as within the amount of foreign shareholders’ new equity contribution or equivalent support provided to Ukraine’s Armed Forces.
The new mechanism substantially expands the available tools. It allows companies to restructure blocked liabilities – such as declared dividends, past-due pre-war loans, or legacy import obligations – by refinancing them through compliant new debt.
However, the structure requires careful modelling of cash flows and liquidity, analysis of corporate group flows, and precise drafting of loan documentation. Because each amount used under the limit reduces the repatriation capacity of the new loan, optimisation is highly case-specific.
Close coordination with the servicing bank is also essential, as both the new loan and all exempt transactions must be processed through the same bank. In practice, this may require formally designating that institution as the servicing bank for all relevant legacy loans, following the established regulatory procedure.
How We Can Help
Our Banking & Finance team advises lenders, investors, and borrowers on structuring external financing under Ukraine’s current capital-control regime. We can help you:
- assess whether the Loan-Linked Cap is suitable for your structure,
- design refinancing solutions for old liabilities,
- prepare compliant loan documentation, and
- assist you in interactions with Ukrainian servicing banks.
For tailored advice on applying the new rules to your business, please contact our team.